1. Lockheed Martin Corporation (NYSE:LMT)
Number of Hedge Fund Holders: 53
Lockheed Martin Corporation (NYSE:LMT) is one of the most notable defense companies in the world. Lockheed Martin Corporation (NYSE:LMT) remains one of the top choices of US Army and Navy for their warfare needs. Lockheed Martin Corporation (NYSE:LMT) is consistently winning new contracts from the US military.
During the fourth quarter of 2022, Lockheed Martin Corporation (NYSE:LMT)’s adjusted EPS came in at $7.79, beating estimates by $0.42. Revenue in the quarter increased by 7.1% on a YoY basis to reach $18.99 billion, beating estimates by $740 million. For fiscal 2023, Lockheed Martin Corporation (NYSE:LMT)’s net sales are expected to total in the range of about $65 billion to $66 billion, versus the consensus of $65.75 billion.
In January, Lockheed Martin Corporation (NYSE:LMT) declared a quarterly dividend of $3.00 per share, in-line with the previous dividend. Forward dividend yield at the time came in at 2.61%.
As of the end of the last quarter of 2022, 53 hedge funds tracked by Insider Monkey reported owning stakes in Lockheed Martin Corporation (NYSE:LMT). The biggest hedge fund stakeholder of Lockheed Martin Corporation (NYSE:LMT) was Rajiv Jain’s GQG Partners which owns a $560 million stake in the company.
Here is what Vltava Fund has to say about Lockheed Martin Corporation (NYSE:LMT) in its Q3 2022 investor letter:
“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…” (Click here to see the full text)
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