Lockheed Martin.

Whoosh. The sound of an airplane makes you turn your gaze towards the red sun on the bright blue sky. Then you see it. In all of its glory, a mighty US plane called: F-35. But then you frown and think: what company made it, as you are the investor who knows what he invests in. Curious, you sit down at that old laptop you were meant to throw out 1 year ago. You search up F-35 company name. The result that pops up is Lockheed Martin, or LMT for short, a defense company, that you can buy right now. But is it a good investment? Sit tight, strap in your seatbelts, put on the helmet, and turn the autopilot on. It’s going to be a wild ride! :)

Stock Information

The F-35 screeched towards the mountainside, its pilot unconscious from a high-G maneuver. The ground rushed up, the cockpit a blur of trees and rocks. Then, a jolt – the Auto GCAS system kicked in. The jet shuddered, its nose abruptly veering upwards, pulling out of the deadly dive. The pilot, regaining consciousness, found himself staring at a patch of blue sky, the mountain now a distant memory.

That’s Auto GCAS: Collision Avoidance System, made exclusively by LMT, who isn’t just a provider of planes, oh no, my dear firenbds! They invest in tech. They own a division of space rockets, communications systems for pilots, Maritime Systems, interconnectivity between command control system, helicopters, and many more things I won’t dive into here. All I can tell you is: If it’s military, it’s almost certain to be LMT.

Here is a list of their product for you to explore: https://www.lockheedmartin.com/en-us/products.html

Ok, let’s get into the stock metrics guys!!

The market share chart above has been made using my custom tool I programmed. SOmetimes, it gets th wrong companies such as BA (Boeing), but if we take it away, we still see a leader in terms of defense technology.

Moving on to their financial efficiency metrics chart, (also made using my tool), so how much money are they earning per $100 invested, and we can see that they’re making:

We can see that every $100, they make $117. looking at similar companies, we can see thatNOC, HON and CW are also great considerations! :)

Now let’s move on to the profit margins, so how much is the company able to flex its pricing power:

We see that they have a gross margin of just 9.88%, which is rather low, I don’t like that. Their net profit margin is at 7.51%, but could be better in my opinion, upwards of 10% is a good thing.

They’re like a hare in the turtle vs hare race, except here, they are competing againwst SpaceX, Blue Origin, capital heavy and a financial posistion, that is:

Financial health

This is one of the most important parts of the analysis. Imagine you’re at a party of your friend, and here comes a birthday cake! Many children are shouting, screaming, and overall, excited to be here, right? But you, as a 10-year old investor, are drifting away thinking how it’s similar to assets and liabilities:

If we assume that the cake is visible, only if the company has a net equity position, you can see why I’m happy right now, but less happy about the fact, that they have more debt than cash:

Their debt to EBITDA (or how fast they are going to pay off all of their debt) is at 2.47.

But are they going to ever pay it off? That is the question…

Revenue growth

Based on all of this data in terms of revenue, I have to disappoint you, but LMT is not in any way predictable. ☹️

We can see that its revenues have been flat over the past few years, so sorry for that guys, but just because a company is great, it doesn’t mean it’s a great investment.

Stock valuation

I notice many people go crazy when there are deals at their local grocery store. Meanwhile the so-called investors: *sell off a stock* Herd thinking: “SELL!”, me: buy….

Here is a FCFF valuation tool that I made using my programming skills:

We can see it’s pretty undervalued.

Conclusion

What do you think about LMT?

Answer in the comments or reply to this email, and THEN scroll down. 🏦

I’ll wait here patiently…

Have you commented?

Are you sure?

If so, scroll down:

While LMT’s dominance can’t be argued, their low profitablity, in connection with their slowing or flat revenue growth, is anything but a complelling investment opportunity. For me, this stock is a sell or a hold.

A financial health timeline is what I’m working on right now (💎 Only premium members will have access to it in the future):

If LMT proceeded 100% of their FCF to debt repayments, they would be debt-free by…

Bye guys! :)

This isn’t financial advice.

Consider upgrading to a premium subsciptuion, for portfolio updates, and access to my weekly sessions on investing. It just works.