The vast majority of people are appalled by the violence in Syria, Iraq, Libya, Ukraine and other parts of the world. Meanwhile there are companies producing small arms and ammunition for the various battlefields of the world. High tech surveillance gear and weapons such as drones have been used more and more in battle and the makers of these are going to profit as conflicts continue and even worsen. Trading arms makers can be a profitable undertaking in times of uncertainty and outright war. If you want to look into trading arms makers for a profit what are the companies that you will want to look at? The market is huge with a trillion and a half dollars spent yearly on the purchase of weapons and weapons systems.
National Arms Expenditures for Top 15 Nations, 2013
|Rank||Nation||Billions of Dollars|
|15||United Arab Emirates||19.0|
The majority of arms purchased by a given nation will tend to be manufactured in that nation. This applies especially to the most industrialized nations. However, companies that produce unique and high tech weaponry tend to export where there is a buyer. The major exporters are from the USA, Russia and the UK.
|The Top Arms Exporting Companies in the World|
|Rank||Company||Arms Export Value|
|1||Lockheed Martin, USA||$6.4 Billion|
|2||Boeing, USA||$5.6 Billion|
|3||United Aircraft Corp, Russia||$4 Billion|
|4||Raytheon, USA||$3.7 Billion|
|5||BAE, UK||$3.7 Billion|
Both sound fundamental and technical analysis are needed to profit in trading arms makers. It is also useful look outside of the major producers to find stocks that may be more volatile and likely to provide the trader with a profit. For example, Israel has a growing arms industry and is a major supplier of drones throughout the world. Israel has supplied as high as ten percent of world exports as recently as 2007. Israeli arms producers are as follows:
- Israel Military Industries Ltd. (IMI): firearms, ammunition and military technology mainly for Israeli security forces buts small arms sell world wide
- Israel Weapon Industries (IWI): a group of companies that develops and manufactures a wide array of guns and rifles used by armies and law enforcement agencies across the globe
- Rafael Advanced Defense Systems: develops and produces weapons, military, and defense technologies for the Israel Defense Forces and for export. It currently has a large number of classified projects.
- Elbit Systems Ltd. (ESLT): an international defense electronics company focused on aerospace, command, control, communications, and other services.
It is of note that Elbit Systems trades in the USA as an American Depository Receipt which makes trading foreign stocks easier and safer.
Picking Stocks to Trade
Trading arms makers can be profitable. But the stock needs to have some volatility. Lockheed Martin, the leading arms exporter traded for $122 a share within the last year and trades for $175 today. Raytheon has been trading between $77 and $102 a share for the last year. Elbit systems has traded between $55 a share and $64 a share for the last year but has been volatile within that range. Trading arms makers for profit requires that you have a clear idea for the market for the company’s products and follow technical analysis indicators to assess market sentiment.