Following a chemical attack in Douma near the Syrian capital Damascus which claimed around 60 lives, the Trump administration is weighing its military options against Syria. In case the United States decides to launch military actions against Syria it is likely to receive support from France’s president Emmanuel Macron and Britain’s prime minister Theresa May.
Several other countries are willing to support the United States in its move against the Syrian government of President Assad. The Trump government’s likely air strikes will not be limited to Syria but will also be aimed at its major supporters, Russia and Iran. In this context, Russia has already warned the United States of retaliatory actions. With both United States and Russia likely to conduct military actions against each other related to Syria, defense stocks seem to be a lucrative investment choice.
What Happened In Douma?
On Apr 7, Douma, a rebel-held western Syrian city near Damascus witnessed a serious attack when chemical bombs were dropped on the region. Following the attack, around 60 people including women and children lost their lives, while more than 1,000 were injured. President Trump slammed this attack calling its “heinous” and “atrocious” and said that the United States has “a lot of options militarily” to answer to this.
Last April, Syria’s Shayrat airbase, which acted as a launch pad for a poisonous gas attack on the city of Khan Sheikoun, was attacked and neutralized by the United States. The Trump administration along with its ally countries are now thinking of conducting a similar or even higher scale of attack on Al Dumayr air base, which acted as the launching point for Apr 7’s supposed chemical assault on Douma.
Trump Condemns Douma Chemical Attack
On Apr 12, the President Trump warned Russia, a key supporter of Syria’s Assad government to “get ready” for the chemical attack on the city of Douma. Meanwhile, both Syria and Russia responded to Trump’s tweet, Syria's Foreign Ministry issued a statement, calling this a “reckless escalation.” Maria Zakharova, spokesperson of Russia’s Foreign Ministry said smart missiles should be directed toward terrorists and not a “legal government,” which has carried out its fight against “international terrorism for several years on its territory.”
Earlier, Trump called Syria’s move an attack on humanity and said that Syria supported by Iran’s ground forces and Russia’s air transportation will “pay a price.” In fact, President Trump canceled his first visit to South America and instead chose to carefully watch “the American response to Syria," per a White House statement.
Russia in No Mood to Sit Back
Additionally, on Apr 11, in a UN Security Council meeting, Russia clearly said that in case the United States conducts any missile strike on Russia or even Syria, it will answer back with similar moves. Vladimir Putin-led country will answer United States’ action with similar moves. In the meeting, Vasily Nebenzia, the representative of Vladimir Putin-led Russia to the United Nations, requested the United States to “refrain from the plans” being developing at present. He warned that if the United States carries out any "illegal military adventure," it will have to "bear responsibility" for that.
Separately, Alexander Zasypkin, Russia’s ambassador to Lebanon reportedly said that if the United States conducts any air strike, “the missiles will be downed” and “the sources from which the missiles were fired" will also be eliminated. In this fight between two permanent members of the UN, the United States and Russia, the Organisation for the Prohibition of Chemical Weapons (OPCW) will position a team “shortly” in Syria to evaluate whether banned chemical weapons were used in the Douma attack.
5 Best Defense Stocks
Both the United States and Russia have given clear signals of military actions against one another, which have brought the spotlight back on companies that are involved in the defense industry. In this context, we can say that Syria’s attack on Douma city has clearly shifted focus on companies involved in the manufacture and processing of defense equipment.
We have selected five stocks that are expected to gain following these developments. These five stocks flaunt a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
ManTech International Corporation (MANT - Free Report) is a provider of technologies and solutions for mission-critical national security programs.
This Virginia-based company has a Zacks Rank #1. The expected earnings growth rate for the current year is 23.77%. The Zacks Consensus Estimate for the current year has improved 11.7% over the last 60 days. ManTech International has gained 27.2% in the last six months.
CPI Aerostructures, Inc. (CVU - Free Report) is engaged in contract production of structural aircraft parts and sub-assemblies for the commercial and military sectors of the aircraft industry.
This New York-based company has a Zacks Rank #2. The expected earnings growth rate for the current year is 20.77%. The Zacks Consensus Estimate for the current year has improved 11.3% over the last 30 days. CPI Aerostructures has gained 11.4% in the last six months.
Northrop Grumman Corporation (NOC - Free Report) is a security company for government and commercial customers.
This Virginia-based company has a Zacks Rank #2. The expected earnings growth rate for the current year is 16.86%. The Zacks Consensus Estimate for the current year has improved 0.1% over the last 30 days. Northrop Grumman has gained 16.1% in the last six months.
The Boeing Company (BA - Free Report) is a manufacturer of commercial jetliners, military aircraft, satellites, missile defense, human space flight and launch systems and services.
This Illinois-based company has a Zacks Rank #2. The expected earnings growth rate for the current year is 16.70%. The Zacks Consensus Estimate for the current year has improved 0.9% over the last 60 days. Boeing has gained 25% in the last six months.
Huntington Ingalls Industries, Inc. (HII - Free Report) is America's largest military shipbuilding company and a provider of professional services to partners in government and industry.
This Virginia-based company has a Zacks Rank #1. The expected earnings growth rate for the current year is 43.16%. The Zacks Consensus Estimate for the current year has improved 30.2% over the last 60 days. Huntington Ingalls Industries has gained 8.1% in the last six months.
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