10 Best Defense Stocks To Invest In 2014

Northrop Grumman (NYSE: NOC  ) is helping the U.S. Navy develop its next-generation laser gun.

On Tuesday, Northrop announced that it has been awarded a Navy R&D contract to help "mature" solid state laser technology for use in shipboard defense. If testing bears fruit, the Navy ultimately hopes to build a prototype laser weapon system to test its usefulness aboard warships. The value of Tuesday's contract award was not disclosed.

Northrop has already worked on similar laser gun projects for the Navy, helping to demo the first-ever high-energy laser�fired at sea in the 2011 Maritime Laser Demonstration. It was also involved in the Laser Weapon Test demonstration that made headlines last month, and it played an integral part in the Air Force's Airborne Laser program several years ago, before the ABL program was canceled.

The challenge for Northrop now will be to progress past R&D work and demonstration projects to -- as Steve Hixon, the company's vice president for directed energy at Northrop Grumman Aerospace Systems, puts it -- "help the Navy mature the weapon system for use by sailors in the real world."�

Hot Up And Coming Companies To Own For 2015: Esterline Technologies Corp (ESL)

Esterline Technologies Corporation (Esterline) is a manufacturing company serving aerospace and defense customers. The Company designs, manufactures and markets engineered products and systems. It operates in three segments: Avionics & Controls, Sensors & Systems, and Advanced Materials, including thermally engineered components and specialized elastomers and other complex materials, for aerospace and defense markets. Its products are mission-critical equipment, which have been designed into particular military and commercial platforms. It has divested non-core businesses operating as Pressure Systems, Inc., Muirhead Aerospace and Traxsys Input Products Limited. In July 2011, the Company acquired Souriau Group. In December 2013, the Company announced that it has completed acquisition of Joslyn Sunbank Company, LLC, a unit of Meggitt PLC.

Avionics & Controls

The Company�� Avionics & Controls business segment includes avionics systems, control systems, interface technologies and communication systems capabilities. Avionics systems designs and develops cockpit systems integration and avionics subsystems for commercial and military applications. Control systems designs and manufactures technology interface systems for military and commercial aircraft and land- and sea-based military vehicles. Interface technologies manufactures and develops custom control panels and input systems for medical, industrial, military and casino gaming industries. Communication systems designs and manufactures military audio and data products for severe battlefield environments. In addition, communication systems designs and manufactures secure voice and data switching systems for military airborne, ground-based, and shipboard applications. It is engaged in positioning systems (GPS), head-up displays, enhanced vision systems, and electronic flight management systems that are used in a range of control and display applications. In addition, it develops, manufactures and markets technology interface ! systems for commercial and military aircraft. These products include lighted push-button and rotary switches, keyboards, lighted indicators, panels and displays. Its products have been integrated into aircraft designs, including Boeing commercial aircraft platform in production. It manufactures control sticks, grips and wheels, as well as specialized switching systems. In this area, it serves commercial and military aviation, and airborne and ground-based military equipment manufacturing customers.

The Company�� products are incorporated in a range of platforms ranging from military helicopters, fighters and transports, to commercial wide- and narrow-body, regional and business jets. During fiscal year ended October 29, 2010 (fiscal 2010), its customers for these products included BAE Systems, The Boeing Company, Canadian Commercial Corp., Hawker Beechcraft, Honeywell, Hamilton Sunstrand, Lockheed Martin, Rockwell Collins, and Sikorsky. It is also a supplier in custom input integration with a range of keyboard, switch and input technologies for specialized medical equipment, communications systems and comparable equipment for military applications. These products include custom keyboards, keypads, and input devices that integrate cursor control devices, bar-code scanners, displays, video, and voice activation. It also produces instruments that are used for point-of-use and point-of-care in vivo diagnostics. It has developed a range of technologies, including plastic and vinyl membranes that protect high-use switches and fully depressible buttons, and backlit elastomer switch coverings that are resistant to exposure from harsh chemicals. During fiscal 2010, its customers for these products included Alere, Dictaphone, DRS Tactical Systems, General Electric, IDEXX Laboratories, Jabil Circuit, Philips, Roche, Siemens, and WMS.

The Company designs and manufactures military personal communication equipment, primarily headsets. It is a sole supplier of active noise reduction (ANR)! headsets! to the British Army�� tracked and wheeled vehicle fleets under the Bowman communication system program. In the United States, it supplies ANR headsets to the U.S. Army�� tracked and wheeled vehicle fleets under the vehicle intercom system (VIS) and VIS-X programs comprising over 200,000 vehicles, and it is supplier to the United States Marine Corps for their M-ATV fleet. It is ANR headset supplier to the Canadian Army. During fiscal 2010, its customers for these products included Northrop Grumman, Lockheed Martin, Simex Defense, Sanmina-SCI, and the British Ministry of Defence (MoD).

The Company competes with Astronautics, BAE, Bose, ELBIT, EMS, Eaton, GE Aerospace, Honeywell, IAI, L-3, Otto Controls, RAFI, Rockwell Collins, SELEX, Telephonics, Thales, Ultra Electronics, Universal Avionics Systems Corporation and Zodiac.

Sensors & Systems

The Company�� Sensors & Systems business segment includes power systems and advanced sensors capabilities. It develops and manufactures temperature, pressure and speed sensors, electrical power switching, control and data communication devices, and other related systems for aerospace and defense customers. It is a supplier of temperature probes for use on all versions of the General Electric/Snecma CFM-56 jet engine. The customers for its products in this business segment are jet engine manufacturers and airframe manufacturers. During fiscal 2010, some of its customers for these products included The Boeing Company, Bombardier, Dassault, Eurocopter, Flame, General Electric, Honeywell, Rolls Royce, and SAFRAN.

The Company competes with Ametek, Eaton, Goodrich, Hamilton Sundstrand, MPC Products, Meggitt, STPI-Deutsch, Tyco and Zodiac.

Advanced Materials

The Company�� Advanced Materials business segment includes engineered materials and defense technologies capabilities. It develops and manufactures elastomer products used in a range of commercial aerospace, space, and military appl! ications,! and engineered thermal components for commercial aerospace and industrial applications. It also develops and manufactures combustible ordnance and countermeasures for military applications. It specializes in the development of formulations for silicone rubber and other elastomer products. Its elastomer products are engineered to address specific customer requirements where high temperature, high pressure, caustic, abrasive and other difficult eis critical. These products include clamping devices, thermal fire barrier insulation products, sealing systems, tubing and coverings designed in custom-molded shapes. It is a the United States supplier of performance elastomer products to the aerospace industry, with its customers for these products being jet and rocket engine manufacturers, commercial and military airframe manufacturers, as well as commercial airlines. During fiscal 2010, its customers included Alliant Techsystems, The Boeing Company, Honeywell, KAPCO, Lockheed Martin, Northrop Grumman, and Pattonair. It also develops and manufactures lightweight metallic insulation systems for aerospace and marine applications. Its commercial aerospace programs include the 737, A320, and A380 series aircraft and the V2500 and BR710 engines. Its insulation material is used on diesel engine manifolds for earthmoving and agricultural applications. In addition, it specializes in the development of thermal protection for fire, nuclear, and petro-chemical industries. It designs and manufactures temperature components for industrial and marine markets. Its manufacturing processes consist of cutting, pressing, and welding stainless steel, Inconel and titanium fabrications. During fiscal 2010, its customers of these products included Airbus, The Boeing Company, Goodrich, GKN Aerospace, Northrop Grumman, Pattonair, Rolls Royce, Short Brothers, Spirit AeroSystems, and Volvo.

The Company develops and manufactures combustible ordnance and warfare countermeasure devices for military customers. It manufactures ! molded fi! ber cartridge cases, mortar increments, igniter tubes and other combustible ordnance components for the United States Department of Defense. It also monitors safety metrics to ensure compliance. It is a supplier of combustible casings utilized by the United States Armed Forces. These products include the combustible case for the United States Army�� new generation 155 millimeters Modular Artillery Charge System, the 120 millimeters combustible case used with the main armament system on the United States Army and Marine Corps��M1-A1/2 tanks, and the 60 millimeters, 81 millimeters and 120 millimeters combustible mortar increments. It is a supplier of United States Army of infrared decoy flares used by aircraft to help protect against radar and infrared guided missiles. In addition it is a supplier of infrared decoy flares to the MoD and other international defense agencies.

The Company competes with Chemring, Doncasters, Hitemp, J&M, JPR Hutchinson, Kmass, Dunlop Standard Aerospace Group, Rheinmetall, Trelleborg, ULVA and UMPCO.

Advisors' Opinion:

• [By Ben Levisohn]

  Since the initial drop, shares of United Tech have bounced back a bit. They’re down 0.8% at $106.93 at 12:03 p.m. That drop puts it out of step with other industrial stocks, which have been stronger today. General Electric (GE), for instance, has gained 1.1% to $24.16, Honeywell International (HON) has ticked up 0.2% to $83.19, Esterline (ESL) has risen 0.7% to $80.45 and Northrop Grumman (NOC) is up 0.6% at $95.87.

10 Best Defense Stocks To Invest In 2014: RELM Wireless Corp (RWC)

RELM Wireless Corporation (RELM) provides two-way radio communications equipment. RELM designs, manufactures and markets wireless communications products consisting of two-way land mobile radios, repeaters, base stations, and related components and subsystems. Two-way land mobile radios can be units that are hand-held (portable) or installed in vehicles (mobile). The Company's P-25 digital products and the Company's analog products function in the VHF (136 megahertz - 174 megahertz), UHF (380 megahertz - 470 megahertz, 450 megahertz - 520 megahertz) and 700-800 megahertz bands. The Company offers products under two brand names: BK Radio and RELM. BK Radio-branded products serve the government and public safety market and RELM-branded products serve the business and industrial market.

BK Radio-branded products consist of land-mobile radio equipment for professional radio users primarily in government and public safety applications. RELM's P-25 digital products are marketed under the BK Radio brand. RELM-branded products provide two-way communications for commercial and industrial concerns, such as hotels, construction firms, schools, and transportation services. The Company provides products to a range of customers, including emergency, public safety, homeland security and military customers of federal and state government agencies, as well as various commercial enterprises. The Company's two-way radio products are used in harsh and hazardous conditions.

The Company competes with Motorola Solutions, Inc.

Advisors' Opinion:

• [By Roberto Pedone]

  Relm Wireless (RWC) is engaged in the designing, manufacturing and marketing wireless communications products consisting of two-way land mobile radios, repeaters, base stations and related components and subsystems. This stock closed up 2.8% to $3.58 in Tuesday's trading session.

  Tuesday's Range: $3.40-$3.58
  
  52-Week Range: $1.42-$3.74
  
  Tuesday's Volume: 106,000
  
  Three-Month Average Volume: 74,659

  From a technical perspective, RWC trended higher here right above some near-term support levels at $3.20 to $3.10 with above-average volume. This stock has been uptrending for the last two months, with shares moving higher from its low of $2.62 to its intraday high of $3.58. During that move, shares of RWC have been making mostly higher lows and higher highs, which is bullish technical price action. That move is quickly pushing shares of RWC within range of triggering a major breakout trade. That trade will hit if RWC manages to take out its 52-week high at $3.74 with high volume.

  Traders should now look for long-biased trades in RWC as long as it's trending above some near-term support levels at $3.20 or its 50-day at $3.10 and then once it sustains a move or close above $3.74 with volume that hits near or above 74,659 shares. If that breakout hits soon, then RWC will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $4.50 to $5.

10 Best Defense Stocks To Invest In 2014: L-3 Communications Holdings Inc. (LLL)

L-3 Communications Holdings, Inc., through its subsidiary, L-3 Communications Corporation, provides command, control, communications, intelligence, surveillance, and reconnaissance (C3ISR) systems; aircraft modernization and maintenance; and government services in the United States and internationally. Its C3ISR segment offers fleet management sustainment and support, such as procurement, systems integration, sensor development, modifications, and periodic depot maintenance for signals intelligence and communications intelligence systems; strategic and tactical signals intelligence systems; secure data links; secure terminal and communication network equipment and encryption management; and communication systems. The company?s Government Services segment provides communication software support, information technology services, and various engineering development services and integration support; engineering and information systems support services; teaching and training; h uman intelligence support services; command and control systems and software services; and technical and management services. Its Aircraft Modernization and Maintenance segment offers modernization and refurbishments, upgrades and sustainment, maintenance, and logistics support services, as well as turnkey aviation life cycle management services for military and various government and commercial customers. The company?s Electronic Systems segment provides components, products, subsystems, systems, and related services across various business areas, including power and control systems, electro-optic/infrared, microwave, simulation and training, precision engagement, warrior systems, security and detection, propulsion systems, avionics and displays, telemetry and advanced technology, undersea warfare, and marine services. L-3 Communications Holdings, Inc. was founded in 1997 and is based in New York, New York.

Advisors' Opinion:

• [By Rich Smith]

  The U.S. Department of Defense awarded nine new contracts on Monday worth some $1.121 billion in aggregate. The largest of these awards, however, swallowed more than 85% of the funds on offer. Split among five publicly traded companies, and one privately owned, this monster IT contract envisions paying out $960 million over the course of time to contractors:

  Lockheed Martin (NYSE: LMT  ) Raytheon (NYSE: RTN  ) Harris� (NYSE: HRS  ) L-3 Communications (NYSE: LLL  ) TYBRIN Corp., a subsidiary of Jacobs Engineering Group (NYSE: JEC  ) SRA International

  The multiple award, indefinite- delivery/indefinite-quantity (IDIQ) contract was awarded under the U.S. Air Force's Network-Centric Solutions-2 (NETCENTS-2) Application Services program, which the Air Force describes as being one of its primary vehicles for purchasing "sustainment, migration, integration, training, help desk support, testing and operational support" services. Over the course of the contract, the six named contactors will be the only ones entitled to bid (against each other) for task orders awarded under the umbrella IDIQ contract.

• [By Rich Smith]

  Around the globe and Down Under it, L-3 Communications (NYSE: LLL  ) landed a pair of new contracts this week.

  On Thursday, the Australian Defence Force announced that it has signed two contracts with L-3's Oceania subsidiary, ordering up "off-the-shelf" satellite communications terminals.

10 Best Defense Stocks To Invest In 2014: Raytheon Company(RTN)

Raytheon Company, together with its subsidiaries, provides electronics, mission systems integration, and other capabilities in the areas of sensing, effects, and command, control, communications, and intelligence systems, as well as mission support services in the United States and internationally. It operates in six segments: Integrated Defense Systems, Intelligence and Information Systems, Missile Systems, Network Centric Systems, Space and Airborne Systems, and Technical Services. The Integrated Defense Systems segment provides integrated naval, air, and missile defense and civil security response solutions. The Intelligence and Information Systems segment offers intelligence, surveillance and reconnaissance, advanced cyber solutions, weather and environmental solutions, and information-based solutions for law enforcement and homeland security. The Missile Systems segment develops and produces weapon systems, including missiles, smart munitions, close-in weapon systems, projectiles, kinetic kill vehicles, and directed energy effectors for the armed forces of the U.S. and other allied nations. The Network Centric Systems segment provides net-centric mission solutions, including integrated communications systems, command and control systems, combat systems, and operations and precision components for the U.S. federal, state, and local government customers, as well as civil customers. The Space and Airborne Systems segment designs and develops integrated systems and solutions for missions, including intelligence, surveillance, and reconnaissance; precision engagement; unmanned aerial operations; and space. The Technical Services segment provides training, logistics, engineering, product support, and operational support services for the mission support, homeland security, space, civil aviation, counterproliferation, and counterterrorism markets. Raytheon Company was founded in 1922 and is based in Waltham, Massachusetts.

Advisors' Opinion:

• [By Alex Planes]

  The Apollo program, beyond providing an incredible boost to national confidence, also advanced the frontiers of technology in a number of worthwhile ways. Here's a list of some of the program's key innovations that have filtered down to our lives:

  The space suits used to explore the Moon led to advances in gas masks, new fabrics for blimps and other lighter-than-air aircraft, and a drug-production containment system currently in use by co-developer Eli Lilly (NYSE: LLY  ) . Suit technology was also adapted to improve athletic shoes in the 1990s and to develop roofing systems for major sports stadiums, including Houston's own Reliant Stadium. Filtration systems used to ensure supplies of safe drinking water on the Apollo missions have been adapted for kidney dialysis, Earth-bound water filtration, and the industrial HVAC (heating, ventilation, and air conditioning) industry. Other medical systems derived from or improved by Apollo technology include pacemakers, heart monitors, CAT scans, and MRIs. Neither solar panels nor semiconductors were invented for Apollo, but both technologies were pushed forward by the need for advanced power and control systems. Both technologies actually improved in tandem during the Apollo program's lifetime, as the cost of solar cells was largely tied to reductions in integrated-circuit transistor sizes through the 1960s. The Apollo Guidance Computer, or AGC, built by Raytheon (NYSE: RTN  ) for Moon-bound missions, was the first computer of its kind to use integrated circuits, which were designed by chip-making pioneer Fairchild Semiconductor.

  The AGC was also extremely advanced for its era, sporting a clock speed of roughly 1 megahertz and 2 kilobytes of memory. The PC, which launched in 1981, had a 4 MHz processor and 16 KB of memory, but the AGC made up for weaker hardware with the ability to multitask eight programs at the same time, whereas early PCs were limited to one program -- and even tod

10 Best Defense Stocks To Invest In 2014: Safran SA (SAFRY.PK)

Safran SA is a France-based high-technology company which produces aircraft and rocket engines and propulsion systems. It divides its work into three segments: Aerospace, Aircraft, Defense and Security. The Aerospace Propulsion division provides engines, turbines and parts for aircraft, and rocket boosters for civil, military and spatial markets through several subsidiaries, including Snecma, among others. The Aircraft Equipment division produces landing gear, wheels and carbon brakes, aircraft engine nacelles and airborne power electronics through its subsidiaries, including Aircelle, among others. The Defense division includes the subsidiary, Sagem, and makes systems and equipment for inertial navigation and other defense applications to be used on military transport and combat aircraft, helicopters, warships, armored vehicles and artillery systems. In October 2013, the Company completed the sale of its United States-based subsidiary, Global Motors Inc to Allied Motion Inc. Advisors' Opinion:

• [By Daniel Lauchheimer]

  Currently, three main companies supply security equipment to the TSA - Safran (SAFRY.PK), Smiths (SMGKF.PK), and Level-3 Holdings (LLL). All three of these companies sell the whole range of their products to the TSA, with an ETD offering included. Recently, however, a new company, Implant Sciences Corporation (IMSC.PK) received approval from the TSA to begin selling their ETD equipment to airport security professionals. This approval has opened the door for IMSC to begin taking some market share away from the more established players in the US and beyond.

10 Best Defense Stocks To Invest In 2014: Lockheed Martin Corporation(LMT)

Lockheed Martin Corporation engages in the research, design, development, manufacture, integration, operation, and sustainment of advanced technology systems and products in the areas of defense, space, intelligence, homeland security, and government information technology in the United States and internationally. It also provides management, engineering, technical, scientific, logistic, and information services. The company operates in four segments: Aeronautics, Electronic Systems, Information Systems & Global Services (IS&GS), and Space Systems. The Aeronautics segment offers military aircraft, including combat and air mobility aircraft, unmanned air vehicles, and related technologies. Its products and programs comprise the F-35 multi-role, stealth fighter; the F-22 air dominance and multi-mission stealth fighter; the F-16 multi-role fighter; the C-130J tactical transport aircraft; and the C-5M strategic airlifter modernization program; and support for the P-3 maritime patrol aircraft, and the U-2 high-altitude reconnaissance aircraft. The Electronic Systems segment provides air and missile defense; tactical missiles; weapon fire control systems; surface ship and submarine combat systems; anti-submarine and undersea warfare systems; land, sea-based, and airborne radars; surveillance and reconnaissance systems; simulation and training systems; and integrated logistics and sustainment services. The IS&GS segment offers information technology solutions and advanced technology primarily in the areas of software and systems integration for space, air, and ground systems to various defense and civil government agencies. The Space Systems segment provides government and commercial satellites; strategic and defensive missile systems, including missile defense technologies and systems, and fleet ballistic missiles; and space transportation systems. Lockheed Martin Corporation was founded in 1909 and is based in Bethesda, Maryland.

Advisors' Opinion:

• [By Rich Smith]

  Still, what this leaves us with here is a stock costing perhaps 12.5 times what it might earn this year -- a higher valuation than rivals L-3 Communications (NYSE: LLL  ) or Lockheed Martin (NYSE: LMT  ) fetch, even if a discount to General Dynamics. Meanwhile, Textron's free cash flow projection suggests that the quality of its earnings (perhaps $540 million in total, judging from the guidance) may not be even as good as those of its cheaper rivals.

• [By Rich Smith]

  South Korea's upgrade program got under way last summer, when the country chose Britain's BAE Systems (NASDAQOTH: BAESY  ) over Lockheed Martin (NYSE: LMT  ) to serve as prime integrator in the project -- a surprising development, given that Lockheed built the planes in the first place.

10 Best Defense Stocks To Invest In 2014: Embraer SA (EMBR3)

Embraer SA is a Brazil-based holding company primarily engaged in the manufacture of aircrafts. The Company�� business activities are divided into three business segments: Commercial Aviation; Defense and Security Business, and Executive Aviation. The Commercial Aviation segment is involved in the development, production and sale of commercial jets, as well as in the provision of support services, with emphasis on the regional aviation industry and aircraft leasing. The Defense and Security Business segment mainly includes the research, development, production and modification of defense aircrafts as well systems and software design. Through the Executive Aviation segment, the Company is active in the development, production and sale of business jets, provision of support services related to this sector of the market and aircraft leasing. The Company has subsidiaries, affiliated companies and representative offices in Brazil, the United States, France, Holland and China, among others. Advisors' Opinion:

• [By Ney Hayashi]

  The Ibovespa dropped for a third day as planemaker Embraer SA (EMBR3) led losses among exporters on speculation that a strengthening local currency will erode revenue from outside Brazil.