Best stock for a nuclear North Korea
Today's Financial News - Posted April 6, 2009
It was yet another busy weekend. With Obama pumping up our allies in Europe, North Korea was acting like a disgruntled stepchild, doing all it could to get the attention of the world. It’s actions could have a positive outcome for Orbital Science (NYSE:ORB) investors.
By Andrew Snyder, TodaysFinancialNews.com
Baltimore – (TFN): Just like that the threat of a nuclear showdown erupts to the forefront of American minds. First the economy, than an out-of-control government, and now talks about nuclear threats to the homeland are weighing on the nation’s sentiment.
What’s next, demise of the American dollar? Oh, wait…
Unless you spent the weekend in a cave (or a fallout shelter), you had to have heard the news North Korea launched a pretty darn big rocket. Of course, its leaders claim the goal was to shoot a satellite into space, but the rest of the world has a different view. Almost everybody believes there were nuclear ambitions behind the firing.
Even if this was a failed attempt to shoot an orbiting chunk of metal into space, it succeeded greatly in getting the attention of the world. No longer can Obama talk solely of saving the economy and embarking on a path towards national healthcare. Now he’s got a message of nukes and global military threats scrolling across his teleprompter.
It is just one more topic for the already understaffed, overpaid and overzealous Obama administration to campaign on during the next four years.
Striking back
While Alaska or Hawaii will not see any mushroom clouds anytime soon, the weekend’s news will have an impact on Wall Street. Remember, investors do not like uncertainty. Just as we were getting some long-needed answers about the financial sector and their assets, questions erupt over national security and our strategic choices.
There is no doubt today’s downturn in the major indices is due to investors adding a risk premium to their valuation equations.
One stock that is not getting the attention it deserves today is Orbital Sciences (NYSE:ORB), the Virginia-based rocket manufacturer that is a top choice to send a wide array of military and commercial “stuff” into low orbit.
Granted, Obama’s defense budget is likely to look more like a fifth-grader’s weekly allowance over the next four years, but as global threats arise, we will be forced to find solutions. Companies like Orbital Sciences may offer those solutions.
As long as nuclear weapons and long-range rockets are making headlines, investors will be looking at companies like this one. As my colleague Laura Cadden has preached over the last few months, “Now is the time to enter defensive, defensive plays.”
She means companies like Orbital Science.
We will learn about many more international and domestic spying and satellite projects over the next year. Any company with exposure to the industry will be in the spotlight. Now is the time to look at these companies to see if they have a spot in your properly diversified portfolio.
Next Article: Won’t somebody please light a match
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