2. Lockheed Martin Corporation (NYSE:LMT)
Number of Hedge Fund Holders: 55
Lockheed Martin Corporation (NYSE:LMT) is a security and aerospace company that engages in the research, design, development, manufacture, integration, and sustainment of technology systems, products, and services worldwide. It is one of the premier drone stocks to invest in. On October 4, Lockheed Martin Corp was awarded a $35.8 million modification contract against a previously issued basic ordering agreement. The modification adds scope and increases the contract ceiling for F35 lightning II Lot 15-16 batch 2 Ancillary Mission Equipment for the US Navy, Air Force, and Foreign Military customers.
On October 10, Wolfe Research analyst Myles Walton initiated coverage of Lockheed Martin Corporation (NYSE:LMT) stock with a Peer Perform rating and no price target, noting that the company has a strong position in the defense sector.
Among the hedge funds being tracked by Insider Monkey, California-based investment firm ARK Investment Management is a leading shareholder in Lockheed Martin Corporation (NYSE:LMT), with 34,182 shares worth more than $13.2 million.
In its Q3 2022 investor letter, Vltava Fund, an asset management firm, highlighted a few stocks and Lockheed Martin Corporation (NYSE:LMT) was one of them. Here is what the fund said:
“Lockheed Martin Corporation (NYSE:LMT) is one of the world’s largest aerospace and defence companies. The war in Ukraine has reminded investors and the wider public just how important these companies are. The aerospace and defence industry in the USA is an established oligopoly. This means that a few large firms play a dominant role. While collectively they comprise an oligopoly, individually they often have monopoly positions in particular narrower segments. Their main counterparty is the US government, a key customer in what is known as a monopsonist position. This is a rather unusual situation, but one that is very advantageous for companies such as LMT.
LMT has a strong and long-term sustainable competitive advantage ensuing from the fact that its products are developed and manufactured at an extremely high level of technology and complexity, its development and contract cycles are measured in decades, and the costs for the government to switch to alternative suppliers are high. Moreover, part of the production is classified as secret, which further takes the wind out of the sails of potential competitors. This results in a very high return on capital and admittedly a slowly but steadily growing business.
In most NATO countries, which are LMT’s customers, defence outlays are based upon the size of GDP. This is currently growing very fast in nominal terms due to inflation in most countries. A number of countries have also announced significant increases in defence budgets, whether it be Germany, which aims to get to the NATO-agreed 2% of GDP, or Poland, which wants to spend more than twice as much on defence…(read more)
