Stock Option Advisory

Is Putin Itching for a Cold War? Defense Industry Covered Calls

Recently a shirtless and Siberian-vacationing Putin has been making headlines; partly because he has been running around shirtless in a land known more for its mosquitoes than for its sunshine and partly for resuscitating the cold war.

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Is the threat being blown out of proportion? Putin is in charge of an economy recently reinvigorated by oil money. He has exiled or jailed most of his rivals. The next step, naturally, would be to restore national pride. What better way to do this than to make a few symbolic spy missions over the US while firing up some old tank and ship factories?

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On the other hand, Moscow residents are complaining of kidnappings and crime. Money, it appears, doesn’t seem to be trickling down. They have rampant crime and corruption with robber-baron types snapping up Geneva mansions like they’re oyster brochettes at a Beverly Hills cotillion. Doesn’t this sound like the Russia James Bond knew and loved.

Plane factories mean national pride, jobs, and ultimately a placated populace. It does make the domestic reasoning for a little chest beating seem desirable. But how does this look to the United States? This preening plays out entirely differently in our country.

Case for Defense Spending:
General Petraeus’ progress report looks likely to bring news supporting the Iraq surge. The Russian’s shenanigans also look like a good reason for continued R&D and construction of expensive weapons systems. News reports are indicating Petraeus’ report will be followed shortly by an emergency funding request.

A look at Defense Contractors:
To get a good look at covered call investment opportunities on defense contractors, we turn to the powerful search tools at the PowerOptions website.

The search conducted below consisted of specifying the Aerospace/Defense industry in PowerOptions‘ SmartSearchXL sector dropdown menu. We also specified stocks expiring in the next 120 days with option strike prices near the stock price. This is what the search returned:

Covered Call Search – Defense Stocks
Symbol Stock
Boeing Co. BA 96.90 (+1.25) BAKT 07 NOV 100.0 (80) $3.60 93.3 3.7 3.9 7.2
Goodrich (B.F.) Co. GR 62.91 (+2.00) GRKM 07 NOV 65.0 (80) $2.25 60.66 3.6 3.7 7.2
Lockheed Martin Corp. LMT 99.71 (+1.92) LMTLT 07 DEC 100.0 (115) $6.10 93.61 6.1 6.5 6.8
General Dynamics Corp. GD 78.25 (+1.90) GDKP 07 NOV 80.0 (80) $2.80 75.45 3.6 3.7 6
Raytheon Co. RTN 59.45 (+2.23) RTNKL 07 NOV 60.0 (80) $2.25 57.2 3.8 3.9 4.9
Lockheed Martin Corp. LMT 99.71 (+1.92) LMTLS 07 DEC 95.0 (115) $9.00 90.71 9 4.7 4.7
Boeing Co. BA 96.90 (+1.25) BAKS 07 NOV 95.0 (80) $6.20 90.7 6.4 4.7 4.7
Lockheed Martin Corp. LMT 99.71 (+1.92) LMTJT 07 OCT 100.0 (52) $3.80 95.91 3.8 4 4.3
Northrop Grumman Corp. NOC 76.93 (+0.95) NOCKO 07 NOV 75.0 (80) $4.60 72.33 6 3.7 3.7
Goodrich (B.F.) Co. GR 62.91 (+2.00) GRKL 07 NOV 60.0 (80) $5.00 57.91 7.9 3.6 3.6
Boeing Co. BA 96.90 (+1.25) BAJS 07 OCT 95.0 (52) $5.00 91.9 5.2 3.4 3.4
General Dynamics Corp. GD 78.25 (+1.90) GDKO 07 NOV 75.0 (80) 5.6 72.65 7.2 3.2 3.2
(For more details click the ticker symbol above)

The PowerOptions search engine has given us a number of potentially great trades to choose from. Now, if defense spending stays high these companies may continue to see strong profits and growth.

Investors may feel like they’re asking for war by investing in these stocks. It may help to remember almost all of the great technological advances of the 20th century came out of the US military industrial complex. As long as spending and international insecurity stays high, the defense industry will keep coming up with more sophisticated gadgets and weaponry.

Competitors for BA include: Lockheed Martin Corporation (LMT), Northrop Grumman Corp. (NOC), Airbus S.A.S. (private), Applied Signal Tech. Inc. (APSG), Orbital Sciences Corp. (ORB), Raytheon Co. (RTN), and United Techs. Corp. (UTX).
Competitors for GR include: Honeywell International Inc. (HON), United Technologies Corp. (UTX), AAR Corp. (AIR), Crane Co. (CR), Esterline Tech. Corp. (ESL), Ladish Co. Inc. (LDSH), Spirit AeroSystems Holdings Inc. (SPR), TransDigm Group Inc. (TDG), and Triumph Group Inc. (TGI).
Competitors for LMT include: Boeing Co. (BA), Northrop Grumman Corp. (NOC), Raytheon Co. (RTN), Cubic Corp. (CUB), DynCorp Intl. Inc. (DCP), Flir Systems Inc. (FLIR), General Dynamics Corp. (GD), Griffon Corp. (GFF), iRobot Corp. (IRBT), ITT Industries Inc. (ITT), L-3 Communications Inc. (LLL), Orbital Sciences Corp. (ORB), SAIC Inc. (SAI), and Teledyne Tech. Inc. (TDY).
Competitors for GD include: Lockheed Martin Corporation (LMT), Raytheon Co. (RTN), Northrop Grumman Newport News (private), Alliant Techsystems Inc. (ATK), Cubic Corp. (CUB), Elbit Systems (ESLT), Harris Corp. (HRS), and Northrop Grumman Corp. (NOC).
Competitors for RTN include: Boeing Co. (BA), Lockheed Martin Corporation (LMT), Northrop Grumman Corp. (NOC), Alliant Techsystems Inc. (ATK), Rockwell Collins Inc. (COL), DRS Techs. Inc. (DRS), Endwave Corp. (ENWV), General Dynamics Corp. (GD), ITT Industries Inc. (ITT), L-3 Communications Inc. (LLL), Teledyne Tech. Inc. (TDY), and Teleflex Inc. (TFX).
Competitors for NOC include: Boeing Co. (BA), General Dynamics Corp. (GD), Lockheed Martin Corporation (LMT), Elbit Systems (ESLT), II VI Inc. (IIVI), KVH Industries Inc. (KVHI), ManTech Intl. (MANT), Orbital Sciences Corp. (ORB), Raytheon Co. (RTN), Teledyne Tech. Inc. (TDY), and United Industrial Corp. (UIC).
For more information about how to identify and research great option trades, visit the PowerOptions website. There you will find the data you need to make quick, clear, and informed decisions. You can trade knowing you have found the best investment. Also, PowerOptions will allow you, with a few quick clicks, to quickly and accurately compare trades. PowerOptions‘ premium customer support is second to none in the industry. They can be easily contacted when you need them at their toll-free number to answer customer questions. Call them now toll free at 877-992-7971.

PowerOptions provides a free 14-day trial of its service. So join PowerOptions today, and you too can start reaping the benefits of the covered call investment strategy. PowerOptions‘ sister company PowerOptionsApplied provides expert stock option trading recommendations. PowerOptionsApplied specializes in covered calls, naked puts and iron condor stock options strategy recommendations.

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[tags] Putin, Moscow, Airbus S.A.S., Northrop Grumman Newport News, AIR, AAR Corp., APSG, Applied Signal Tech. Inc., ATK, Alliant Techsystems Inc., BA, Boeing Co., COL, Rockwell Collins Inc., CR, Crane Co., CUB, Cubic Corp., DCP, DynCorp Intl. Inc., DRS, DRS Techs. Inc., ENWV, Endwave Corp., ESL, Esterline Tech. Corp., ESLT, Elbit Systems, FLIR, Flir Systems Inc., GD, General Dynamics Corp., GFF, Griffon Corp., HON, Honeywell Inc., HRS, Harris Corp., IIVI, II VI Inc., IRBT, iRobot Corp., ITT, ITT Industries Inc., KVHI, KVH Industries Inc., LDSH, Ladish Co. Inc., LLL, L-3 Communications Inc., LMT, Lockheed Martin Corp., MANT, ManTech Intl., NOC, Northrop Grumman Corp., ORB, Orbital Sciences Corp., RTN, Raytheon Co., SAI, SAIC Inc., SPR, Spirit AeroSystems Holdings Inc., TDG, TransDigm Group Inc., TDY, Teledyne Tech. Inc., TFX, Teleflex Inc., TGI, Triumph Group Inc., UIC, United Industrial Corp., UTX, United Techs. Corp., covered call investment strategy, investment strategy, iron condor, poweroptions, stock option trading, stock options [/tags]

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