Billionaires Showing Increased Interest in Aerospace & Defense Stocks

#3 Raytheon Company (NYSE:RTN)

— Number of Billionaires With Shares (as of June 30): 10

— Total Value of Billionaires’ Holdings (as of June 30): $548.14 million

Raytheon Company (NYSE:RTN) is the only stock in this article which had an increase in billionaire ownership during the second quarter (by three), despite the aggregate value of their holdings in the stock declining during that time (by 32%). One of the hedge funds that lowered its stake in the company significantly during the second quarter was billionaire Jim Simons‘ Renaissance Technologies, which cut its position by 91% to 92,200 shares. Raytheon Company (NYSE:RTN)’s stock also made its lifetime high last month, at $143.39, but has corrected since then and now trades with year-to-date gains of 8.23%. The Massachusetts-based defense technology company is expected to report its third quarter results at the end of next month and the current consensus estimate of analysts is for it to report EPS of $1.66 on revenue of $6.04 billion. For the same quarter of the previous year, Raytheon Company pulled in EPS of $1.47 on revenue of $5.78 billion.

#2 Northrop Grumman Corporation (NYSE:NOC)

— Number of Billionaires With Shares (as of June 30): 10

— Total Value of Billionaires’ Holdings (as of June 30): $1.52 billion

Moving on, the number of billionaire investors that we track with long positions in Northrop Grumman Corporation (NYSE:NOC) doubled during the second quarter and the aggregate value of their holdings in it rose by $230 million. Shares of Northrop Grumman Corporation (NYSE:NOC) have returned over 300% in the last five years and are currently trading up by over 10% in 2016. Despite such a stellar rally in the stock, it still sports a reasonable annual dividend yield of 1.72% based on its last trading price. For its most recent quarter, the company reported better-than-expected numbers, but that wasn’t enough to impress a few analysts, who are of the mind that after such a prolonged rally, the stock has become overvalued. On August 25, analysts at JPMorgan downgraded Northrop Grumman to ‘Neutral’ from ‘Overweight’, but upped their price target on it to $231 from $225.

#1 General Dynamics Corporation (NYSE:GD)

— Number of Billionaires With Shares (as of June 30): 11

— Total Value of Billionaires’ Holdings (as of June 30): $1.02 billion

General Dynamics Corporation (NYSE:GD) continued to remain the favorite aerospace and defense stock of the billionaire investors tracked by Insider Monkey at the end of June, as a net total of two billionaires added it to their portfolios during the second quarter, alongside the aggregate value of their holdings in it rising by 32.5%. Billionaires that initiated a stake in the company during the second quarter included Dan Loeb (Third Point) and Bruce Kovner (Caxton Associates LP). General Dynamics Corporation (NYSE:GD)’s stock also made its lifetime high recently, like several of its peers, and is currently trading up by almost 8% for the year. Most analysts who track General Dynamics Corporation (NYSE:GD) are bullish on it, citing the company’s strong balance sheet and its relatively low valuation when compared to its peers. The stock currently sports an average rating of ‘Overweight’ and an average price target of $167.67 from the 18 leading analysts and research firms on Wall Street who track it.

Disclosure: None