The document provides an executive summary and analysis of defense contractor performance in January 2013 and the budget outlook. It notes that most contractors expect sequestration cuts to occur on March 1st and are factoring in continuing resolution budgets. The document analyzes stock performance for major contractors, finding losses of 4-8% as investors grapple with fiscal uncertainties. It also provides highlights and analysis of individual contractor financial results and stock movements.
The document provides an overview and analysis of the Indian stock market and recommends "buy" ratings for several stocks. It discusses the recovery of the global and Indian economies from recession, and predicts continued growth in India and other developing economies. It then analyzes the long-term bullish outlook for the Nifty index based on a technical pattern and sets a target of 6,400 levels. The remainder summarizes investment recommendations for several companies across sectors, providing buy ratings and 12-month price targets for each.
Chief Investment Officer Ben Pace of Deutsche Bank presents on the state of the world economy and how it will effect luxury real estate prices in 2012 and beyond. From The Key 2012, luxury real estate conference by Concierge Auctions.
LPL Financial Research Second Quarter 2012 Market Insightchrisphil
The document provides an overview of market performance in the second quarter of 2012. Some key points:
- Stocks fell from the start of the quarter due to concerns over the European fiscal crisis and slowing global growth. The S&P 500 lost 2.8% for the quarter.
- Bonds fared better than stocks, with the Barclays Aggregate Bond Index returning 2.1% for the quarter. Safe haven buying amid the European crisis and global growth fears pushed yields lower.
- Commodities lost nearly 5% for the quarter on global growth fears and a strong US dollar, wiping out modest first quarter gains. Crude oil dropped nearly 20% for the quarter.
1) Greece's debt sustainability analysis was revised due to a worse economic outlook and delays in fiscal reforms.
2) Under the baseline scenario, Greece's public debt is projected to decline to 129% of GDP by 2020, above the 120% target.
3) Additional debt relief is needed from the official or private sectors to reach the 120% target and ensure debt sustainability.
The document provides an analysis and strategy update on China from Deutsche Bank analysts for 2012. Some key points:
- GDP growth is expected to slow to 8.3% in 2012 before accelerating to 8.6% in 2013, supported by 10% EPS growth for Chinese companies.
- Property investment growth will slow significantly in early 2012, potentially dragging down GDP by 1-1.5 percentage points.
- Inflation is expected to fall sharply to around 2.5% by the second quarter of 2012, benefiting sectors such as power and oil refining.
- Several investment themes for 2012 are highlighted, including disinflation, recovery in property and public spending, and dissipating fears
Based on proprietary data and analytic insight, this report gives Dun & Bradstreet's perspective on gloal business conditions for the first half of 2012.
The document provides a quarterly market insight report for the first quarter of 2011. It discusses the positive performance of both stocks and bonds during the quarter despite facing various geopolitical and economic challenges. Stocks posted their best first quarter gains in nearly 15 years, led by the energy and industrial sectors, while bonds achieved low to mid single-digit returns. Looking ahead, volatility is expected to remain for the rest of the year, providing both opportunities and risks for investors.
The document discusses the implications of Hungary's accession to the EU on its investment management industry. It provides background on the development of Hungary's financial services and investment management industries. The investment management industry grew slowly in the 1990s and more rapidly in the late 1990s. Assets under management increased annually by 23% between 1997-2002. The EU accession will significantly impact the Hungarian investment management industry by leveling the regulatory playing field and allowing more competition from foreign investment managers and funds. This may challenge domestic investment managers.
The document provides an overview and analysis of the Indian stock market and recommends "buy" ratings for several stocks. It discusses the recovery of the global and Indian economies from recession, and predicts continued growth in India and other developing economies. It then analyzes the long-term bullish outlook for the Nifty index based on a technical pattern and sets a target of 6,400 levels. The remainder summarizes investment recommendations for several companies across sectors, providing buy ratings and 12-month price targets for each.
Chief Investment Officer Ben Pace of Deutsche Bank presents on the state of the world economy and how it will effect luxury real estate prices in 2012 and beyond. From The Key 2012, luxury real estate conference by Concierge Auctions.
LPL Financial Research Second Quarter 2012 Market Insightchrisphil
The document provides an overview of market performance in the second quarter of 2012. Some key points:
- Stocks fell from the start of the quarter due to concerns over the European fiscal crisis and slowing global growth. The S&P 500 lost 2.8% for the quarter.
- Bonds fared better than stocks, with the Barclays Aggregate Bond Index returning 2.1% for the quarter. Safe haven buying amid the European crisis and global growth fears pushed yields lower.
- Commodities lost nearly 5% for the quarter on global growth fears and a strong US dollar, wiping out modest first quarter gains. Crude oil dropped nearly 20% for the quarter.
1) Greece's debt sustainability analysis was revised due to a worse economic outlook and delays in fiscal reforms.
2) Under the baseline scenario, Greece's public debt is projected to decline to 129% of GDP by 2020, above the 120% target.
3) Additional debt relief is needed from the official or private sectors to reach the 120% target and ensure debt sustainability.
The document provides an analysis and strategy update on China from Deutsche Bank analysts for 2012. Some key points:
- GDP growth is expected to slow to 8.3% in 2012 before accelerating to 8.6% in 2013, supported by 10% EPS growth for Chinese companies.
- Property investment growth will slow significantly in early 2012, potentially dragging down GDP by 1-1.5 percentage points.
- Inflation is expected to fall sharply to around 2.5% by the second quarter of 2012, benefiting sectors such as power and oil refining.
- Several investment themes for 2012 are highlighted, including disinflation, recovery in property and public spending, and dissipating fears
Based on proprietary data and analytic insight, this report gives Dun & Bradstreet's perspective on gloal business conditions for the first half of 2012.
The document provides a quarterly market insight report for the first quarter of 2011. It discusses the positive performance of both stocks and bonds during the quarter despite facing various geopolitical and economic challenges. Stocks posted their best first quarter gains in nearly 15 years, led by the energy and industrial sectors, while bonds achieved low to mid single-digit returns. Looking ahead, volatility is expected to remain for the rest of the year, providing both opportunities and risks for investors.
The document discusses the implications of Hungary's accession to the EU on its investment management industry. It provides background on the development of Hungary's financial services and investment management industries. The investment management industry grew slowly in the 1990s and more rapidly in the late 1990s. Assets under management increased annually by 23% between 1997-2002. The EU accession will significantly impact the Hungarian investment management industry by leveling the regulatory playing field and allowing more competition from foreign investment managers and funds. This may challenge domestic investment managers.
Telecom Italia Group FY 2013 Results - Piergiorgio PelusoGruppo TIM
This document provides a summary of Telecom Italia Group's FY 2013 results. Key highlights include:
- Net debt decreased from €28.3 billion to €26.8 billion due to positive operating free cash flow of €4.8 billion.
- Domestic cash costs were reduced by €497 million, achieving 111% of the annual target through efficiency gains.
- Plans are outlined to strengthen the capital position through various asset sales and refinancing activities projected to increase financial flexibility by over €4 billion.
- The company is launching a €0.5 billion bond buyback and focusing resources on investments to support its broadband upgrade plans in 2014.
The document previews India's upcoming Union Budget for fiscal years 2013-2014. It outlines how the government could meet its fiscal deficit targets of 5.3% for FY2013 and 4.8% for FY2014 through tightening plan expenditures and accounting maneuvers. Lower subsidies would be preferable to higher spending but could hurt growth and consumption in the short-term. Meeting the lower deficit targets could lead to a 25 basis point reduction in expected GDP growth of 5.5% for FY2014. The sustained supply of public sector equity could weigh on the stock market in the near future.
The Business Factors Index is unique within the alternative finance sector. It tracks small business turnover since July 2007 and the trends derived from this data have been collated with the results of a series of interviews conducted with more than 300 business owners across a range of sectors.
The document provides a high-level analysis of India's defense budget for 2013-14. Some key points:
- The capital expenditure budget increased 9% to $16.06 billion compared to the previous year's planned budget.
- The overall defense budget increased 5.31% to $37.72 billion compared to the previous year.
- However, with the appreciation of the US dollar, the budget has not seen a real increase when considering exchange rates.
- The Army and Navy were most affected by reductions to the capital budget in the previous year.
This document provides a pre-budget report and expectations for the upcoming Indian budget. It expects the budget to focus on fiscal stability and credibility, as well as reform initiatives to encourage investment. Specifically, it expects the budget to outline a roadmap for reducing the fiscal deficit while supporting growth, controlling expenditures, and improving the quality of fiscal adjustments. The report also anticipates proposals on taxation, policy reforms, sector-specific expectations, and measures to propel savings and investments.
Gilded Gatekeepers: Myanmar’s State-Owned Oil, Gas and Mining EnterprisesMYO AUNG Myanmar
Gilded Gatekeepers: Myanmar’s State-Owned Oil, Gas and Mining Enterprises
Patrick R.P. Heller and Lorenzo Delesgues
http://www.resourcegovernance.org/sites/default/files/nrgi_Myanmar-State-Owned-Enterprises_Full-Report.pdf
Weak transparency
There has been a distinct lack of public transparency in the management of these SEEs.
Of the 45 state-owned enterprises assessed in NRGI’s worldwide 2013 Resource
Governance Index, only one (Turkmenistan’s Turkmengas) was found to disclose less
information to the public than MOGE. The mining-sector SEEs have been even less
transparent than MOGE in many ways. Shortcomings include a lack of public disclosure
of information on SEEs’ revenues, financial interests, activities and leadership structure
Military involvement
Finally, many interviewees indicated that military-affiliated companies occupy a central
position in the mining industry in particular, though their precise roles and activities
remain unclear. Companies such as the Myanmar Economic Corporation (MEC)
and Union of Myanmar Economic Holdings Limited (UMEHL) are not state-owned
enterprises. They are private companies which many believe are largely owned and
managed by military officers and other public officials. However, many stakeholders
in Myanmar indicated that these companies play important quasi-official roles in
determining who gets access to mining projects and in distributing the benefits of
extraction, overlapping the authority of SEEs in confusing ways and impeding public
accountability.
Estimated value of Myanmar jade trade:
Official estimates: $1 billion.
UN Comtrade report: nearly $12 billion.
Global Witness: as high as $31 billion.
From April 2013 – March 2014, MOGE deposited more into its
“Other Accounts” ($1.4 billion) than Myanmar spent on health ($750 million) or education ($1.1 billion) in FY 2013/14.
The document provides an overview of the key policy announcements and proposals in the Union Budget of India for 2012-13. Some of the major highlights include setting the fiscal deficit target at 5.1% of GDP, rationalization of subsidies, measures to boost infrastructure, agriculture and manufacturing. Direct tax proposals include no change in corporate tax rates but scope of alternate minimum tax extended. Indirect tax proposals lay the groundwork for nationwide implementation of GST.
The key features of the Budget 2012-2013 document outlines India's economic growth slowing to 6.9% in 2011-2012 due primarily to deceleration in industry. It aims to improve the macroeconomic environment and strengthen domestic growth drivers through the Twelfth Five Year Plan. The budget targets reducing the effective revenue deficit and central subsidies while increasing capital spending and investment in critical sectors through policy reforms like the Goods and Services Tax and increased foreign direct investment.
The document summarizes key features of India's Budget for 2012-2013. It discusses the state of the Indian economy, subsidies, tax reforms, infrastructure development, agriculture, inclusion programs, and other policy areas. The budget aims to boost growth while improving fiscal sustainability through measures like reducing the effective revenue deficit and bringing down subsidies.
The document summarizes key features of India's Budget for 2012-2013. It discusses the state of the Indian economy, subsidies, tax reforms, infrastructure development, agriculture, inclusion programs, and other economic priorities. The budget aims to boost growth while improving fiscal stability and increasing investment in infrastructure and social programs.
The document summarizes key features of India's Budget for 2012-2013. It notes that GDP growth is estimated to slow to 6.9% for 2011-2012 due to global economic issues. Inflation is expected to moderate in the coming months. The budget aims to improve the macroeconomic environment and strengthen domestic growth drivers through the launch of the Twelfth Five Year Plan. It focuses on reducing the fiscal deficit and subsidies as a percentage of GDP while increasing capital expenditures. Major reforms include implementing the Goods and Services Tax and allowing more foreign investment.
Pwc entertainment and-media-outlook-registrationPraful Baweja
The document provides an executive summary of the Indian entertainment and media (E&M) outlook for 2009-2013. It finds that while India's E&M industry grew at an average of 16.6% from 2004-2008, growth is expected to moderate to around 8% in 2009 and 10.5% annually from 2009-2013 due to the global economic slowdown. However, strong fundamentals such as rising consumption, a positive investment climate, and low media penetration indicate potential for robust long-term growth. The report also notes some recent regulatory and budget changes that could benefit the E&M industry in India.
- The document discusses Aimia's Q3 2013 financial highlights and year-to-date 2013 consolidated financial results. Key highlights include 7.4% growth in gross billings and 4.5% growth in adjusted EBITDA compared to last year.
- Gross billings growth was driven by strong performance in US & APAC (+29.5% cc) and Canada (+3.2%), partially offset by declines in EMEA (+1.7% cc).
- On a year-to-date basis, gross billings increased 4.9% to $1.7 billion. However, operating income declined due to a $683.6 million breakage adjustment related to changes in the
- The credit portfolio grew 2.6% in 4Q12 and 21.1% in 2012, with 99% of new loans rated between AA and B.
- Non-performing loans over 60 days fell to 1.5% in 4Q12 from 3.0% in 3Q12 and 5.0% in 4Q11.
- Net profit was R$3.6 million in 4Q12 and R$14.2 million for 2012, up 15.8% and 144.8% respectively.
- The accounting and finance market in Singapore was mixed in 2011, with strong hiring early in the year but slowing significantly in the second half as the European sovereign debt crisis impacted financial institutions.
- Salaries for permanent roles ranged from $40k-$330k depending on level, with bonuses likely to be reduced or eliminated for 2012. Demand remained for commodities, product control and management reporting professionals but employers became highly selective
Telecom Italia Group FY 2013 Results - Piergiorgio PelusoGruppo TIM
This document provides a summary of Telecom Italia Group's FY 2013 results. Key highlights include:
- Net debt decreased from €28.3 billion to €26.8 billion due to positive operating free cash flow of €4.8 billion.
- Domestic cash costs were reduced by €497 million, achieving 111% of the annual target through efficiency gains.
- Plans are outlined to strengthen the capital position through various asset sales and refinancing activities projected to increase financial flexibility by over €4 billion.
- The company is launching a €0.5 billion bond buyback and focusing resources on investments to support its broadband upgrade plans in 2014.
The document previews India's upcoming Union Budget for fiscal years 2013-2014. It outlines how the government could meet its fiscal deficit targets of 5.3% for FY2013 and 4.8% for FY2014 through tightening plan expenditures and accounting maneuvers. Lower subsidies would be preferable to higher spending but could hurt growth and consumption in the short-term. Meeting the lower deficit targets could lead to a 25 basis point reduction in expected GDP growth of 5.5% for FY2014. The sustained supply of public sector equity could weigh on the stock market in the near future.
The Business Factors Index is unique within the alternative finance sector. It tracks small business turnover since July 2007 and the trends derived from this data have been collated with the results of a series of interviews conducted with more than 300 business owners across a range of sectors.
The document provides a high-level analysis of India's defense budget for 2013-14. Some key points:
- The capital expenditure budget increased 9% to $16.06 billion compared to the previous year's planned budget.
- The overall defense budget increased 5.31% to $37.72 billion compared to the previous year.
- However, with the appreciation of the US dollar, the budget has not seen a real increase when considering exchange rates.
- The Army and Navy were most affected by reductions to the capital budget in the previous year.
This document provides a pre-budget report and expectations for the upcoming Indian budget. It expects the budget to focus on fiscal stability and credibility, as well as reform initiatives to encourage investment. Specifically, it expects the budget to outline a roadmap for reducing the fiscal deficit while supporting growth, controlling expenditures, and improving the quality of fiscal adjustments. The report also anticipates proposals on taxation, policy reforms, sector-specific expectations, and measures to propel savings and investments.
Gilded Gatekeepers: Myanmar’s State-Owned Oil, Gas and Mining EnterprisesMYO AUNG Myanmar
Gilded Gatekeepers: Myanmar’s State-Owned Oil, Gas and Mining Enterprises
Patrick R.P. Heller and Lorenzo Delesgues
http://www.resourcegovernance.org/sites/default/files/nrgi_Myanmar-State-Owned-Enterprises_Full-Report.pdf
Weak transparency
There has been a distinct lack of public transparency in the management of these SEEs.
Of the 45 state-owned enterprises assessed in NRGI’s worldwide 2013 Resource
Governance Index, only one (Turkmenistan’s Turkmengas) was found to disclose less
information to the public than MOGE. The mining-sector SEEs have been even less
transparent than MOGE in many ways. Shortcomings include a lack of public disclosure
of information on SEEs’ revenues, financial interests, activities and leadership structure
Military involvement
Finally, many interviewees indicated that military-affiliated companies occupy a central
position in the mining industry in particular, though their precise roles and activities
remain unclear. Companies such as the Myanmar Economic Corporation (MEC)
and Union of Myanmar Economic Holdings Limited (UMEHL) are not state-owned
enterprises. They are private companies which many believe are largely owned and
managed by military officers and other public officials. However, many stakeholders
in Myanmar indicated that these companies play important quasi-official roles in
determining who gets access to mining projects and in distributing the benefits of
extraction, overlapping the authority of SEEs in confusing ways and impeding public
accountability.
Estimated value of Myanmar jade trade:
Official estimates: $1 billion.
UN Comtrade report: nearly $12 billion.
Global Witness: as high as $31 billion.
From April 2013 – March 2014, MOGE deposited more into its
“Other Accounts” ($1.4 billion) than Myanmar spent on health ($750 million) or education ($1.1 billion) in FY 2013/14.
The document provides an overview of the key policy announcements and proposals in the Union Budget of India for 2012-13. Some of the major highlights include setting the fiscal deficit target at 5.1% of GDP, rationalization of subsidies, measures to boost infrastructure, agriculture and manufacturing. Direct tax proposals include no change in corporate tax rates but scope of alternate minimum tax extended. Indirect tax proposals lay the groundwork for nationwide implementation of GST.
The key features of the Budget 2012-2013 document outlines India's economic growth slowing to 6.9% in 2011-2012 due primarily to deceleration in industry. It aims to improve the macroeconomic environment and strengthen domestic growth drivers through the Twelfth Five Year Plan. The budget targets reducing the effective revenue deficit and central subsidies while increasing capital spending and investment in critical sectors through policy reforms like the Goods and Services Tax and increased foreign direct investment.
The document summarizes key features of India's Budget for 2012-2013. It discusses the state of the Indian economy, subsidies, tax reforms, infrastructure development, agriculture, inclusion programs, and other policy areas. The budget aims to boost growth while improving fiscal sustainability through measures like reducing the effective revenue deficit and bringing down subsidies.
The document summarizes key features of India's Budget for 2012-2013. It discusses the state of the Indian economy, subsidies, tax reforms, infrastructure development, agriculture, inclusion programs, and other economic priorities. The budget aims to boost growth while improving fiscal stability and increasing investment in infrastructure and social programs.
The document summarizes key features of India's Budget for 2012-2013. It notes that GDP growth is estimated to slow to 6.9% for 2011-2012 due to global economic issues. Inflation is expected to moderate in the coming months. The budget aims to improve the macroeconomic environment and strengthen domestic growth drivers through the launch of the Twelfth Five Year Plan. It focuses on reducing the fiscal deficit and subsidies as a percentage of GDP while increasing capital expenditures. Major reforms include implementing the Goods and Services Tax and allowing more foreign investment.
Pwc entertainment and-media-outlook-registrationPraful Baweja
The document provides an executive summary of the Indian entertainment and media (E&M) outlook for 2009-2013. It finds that while India's E&M industry grew at an average of 16.6% from 2004-2008, growth is expected to moderate to around 8% in 2009 and 10.5% annually from 2009-2013 due to the global economic slowdown. However, strong fundamentals such as rising consumption, a positive investment climate, and low media penetration indicate potential for robust long-term growth. The report also notes some recent regulatory and budget changes that could benefit the E&M industry in India.
- The document discusses Aimia's Q3 2013 financial highlights and year-to-date 2013 consolidated financial results. Key highlights include 7.4% growth in gross billings and 4.5% growth in adjusted EBITDA compared to last year.
- Gross billings growth was driven by strong performance in US & APAC (+29.5% cc) and Canada (+3.2%), partially offset by declines in EMEA (+1.7% cc).
- On a year-to-date basis, gross billings increased 4.9% to $1.7 billion. However, operating income declined due to a $683.6 million breakage adjustment related to changes in the
- The credit portfolio grew 2.6% in 4Q12 and 21.1% in 2012, with 99% of new loans rated between AA and B.
- Non-performing loans over 60 days fell to 1.5% in 4Q12 from 3.0% in 3Q12 and 5.0% in 4Q11.
- Net profit was R$3.6 million in 4Q12 and R$14.2 million for 2012, up 15.8% and 144.8% respectively.
- The accounting and finance market in Singapore was mixed in 2011, with strong hiring early in the year but slowing significantly in the second half as the European sovereign debt crisis impacted financial institutions.
- Salaries for permanent roles ranged from $40k-$330k depending on level, with bonuses likely to be reduced or eliminated for 2012. Demand remained for commodities, product control and management reporting professionals but employers became highly selective
Similar to Avascent defense monthly january 2013 (16)
1. February 2013
ABOUT AVASCENT
Avascent is the leading management and strategy consulting firm
advising clients who serve government and related commercial markets
Executive Summary
Contractors are reporting 4Q and full year 2012 results including Budget Highlights
2013 guidance; as the March 1 sequestration deadline approaches, Budget uncertainties continue to loom
investors increasingly see sequestration-magnitude cuts as a reality large over defense stock performance
and are locking down 2012 paper profits. We should expect - The Jan. 1 ATRA deal delayed
sequestration until March 1, 2013
continued volatility through the first half of 2013.
and removed $6B from the
President’s FY13 budget
Macro Environment - If sequestration is triggered, another
Companies began reporting 4Q and full year 2012 results and are $7B installment will be removed from
communicating FY13 revenue and EPS guidance to the Street the budget March 31, toward a total
Of the companies that have reported to date, the majority believe that of $41B in GFY13
sequestration will be triggered on March 1 and accord high probability - The Pentagon must submit its
to a full-year continuing resolution scenario strategy for dealing with
Nevertheless, most companies’ FY13 guidance does not account for sequestration to the White House by
sequestration—likely because the cuts will not materially affect Feb. 8
business until FY14 - The FY13 CR, funding the federal
Industry has reported changes in customer behavior over the quarter government at 2012 levels and
as department and program officers begin to prepare for sequestration restricting new starts, also expires
and/or a full year CR March 31; a full-year CR will disrupt
As Fig. 1 below shows, the Big 5, reporting Jan. 23-Jan. 30, lost 4% to of major programs
8% of their value as investors came to grip with the fiscal realities According to industry, customer buying
impacting the sector; as of Feb. 6, the Big 5 are down ~7% YTD patterns reflect a working assumption
Of the Avascent indices, the Hybrid Index has outperformed both the that sequestration and/or a full year CR
commercial benchmark and its defense peers; for defense equities, the will take effect
downward trend continues into February
Figure 1: Avascent Defense and S&P 500 Indices % Change in Share Price, January 2013
-10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0%
Avascent Hardware Index Avascent Hybrid Index Avascent Services Index Big 5 S&P 500 Index
6% GY
4% GEOY
FNC
2%
SAI
0% FLIR
-2% ^DJI
HO
-4%
^SPX
-6% ATK
16-Jan
10-Jan
11-Jan
12-Jan
13-Jan
14-Jan
15-Jan
17-Jan
18-Jan
19-Jan
20-Jan
21-Jan
22-Jan
23-Jan
24-Jan
25-Jan
26-Jan
27-Jan
28-Jan
29-Jan
30-Jan
1-Jan
2-Jan
3-Jan
4-Jan
5-Jan
6-Jan
7-Jan
8-Jan
9-Jan
KBR
NCI
HII
Source: Cap IQ; Avascent analysis
KEYW
QQ.
AVAV
2. Avascent Defense Universe
GY, GEOY and FNC are this month’s top performers. GY has recently secured financing to acquire United
Technologies’ space unit, Rocketdyne, which will double GY’s market capitalization. GEOY’s shares are up due to
its proposed acquisition by Digital Globe, approved today by GEOY’s board. FNC’s share price movement is
influenced by Italian market trends, though the company may also be benefiting from its recently-announced
teaming agreement with GD on Air Force T-38 trainers.
RTN’s shares were the biggest losers within the Avascent Defense Index, shedding ~8.5% of their value in January
despite strong 4Q and full year results, including a robust FY13 funded backlog. There seems to be no clear
explanation, but we can offer two conjectures:
From Nov. 2012 through Jan. 21, RTN shares appreciated ~7%; it is likely that investors have decided to lock
down some of these paper profits ahead of the earnings release.
Investors may have been rotating to other defense stocks, such as GD/NOC; both of these companies have gone
through recent corporate resets and may have more margins upside.
LMT’s shares dropped 6% for the month following the company’s announcement that it made a $2.5B
contribution to its pension plan; investors are concerned that the move will leave the company with less cash for
FY13 share buybacks
With new management at the helm, GD took advantage of the Street’s grace period and recorded a non-cash
charge of ~$3B in goodwill impairment and other restructuring costs. The company also announced a significant
drop in YoY revenue for Combat Systems (~$800M) due to declining business in European Land Systems
Figure 2: Avascent Defense Index Universe Monthly Performance: January 1- January 31
-10% -5% 0% 5% 10% 15% 20%
GY
Avascent Services GEOY
FNC
Avascent Hardware SAI
FLIR
Big Five ^DJI
Industry Indices HO
^SPX
ATK
KBR
NCI
HII
KEYW
QQ.
AVAV
BAH
LLL
BA.
VSEC
XLS
CACI
NOC
GD
ESLT
MANT
LMT
RTN
Source: Cap IQ; Avascent analysis