As regional conflicts flare up in various parts of the world and geo-political risk increases, the attention of many professionals and investors has been focused on the defense industry.
To better understand this industry’s value chain, we built a portfolio with some of the largest defense contractors in the world including Aeroenvironment Inc, BAE systems, General Dynamics, L3Harris, Lockheed Martin, Northrop Gruman, Qinetiq and Raytheon.
Meanwhile, Clicking on the sensitivities function on Capnote then shows some of the key concentrations of this themed portfolio. Some of these observations are below.
The industry for defense is intimately connected to the aviation and engineering industries.
Over half of these companies operating in all 3 industries.
The below extract shows the industries sensitivities as generated on Capnote.
It is also worth considering the impact of this on company operations such as potential restrictions from governments on types of customers allowed or geographic presence.
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The most common suppliers to this group of defense companies come from the technology sector.
According to Capnote’s data sources, Cobham limited, Astronics, Mercury Systems, Ultra electronics and Comtech Telecommunications.
Below is an extract showing supplier sensitivities. Notably, these companies all produce advanced technological products related to computer systems or telecommunications.
It is also worth considering if some of these sub-industries are likely to become increasingly scrutinized and restricted by governments.
There is already precedent for this in other industries such as semiconductors and energy. For long term investors, these trends could be highly impactful to your portfolios.
Furthermore, discover more by building a themed portfolio and using Capnote’s sensitivities function.
You’ll also be able to find out key customers, key suppliers, indicators and industry concentrations. Sign-up for freeand give it a try today.