Defense stocks are hot 🔥🔥🔥

Hello Seven Lakers,

we researched the most traded stocks by US politicians this week

The sector they bought the most was the Defense sector which could benefit from the Israeli-Hamas conflict

Stocks in the sector seem undervalued as their prices decreased a lot from beginning of the year - and now, given geopolitical events in the Middle East, the can become the best buying opportunity on the market

DEFENSE STOCKS: WHAT’S HAPPENING

Prior to Israeli war events, defense stocks were experiencing a downturn

• Raytheon Technologies (RTX:US) is down by 26.61% from beginning of the year

• Lockheed Martin Corp (LMT:US) is down 7.77% from beginning of the year

• Northrop Grumman Corp (NOC:US) is down 9.49% from beginning of the year

However, let’s see if the Israeli war influenced them in any way:

While RTX did not react a lot to war announcement…

..it’s evident that Lockheed Martin and Northrop Grumman Corp price drops were recovering amidst the ongoing war in the Middle East - but did not reach yet the values witnessed at the beginning of 2023

For example, look at how Lockheed Martin price rose after war announcement - nice rally, but again still lower than beginning of 2023

Northrop Grumman Corp experienced the same effect

WHO IS BUYING AMONG US POLITICIANS 

Amidst rising scrutiny of congressional stock trades, several U.S. lawmakers have recently made significant purchases in major defense companies

#1 Senator Markwayne Mullin

On the 13th of September, 2023, Senator Markwayne Mullin bought RTX stock from a joint account.

The Senator bought between $15,000 and $50,000 worth of RTX shares.

Following his trade, the stock price of Raytheon Technologies Corp experienced a dip but showed signs of recovery towards late October.

On January 3rd, 2023, Mullin took the oath of office after serving Oklahoma in the U.S. House of Representatives for ten years

Mullin represents Oklahoma in the Senate Armed Services Committee, the Environment and Public Works Committee, and other Committees

Since October 6, the stock value for RTX has risen by 6.03%.

#2 Kevin Hern

Another Congress member who was trading RTX recently was Kevin Hern

Also from a joint account, Hern acquired up to 178 shares at a price of $84.33 per share on September 7, 2023

#2 Josh Gottheimer

On September 26, 2023, Josh Gottheimer bought shares of Northrop Grumman Corp

The transaction's value ranged between $1,000 to $15,000

Examining the trade history for NOC, there's a visible uptrend in stock price following the date of Gottheimer's transaction, indicating a notable increase in value

NOC stock closed at $489.07 on Oct 16, after a surge of nearly 15.6% since Oct 7

Presently, Rep. Gottheimer serves on the House Intelligence as well as the Financial Services Committees.

SHOULD YOU BUY AS WELL?

While certain analysts predict that this rally in defense stocks might actually be short-lived, as was the case in February 2022, when Russia first invaded Ukraine..

..on the other hand, there are still Lawmakers who are holding stakes in multiple defense stocks, a reflection of their confidence in the industry's prospects

I would closely monitor if Politicians sell those stocks or the buy more: they are best positioned to grasp insider information on the future of war

Especially if U.S. intervenes more in geopolitical dynamics in Middle East with his army

Even if their price surged recently, defense stocks lost a lot of value over the last 9 months, and seem fairly valued now - we believe there is a buying opportunity now