Back to top

The Zacks Analyst Blog Highlights: iShares US Aerospace & Defense, PowerShares Aerospace & Defense Portfolio and SPDR S&P Aerospace & Defense

Read MoreHide Full Article

For Immediate Release

Chicago, IL – September 21, 2017 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include iShares US Aerospace & Defense ETF (BATS:(ITA - Free Report)  Free Report), PowerShares Aerospace & Defense Portfolio (NYSEARCA:(PPA - Free Report)  Free Report) and SPDR S&P Aerospace & Defense ETF (NYSEARCA:(XAR - Free Report)  Free Report).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Wednesday’s Analyst Blog:

Beyond North Korea, 4 More Reasons to Buy Defense ETFs

Donald Trump’s pledges to meet North Korean premier Kim Jong-Un’s nuclear threats with “fire and fury” is probably one the root causes for the recent defense stock rally. But there are plenty of other factors that are fueling the sector. Let’s talk about those briefly (read: 3 Top Ranked Aerospace and Defense ETFs For Your Portfolio).

Mergers and Acquisitions

The aerospace and defense sector is thriving with mergers and acquisitions. Most recently, defense contractor Northrop Grumman Corp. announced an agreement to buy Orbital ATK Inc. for more than $7.8 billion.

As per Bloomberg, the merger would widen Northrop’s portfolio of aerospace and defense electronics and boost its expertise in composites and rocket propulsion. Also, Bloomberg cited that the deal will place the entity in a better position to compete with Boeing to replace the U.S. ground-based nuclear defense system.

In early September, United Technologies agreed to a $30 billion deal to buy the avionics and interiors maker Rockwell Collins. “This acquisition adds tremendous capabilities to [their] aerospace businesses and strengthens complementary offerings of technologically advanced aerospace systems,” as per United Technologies (read: ETFs to Profit if UTX-Rockwell Deal Sees the Light of Day).

Trump's Afghanistan Strategy

In late August, President Donald Trump commented that as many as 4,000 more U.S. troops will be employed to handle Afghanistan’s terror issue and that he will launch a political arrangement with the Taliban. Trump mentioned that the war will crush al Qaeda and prevent Taliban from taking over Afghanistan.

The President also said that a quick removal of U.S. troops from Afghanistan may once again attract terrorists to fill that gap. Since more wars mean more weapons, defense stocks rose broadly following Trump’s remarks (read: Trump's Afghanistan Rhetoric Helps/Hurts These ETFs).

Strong Sector Fundamentals

The aerospace sector, though making up only 2%% of the S&P 500 Index, registered 5.2% earnings growth in 2016 and is expected to log 6.1% growth in 2017, 9.9% in 2018 and 13.1% in 2019, as per the Earnings Trends issued on Sep 14, 2017.

Coming to revenue growth, the sector is expected to log growth of 3.2% in 2016, 2.2% in 2017, 3.8% in 2018 and 5.0% in 2019. On top of it, plenty of commercial orders are another plus point for the sector. For example, The Boeing Company recently agreed to sell 16 of its airplanes to Malaysia Airlines. Investors should also note that the Zacks Sector Rank is in the top 19% while the Zacks Industry Rank is in the top 16%.

Passage of a $700 billion Defense Bill by Senate

The Senate passed a $700 billion national security measure on Monday by an 89-8 vote. This National Defense Authorization Act would allow $60 billion of war spending, surpassing President Donald Trump’s budget proposal. The measure would approve 94 F-35 jets manufactured by Lockheed Martin. This indicates 24 more jets that were requested by the president and seven more agreed by the House.

ETFs to Buy

Aerospace and defense ETFs like iShares US Aerospace & Defense ETF (BATS:(ITA - Free Report) Free Report), PowerShares Aerospace & Defense Portfolio (NYSEARCA:(PPA - Free Report) Free Report) and SPDR S&P Aerospace & Defense ETF (NYSEARCA:(XAR - Free Report) Free Report) are well positioned to capitalize on the above-mentioned factors. These funds have a Zacks ETF Rank #1 (Strong Buy).

Want key ETF info delivered straight to your inbox?

Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>

Strong Stocks that Should Be in the News

Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year.See these high-potential stocks free >>.

Get the full Report on ITA - FREE

Get the full Report on PPA - FREE

Get the full Report on XAR - FREE

Follow us on Twitter: https://twitter.com/zacksresearch

Join us on Facebook: https://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339

support@zacks.com

https://www.zacks.com/

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.




In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


ISHARS-US AEROS (ITA) - free report >>

SPDR-SP AER&DEF (XAR) - free report >>

PWRSH-AERO&DEF (PPA) - free report >>


More from Zacks Press Releases

You May Like