With the potential for more military conflicts throughout the world the defense stocks on our list could see even greater demand for their products
SmallCapPower | April 24, 2018: Although concerns about the possibility of U.S. interventions in North Korea and Syria have negatively impacted the market as a whole, Aerospace & Defense companies in the U.S. have increased 10% YTD, compared to the TSX and the NYSE, which have declined 2% and 5%, respectively. While the defense sector in Canada is comparatively small, the defense stocks on our list today could see strong returns should demand from their U.S. customers increase.
Security Devices International Inc. (TSXV:SDZ) – $0.21
Aerospace & Defense
Security Devices International is a U.S.-based defense company. The Company primarily manufactures less-lethal 40mm ammunition in several varieties, including standard rounds, liquid and gas rounds, and training rounds. SDZ’s ammunition is more accurate than rubber bullets.
- Market Cap: $19.7 Million
- 1 Week Total Return: 2.4%
- 1 Month Total Return: 7.7%
- YTD Total Return: 20.0%
Patriot One Technologies Inc. (TSXV:PAT) – $1.69
Electronic Equipment & Parts
Founded by the former U.S. Secretary of Homeland Security, Patriot One Technologies is a Canada-based tech company focused on the development of its PATSCAN CMR technology. PATSCAN CMR is a cost-effective portable weapons identification technology. It learns from previous measurements to improve its detection ability, with a 93% accuracy rate, outperforming standard measures, which have a ~73% accuracy.
- Market Cap: $182.5 Million
- 1 Week Total Return: -2.9%
- 1 Month Total Return: -4.0%
- YTD Total Return: 35.2%
Ammo Inc. (OTC:POWW) – $7.76
Aerospace & Defense
Ammo Inc. is a U.S. ammunition manufacturer operating four brands of bullets. The Company produces STREAK tracer-style ammunition, Jesse James ammunition, the One Precise Shot law enforcement ammunition, and /stealth/ suppressed firearms ammunition. Ammo aims to expand its retail presence, recently beginning distribution to Gander Outdoors and Crow Shooting Supply.
- Market Cap: $218.0 Million
- 1 Week Total Return: 1.5%
- 1 Month Total Return: 35.4%
- YTD Total Return: 93.0%
Comtech Telecommunications Corp. (NASDAQ:CMTL) – $39.78
Communications & Networking
Comtech is a U.S.-based telecommunications company servicing commercial and U.S. government entities. Its commercial division provides satellite modems, 911 routing, and location and enterprise services. The Company’s Government Solutions division provides C4ISR command and control solutions, satellite communications, and assorted electronic defense systems.
- Market Cap: $939.5 Million
- 1 Week Total Return: 0.3%
- 1 Month Total Return: 7.2%
- YTD Total Return: 42.1%
Vectrus Inc. (NYSE:VEC) – $49.80
Business Support Services
Vectrus provides support services to the U.S. military. The Company provides logistics services, secure network construction, and perimeter protection systems. About 82% of the Company’s business is conducted with the Army, with 16% and 2% going to the Air Force and Navy, respectively. Vectrus is guided to increase its revenue 4% to 1,275M, leveraging its 2.9B backlog.
- Market Cap: $558.8 Million
- 1 Week Total Return: 3.7%
- 1 Month Total Return: 3.7%
- YTD Total Return: 26.5%
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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