Vltava Fund, an investment management firm, published its third-quarter 2022 investor letter – a copy of which can be downloaded here. In its Q3 2022 investor letter, the fund mentioned that investors may have different expectations concerning inflation, interest rates, or economic growth, but, at the end of the day, what we buy will determine the portfolio’s return (and its risk). The fund also said that the need for capital investment over the long term has been, and will likely remain, higher than it anticipated. Try to spare some time to check the fund’s top 5 holdings for you to have an idea about their best stock picks this 2022.
In its Q3 2022 investor letter, Vltava Fund mentioned Lockheed Martin Corporation (NYSE:LMT) and explained its insights for the company. Founded in 1995, Lockheed Martin Corporation (NYSE:LMT) is a Bethesda, Maryland-based aerospace company with a $108.7 billion market capitalization. Lockheed Martin Corporation (NYSE:LMT) delivered a 15.36% return since the beginning of the year, while its 12-month returns are up by 14.82%. The stock closed at $409.99 per share on October 10, 2022.
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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Our calculations show that Lockheed Martin Corporation (NYSE:LMT) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Lockheed Martin Corporation (NYSE:LMT) was in 55 hedge fund portfolios at the end of the second quarter of 2022, compared to 56 funds in the previous quarter. Lockheed Martin Corporation (NYSE:LMT) delivered a -2.17% return in the past 3 months.
In September 2022, we also shared another hedge fund’s views on Lockheed Martin Corporation (NYSE:LMT) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q3 page.
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Disclosure: None. This article is originally published at Insider Monkey.
