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Actionable news in LMT: LOCKHEED MARTIN Corp,

Playing Defense — Lockheed, Northrop Beating General Dynamics

When you have a stock market that has become expensive on a price-to-earnings basis, technical momentum on weekly charts becomes the best tool as to when to invest and when to book profits.

When a stock continues to trade to new highs, weekly closes are above its key weekly moving average with rising weekly momentum readings that eventually risees into overbought territory. When these indicators start to deteriorate its time to reduce holdings regardless of P/E ratio and dividend yield.

This notion and analysis will be put to the test when defense contractors General Dynamics (GD) , Lockheed Martin (LMT) and Northrop Grumman (NOC) report their second-quarter earnings over the next few weeks.

Defense stocks have a built-in friend: national governments that need more protection. TheStreet's Jim Cramer, whose Action Alerts PLUS portfolio holds Lockheed, recently wrote the company "sits in an industry benefiting from serious secular growth -- namely, increases in defense spending. As we've noted time and again, stability and income generation will win out in this uncertain market and LMT fits the bill."

Lockheed Martin is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells LMT? Learn more now.

Lockheed Martin has the strongest momentum and will be the first to report earnings before the opening bell on July 19. Analysts expect the company to earn $2.92 a share.

Northrop Grumman also has strong momentum and will be reporting second quarter results before the opening bell on July 27. Analysts expect the company to earn $2.49 a share.

General Dynamics does not have the upward momentum, but will...