It might be surprising that as geopolitical tensions and the risk of a wider regional conflict in the Middle East rise, defense stocks have been lagging on the sidelines.
With defense stocks trading closer to their 52-week lows, I believe that this presents an attractive risk/reward opportunity to potentially add some of these defense stocks to your portfolio.
With these types of valuations, the downside is limited, and the upside remains sizable, especially given the propensity for defense stocks to outperform during escalations of war.
The biggest risk to NOC is its ability to navigate supply chain costs and budget overruns, which recently dented its recent quarter earnings.
The trade The implied volatility rank on NOC is currently sitting at 23%, which indicates that options are neither cheap nor expensive.
Persons:
Lockheed Martin
Organizations:
Northrop Grumman, Lockheed