Lockheed Martin: Shocking Reason to Be Bullish on Lockheed Martin Stock

Lockheed martinLockheed Martin Stock Could be One of the Big Winners of the U.S. Election  

Whatever the outcome of the United States presidential election, investors may want to pay more attention to what the new U.S. Congress will look like. The market impact of the elections will depend largely on which party gains—or retains—control.

Investing in Lockheed Martin Corporation (NYSE:LMT) could be one of the best ways to hedge against the electoral results. Lockheed Martin stock has great potential, regardless of who wins. Hillary Clinton could be even better than Donald Trump for LMT stock, but the stock could hit record highs in 2017, regardless of who sits in the Oval Office.

In the lesser chance that Trump manages an upset in the polls, stock and bond markets could see volatility. The markets already got a hint of it last week. Clinton’s uncertain prospects, in the face of a now-abandoned FBI investigation, put pressure on the markets.

Investors generally fear Trump. First, there is the unknown factor. Nobody can predict with accuracy the direction that the U.S. might take with the Republican candidate at the helm. It’s not a matter of better or worse. Based on the campaign, a Trump administration would pursue isolationism in foreign policy (as in anti-free-trade and even anti-NATO), immigration policy, transatlantic trade, and military alliances. This would intensify the climate of uncertainty. LMT stock could be the best cushion to absorb this kind of shock.

Until a few days ago, the markets seemed to have already priced a Clinton victory as being in the bag. Should the Democrat candidate win, as most believe, the pharmaceutical sector might be a big loser. At first, Clinton might also give the impression of tightening government’s grip on Wall Street, targeting the big banks like Goldman Sachs Group Inc (NYSE:GS) to please Bernie Sanders supporters. But a Trump win might be an even bigger punch in the stomach for Wall Street bankers.

LMT Stock Investors Win With Either Donald or Hillary 

Trump, the construction tycoon, said he would heavily boost the defense budget. He would buy more planes, ships, tanks, and helicopters. LMT stock would certainly gain from that plan, but Lockheed Martin stock and other defense stocks would also gain just as well under Clinton. If Congress should somehow turn Democrat, Clinton’s party colleagues would support her. If Congress stays Republican, they would support her on military spending as well. On that issue, Clinton has already earned the support of all Republican congressional candidates.

Lockheed Martin could have even better prospects under Clinton. Whereas Donald has expressed a willingness to discuss policies with Russia, Hillary has crossed many diplomatic lines with the Kremlin. Her campaign has accused Russia of interference in the election. Clinton seems poised to step up the U.S. involvement in the Middle East. She has often spoken of enforcing a no-fly zone in Syria. The Russians won’t be too pleased about that.

It is likely that, as president, Hillary Clinton would not only pursue ISIS, as the Barack Obama administration has done; she would pursue even tougher policies all around. Nobody can discount her intentions; regime change in Syria remains an option.

Meanwhile, back in the world of reality, speculation aside, the facts on LMT stock have much to say on their own. In its most recent quarter, reported on October 25, the company boasted diluted earnings per share of $7.93. This was much higher than analysts expected. Quarterly revenue rose 14.8% year-on-year to $11.55 billion, well above the $11.45 billion on average expected by markets. Aerospace alone increased 6.8% over the quarter.

While missile sales were slightly down, Lockheed Martin has revised its guidance upward to $46.5 billion from $45.0 billion.

The Bottom Line on LMT stock

Lockheed Martin is the world’s leading supplier of defense systems. It stands to benefit from the improved outlook for military spending, regardless of who wins the U.S. presidential election. Indeed, given the likely direction of Hillary Clinton’s foreign policy, her win might be even more bullish for LMT stock than most people realize. Add to that the fact that Europe has also increased its military spending.

If it seemed difficult for LMT stock to hit the $275.00 range in 2016, it has a good shot at exceeding this target in 2017. Last August, LMT went as high as $266.00. Volatility has hurt Lockheed Martin stock, but, regardless of who wins the election, it is that rare stock that could gain.