PRZOOM - /newswire/ -
Point Roberts, WA, United States, 2007/05/11 - Scott Sacknoff, Manager of SPADE Defense Index (AMEX: DXS) discusses leading gainers: Armor Holdings, Force Protection and Security and Biometrics firms Cogent, L-1 Identity Solutions, and OSI Systems.
HomelandDefenseStocks.com, a global investor and industry portal for the homeland defense and security sector, presents the SPADE Defense Index Investor Podcast. This month’s interview with Scott Sacknoff, manager of the SPADE® Defense Index (AMEX: DXS), discusses the performance of homeland defense and security stocks in light of current events in Iraq and the funding battle between President Bush and Congress.
Homeland Defense stocks have performed better than the broad market explains Sacknoff. “As you may remember, we finished 2006 up more than 19%, having beat the S&P 500 for the seventh consecutive year. Through the end of April, the SPADE Defense Index was up 8.88% closing out an all-time high. The run has continued in the early days of May with the index rising another 2%, bringing the gain in the index up to 11.2%. This compares to a gain in the S&P500 of 6.15%. What this means is that year-to-date, the defense and security sector has outperformed the broader markets by more than 500 basis points.”
Many of the top gainers included in the Spade Defense Index are in the 2.5 billion to 7 billion dollar range, with Iraq being a key factor in the success of many firms involved in supplying the military. “As would be expected, firms involved with the armored vehicles used in Iraq, such as Armor Holdings and Force Protection, have done well with the firms up 30% and 24% respectively. Defense IT firms such as CACI, SI International, Mantech, and MTC Technologies continue to lag the index as the Pentagon shifts monies from R&D and investment programs to fund the war in Iraq. The Big 5 defense prime systems contractors are all up in the 4-7% range.”
“Precision Castparts, which has expanded to feed demand from commercial aircraft manufactures such as Boeing is up 33% for the year. The rest of the leading gainers include security and biometrics firms, Cogent, L-1 Identity Solutions, and OSI Systems, as well as two mid-cap companies, Goodrich, and FLIR Systems,” adds Sacknoff.
Moving forward Iraq will continue to be the main point of discussion within the homeland security sector and the battle over the budget will also remain a key debate as the President seeks additional funding for the war and Congress pressures for an exit date.
According to Mr. Sacknoff, “One option, which appears the most likely outcome, is that the Democrats in Congress will approve a smaller amount of funding without a deadline and force the President to continue to make pitches to Congress for additional funds. This way the debate continues to stay at the forefront, Congress can show that it is supporting the troops while working on a means to get the troops home. In the end, what the pundits feel may happen is that should the President’s popularity continue to weaken, Republican members of Congress may break from the President as their re-election approaches.”
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