investingfromtheright

I am retired and take educated guesses on all things financial.

July 16, 2007

July 17, 2007: Aero Defense,DEEPWATER and a trip







I spent the better part of last week at one Air Force base and then then assisted my son and his family move to a new classified position in Colorado Springs driving a 2003 Ranger 4 wheeler across 1359 miles of heat loaded with essential stacks of stuff.

The USAF is in transition. Many junior officers are being asked to take leave as downsizing takes hold. The 21st century air force will likely consist of many drones, computer-driven laser weapons, lightning fast super missiles, and squadrons of unmanned bomber and fighter units coordinated in virtual harmony without human contacts. And there will be some manned planes as well. The new deployment of the latest drone to Afghanistan and Iraq (directed from a command center in Nevada) should be in the headlines this week. Fascinating and vital to see the our Air Force continue to be our most lethal military arm.

Force Protection (FRPT) is being criticized by some in Congress for being awarded a lucrative explosive-resistant vehicle contract when they had failed to meet quotas in the past. I believe that more of this type of micro-managing fishing expeditions
by Democrats is silly and an insult to Pentagon planners, who have forgotten much more than special-interest driven baby Dems will ever know. I have criticized myself for not buying FRPT when it was two bucks a share not too long ago. This company is solid and deserves more respect than it is getting. I would not buy the stock now (I may regret stating this) unless there is some substantial fact of a consolidation in this niche industry. My favorite remains Oshkosh (OSK).

RTN received a $304m contract for upgrades to the TPY-2 radar.

DOD has a new position: Africa Commander. Congratulations to General William Ward.
Africa is quietly becoming a haven for terrorist organizations (over and above the twenty or so terrorist governments representing peace and stability from Africa at the U.N.).

GD received a $1.2b WIN-T cost plus development contract (see Air Force notes above).

Air Berlin ordered twenty-five 787s worth $4b from Boeing. No Stukas.

LAN announced it expects to purchase twenty six 787s and lease six 767s for its fleet.

ERJ broke ground for its new bizjet facility at Williams Gateway Airport.

Airbus may shutter eight Power 8 facilities later this month.

USAF Stock picks:

Goodrich (GR)
Boeing (BA)
Raytheon (RTN)
Northrup (NOC)
Lockheed Martin (LMT)
General Dynamics (GD)
Alliant Techsystems (ATK)
Esterline Technologies (ESL)
DRS Technologies (DRS)
EDO Corporation (EDO)
Dyncorp (DYN)
L-3 Communications (LLL)

The US Coast Guard has completely revamped their problem-plagued DEEPWATER program. A new set of outstanding USCG officers are already making dramatic changes to the program, which is going to replace 1960s Coast Guard boats and give this wonderful service the speed and muscle it needs to perform its wide variety of functions. Semper Peratus, gentlemen. This new group will get the job done. Finally.

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