Thursday, January 22, 2015

2015 Defense Stocks Interview with Scott Sacknoff, President, SPADE Defense Index (NYSE: ^DXS)

2015 Defense Stocks Interview with Scott Sacknoff, President, SPADE Defense Index (NYSE: ^DXS)

Point Roberts WA, NEW YORK, NY – January 22, 2015 – ( newswire and -, a global news source covering leading sectors including defense and security, issues a 2015 interview with Scott Sacknoff, President of Spade Defense Index (NYSE: ^DXS).

Scott Sacknoff manages the SPADE Defense Index (NYSE: ^DXS) which serves as the underlying index for PowerShares Aerospace & Defense ETF (NYSE: PPA).

Interview Q&A
HDS: Hi, this is Dawn Van Zant with  We are once again joined by Scott Sacknoff, President of the SPADE Defense Index, a benchmark for investors interested in defense and homeland security.  He will look back with us on how investors performed in 2014, as well as give us a look ahead to what we can expect in 2015.  Mr. Sacknoff, thank you for joining us.

SMS: My pleasure Dawn.

HDS: Let’s start with 2014. How did the sector perform?

SMS: Well instead of an eagle, perhaps the symbol for aerospace and defense stocks should be the Energizer Bunny…as it keeps going and going. Even the most optimistic of analysts didn’t foresee defense stocks gaining more than 48% in 2013, and after a 4th quarter surge in 2014, the sector’s benchmark ended 2014 with new historic highs, gaining 11.8% for the year, roughly 40 basis points ahead of the S&P500.

HDS:  Can you tell us what drove this performance?

SMS:  There were obviously a number of global incidents around the world, most notably the conflict between Russia and the Ukraine and the rise of ISIS in the Middle East and the threat that they represent.  One could easily look around the world - whether it was Boko Harem in Nigeria, civil wars in Syria and Libya, or potential threats in Iran, North Korea, the Arctic, and the seas around China - and see conflict.  Overall, large caps dominated again, a surprise after leading the sector for the past several years but mirroring a trend where the broader market sought safety in large cap companies.  The returns from four of the five defense primes all significantly outperformed the market [General Dynamics +44%, Lockheed +30%, Northrop Grumman +29%, Raytheon +19%] with only Boeing being the laggard [It was down 5% after an 84% gain in 2013].

HDS:  Were there any other noticeable trends?

SMS:  The two big trends cited over the past several years continue, namely (1) gains in commercial aerospace, which is in the middle of a multi-year expansion, and (2) rising international defense sales that would offset cuts to the U.S. budget. 

HDS: Skipping ahead to 2015, can you tell us which companies or activities might perform well?

SMS: Aerospace, defense, and security stocks should continue to be a stable place for investors as the sector tends to have a lower correlation with the economic, currency and political concerns economists expect in 2015.  Companies involved with defense-related IT and homeland security activities such as cyber and big data should gain.  And after several years of large caps dominating returns, the possibility that the cycle will shift to the small and mid-caps, as it did in the early 2000s, is gaining traction.

HDS: Lastly, in 2015, what are some key events that investors should pay attention to?

SMS: The Paris Air Show in June should present a number of interesting opportunities.  The show is generally a showcase of international deals related to military and commercial aircraft, rotorcraft, UAVs and space systems, and announcements totaling $50-$100+ billion is typical. This will likely generate some headlines for several weeks in June.  Additionally, there are some in the new Republican controlled Congress that are seeking to end sequestration and stabilize the defense budget through the end of the decade. The possibility is obviously a positive.  Lastly, general economic conditions need to be monitored.  Although the sector is less correlated with the global economy than other sectors, risk remains and short-term moves are not unexpected.  Long-term, the sector has proven to offer investors with returns that exceed the S&P500. 

HDS: With a long track record of results, are investors returning to the sector?

SMS: Many defense stocks are at or near historic highs. The Powershares Aerospace & Defense ETF (NYSE: PPA) hit its historic high on 26 December 2014.  And over the past 18-24 months, the assets managed by ETFs have tripled from its lows when some thought major defense cuts were inevitable. Still in terms of shares outstanding, the funds are well below their peak, implying investors have returned but there is still significant room for growth.  As it becomes more difficult for investors to pick and choose the winners in the sector and rotate among them, the ETFs tend to become more attractive and in turn attract more investors.

HDS: Scott, thank you for taking some time with us today. newswire is a global recognized news source. We publish original content, third party investment commentary, contributor articles, company news and press releases in leading sectors.
Sectors we cover in include mining, energy, renewable energy, water stocks, food and beverage (including organic and LOHAS, wine), defense and security, biotech, technology and mobile. We have also recently expanded our global coverage to include Latin American stocks, sports and entertainment.

Follow on Twitter!/Investorideas
Follow on Facebook

Sign up for free news alerts at

Become an Member and access our online stock directories listing thousands of publicly traded stocks in leading sectors 

Spade Defense Index Disclaimer:  The information presented here is for information purposes only and should not represent a solicitation or an offer to purchase an investment product.

Disclaimer/ Disclosure: The newswire is a third party publisher of news and research as well as creates original content as a news source. Original content created by investorideas is protected by copyright laws other than syndication rights. Investorideas is a news source on Google news  and syndication partners. Our site does not make recommendations for purchases or sale of stocks or products. Nothing on our sites should be construed as an offer or solicitation to buy or sell products or securities. All investment involves risk and possible loss of investment. This site is currently compensated by featured companies, news submissions, content marketing and online advertising. Contact each company directly for press release questions. Disclosure is posted on each release if required but otherwise the news was not compensated for and is published for the sole interest of our readers. More disclaimer info:
BC Residents and Investor Disclaimer : Effective September 15 2008 - all BC investors should review all OTC and Pink sheet listed companies for adherence in new disclosure filings and filing appropriate documents with Sedar. Read for more info: Global investors must adhere to regulations of each country.

800 665 0411

No comments:

Post a Comment