Early Newsvesting Observation for 2016 Proves to be Profitable
By Matt Towery
The Newsvesting blog continues after a break with months of analyzing presidential primary polling for various FOX affiliates and NewsmaxTV. So here is a quick follow-up on my last observations of January 5, 2016.
In that post I noted: “Yes, the jolting dip that the financial markets took on their first day of trading in 2016 was a bit of a shock. And yes, it probably had a lot to do with China and its lagging economy. But in reality, the backdrop to the losses of Monday had more to do with unrest and agitation on the geopolitical stage than the economy of one more or more of the major players on that stage.”
I suggested to readers what my favorite defense-related stocks were and why. Here’s part of that January 5th discussion: “In my book Newsvesting, I chose big name defense contractors Lockheed Martin (LMT) and Northrop Grumman (NOC) as stocks to invest in through 2014-15. Both pay reasonable dividends and both have enjoyed substantial growth in their per share price over the past two years.” I added to those name another: “Another favorite of mine, as detailed in my book Newsvesting, is Elbit Systems (ELST), a smaller cap defense company with a yield of close to 2% and another example of a big winner in 2015. Its 52 week low is $59.91. Even after Monday’s brutal market, its prices was $86.65.”
Readers can take a look at the detailed reasoning behind my January 5th post, but in the most simplistic way I summed it all up with this: “For a number of years, defense stocks have seemed less than “sexy.” But with the world dealing with the resurgence of old military powers, the emergence of new threatening powers, and the growing threat of terror from new sources, the defense industry is a “newsvesting” opportunity in 2016 and beyond.”
So, lets see how these early year set of observations are playing out today. On January 5, 2016 shares of Northrup Grumman (NOC) closed at $192.36. On April 7, NOC closed at $216.36. As for Lockheed Martin, the closing price on January 5th of this year was $218.26. It closed on April 7th at $226 and change. And Elbit Systems rose from a closing price on January 5th of $87.21 to an April 7th close of $95.80.
So, looking at these three stocks, here are their YTD performances: NOC- up 6.22%; LMT- up 4.3%; ELST- up 8.96%. All three are outperforming the DOW, NASDAQ, and S&P while delivering reasonable yields of between 1.6% (NOC), and 2.9% (LMT).
Holding shares in strong companies while the world is on edge and security issues abound is a sound investment move, in my opinion. Getting paid to own those stocks with reasonable dividends makes it all the better.
Coming soon–more Newsvesting as I extract myself from the world of political analysis and plunge back into the Newsvesting world. Want to learn more about how to Newsvest? Go to our home page at http://www.newsvesting.com and purchase the true guide that tells you how to Newsvest on your own. You can also view or read recent interviews I’ve done with TheStreet.Com and Forbes.
And remember, I’m a lawyer, pollster, and investor, but not a professional investment advisor. You should consult a licensed broker or financial planner before making investments. But your Newsvesting knowledge might put you in a better position to use their advice to profit from the news that overwhelms us all on a daily basis! “Have fun storming the castle!”