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No. of Recommendations: 2
The stupidity of this market continually outdoes itself. This can be seen in the price pullback in RTN. It's very hard to be a patient investor when you see the overvalued bubbles go continually higher, like shares of AMZN, while companies that are truly undervalued and have outstanding fundamentals are tossed aside for the time by the morons who lead this market, specifically dim-witted analysts and fund managers.

Back in early March I posted a pro-defense sector post @ the AOL board because of the low traffic here. That thread titled Growth Story can be found @
http://boards.fool.com/Message.asp?mid=18685918

There I pointed out the analysts position on RTN which was:

"Here are the Current Broker Recommendations on Raytheon Corp(RTN)

Covering Brokers 15
Strong Buy 2
Buy 3
Hold 9
Sell 1"


That I found to be quite a positive contrarion indicator and not the main reason for a comittment, but certainly a some reassurance and validation of the fact that this stock is cheap.

I should point out that since the time of that post there has been an upgrade and another firm initiated coverage.

3/25 *DJ SoundView Starts Raytheon At Outperform >RTN

4/3/03 *DJ SG Cowen Ups Raytheon To Outperform From Market Perform

That should continue going forward and I would wait until there is a consensus of buys or strong buys before taking profits. That would be a good exit strategy. Right now the defense sector is selling at a multiple to earnings of almost HALF of the S&P 500 despite the fact that the 5 year projected growth rate for the industry is actually higher than that of the S&P 500. Although, I believe that the projected growth rates of the analysts are far too modest because they, most analysts and institutional fund managers, severely lack the acuman that is necessary to successfully deduce. They have their high paying jobs because of the Ivy League degrees they hold - which may be very useful if you're a bean counter, but the successful investor needs to be a better visionary than bean counter and have some degree of sense if he/she wants to outperform or even match the market.

At the aforementioned link to my post "Growth Story" I expatiated on the various reasons why I am so high on the defense sector and I to no surprise recommend reading it.

http://boards.fool.com/Message.asp?mid=18685918


The rest of this post is just to reinforce what I've already predicted. If you're still with me, I would rec picking up at the previous link and then finishing up by gliding through the following headlines, which I got off the newswire. I know some of these press releases may have already been posted, but I'm posting some of the highlights here. All bold was added by me.

By Anne Marie Squeo
The U.S. Navy has launched at least two-thirds of the Tomahawk cruise missiles it has in the Middle East during the first two weeks of the war in Iraq, requiring it to rush some of its remaining stock of the missiles to the region. The rapid depletion of its arsenal comes at an awkward time because the Tomahawk's maker, Raytheon Co., stopped production in 1999 after the Navy ordered a new version that won't be ready until mid-2004.
Navy officials say they have fired more than 700 of the 1,100 Tomahawks they had in the Middle East from destroyers, submarines and other ships in the Persian Gulf and the Mediterranean Sea during the current conflict. Several vessels, including the USS Providence, an attack submarine, have received additional Tomahawks in recent days, service officials said.
The Navy had a total of 2,000 Tomahawks in its global stocks when the war started. But in the early days of the Iraqi conflict, the missiles were used extensively against targets in and around Baghdad where heavy antiaircraft fire limited fighter jets' ability to safely conduct bombing raids. The service since has cut back on their use, firing between 15 and 30 a day, a Navy spokesman said. The 18-foot missiles can fly 1,000 miles and use a variety of targeting systems to find their mark.
Navy and Pentagon officials play down the potential problem. "We took steps to have a high number, more than 1,000, in theater when the war began and we have since replenished several ships," said Navy spokesman Stephen Pietropaoli. "In short, the operational command is confident it has what it needs."
The Tomahawk made its debut during the 1991 Persian Gulf War, and Raytheon later upgraded it to include satellite navigation capabilities. But the company stopped making Tomahawks when the Navy decided to focus on a cheaper version. Restarting production lines now to replenish Tomahawk stocks would push their
price up to $1.4 million apiece -- compared with $1 million in 1999, when they last were used in great numbers during the Kosovo conflict.
Raytheon, of Lexington, Mass., is in talks with the Navy to speed production of the next-generation Tactical Tomahawk, which are expected to cost $546,000 apiece. But there is no way any can be ready for the current conflict.
Some replacements are coming in, however, to buttress what the Navy has on hand. Raytheon is in the process of converting 476 older Tomahawks into the current version that uses Global Positioning System satellites to find targets. The first deliveries of those began in November, with the final upgrades expected to be completed by mid-2004.
(END) Dow Jones Newswires
04-02-03 2135ET- - 09 35 PM EST 04-02-03



government spending for defense and homeland security is set to increase by about $98 billion this year over last. Spending on new military equipment has risen to about $120 billion, up 66% from what it was in 1997, and the Pentagon is planning to continue the steep rise in coming years.

government spending will account for almost a quarter of anticipated GDP growth of 2.4% this year, said Mark Zandi, chief economist of consulting firm Economy.com. With the exception of housing, spending on defense and homeland security "has been the most important source of growth in the economy over the past year," he said.

TUCSON, Ariz., April 14 /PRNewswire/ Raytheon Company (NYSE: RTN) has been awarded a $95.8 million firm-fixed price contract modification for continued production of the AIM-120 Advanced Medium Range Air-to-Air Missile (AMRAAM).

This 2003 award is part of a six-year (2002 base year plus five annual priced options) procurement plan that has a potential value of nearly $2 billion
.


Raytheon LRAS3 Contract Modification Increases its Value to $172 Million MCKINNEY, Texas, April 14 /PRNewswire/ -- Raytheon Company's (NYSE: RTN) Long Range Advanced Scout Surveillance System (LRAS3) contract has been modified by the U.S. Army to extend production through January 2008 and to increase its value to $172 million.
LRAS3 is a long-range sensor system that gives Army reconnaissance troops the ability to detect, recognize and identify distant targets -- in real time
.

ATHENS (AP)--Greece signed a $242 million deal with U.S.-based Raytheon (RTN)to equip its F-16 jet fighter fleet with electronic defense systems, the defense ministry said Thursday.
The deal, signed in Athens Wednesday, calls for 60 complete ASPIS II self-defense systems for Greece's F-16 Block 52+; 29 radar jamming systems for its F-16 Block 30/50 and an upgrade of 32 jammers for F-16 Block 30/50 jets.
According to the agreement, delivery of the systems will start in 18 months and will be completed no later than 2006
.


Raytheon Awarded $30.3 Million for Multi-Mode Radar Systems; U.S. Special Operations Command Helicopters will Receive Color Weather Mode Technology MCKINNEY, Texas, April 9 /PRNewswire/ -- Raytheon Company (NYSE: RTN) was recently awarded a $30.3 million contract by the U.S. Special Operations Command for the production of 30 APQ-174B Multi-Mode Radar (MMR) systems with Color Weather Mode (CWM) and 48 CWM radar upgrade kits for existing APQ-174B MMR systems.


TEWKSBURY, Mass., April 7 /PRNewswire/ -- The U.S. Missile Defense Agency has awarded Raytheon Company (NYSE: RTN) a $350 million sole source contract to engineer, construct, integrate and test a forward deployable Ballistic Missile Defense System (BMDS) radar. This award results from President Bush's direction to begin fielding initial missile defense capabilities in 2004-2005. The BMDS radar will be a transportable, X-band, phased array radar with sufficient sensitivity to detect, track and discriminate threat missiles.

Raytheon, U. S. Navy Sign $45.5 Million Phalanx 1B Order
LOUISVILLE, Ky., April 3 /PRNewswire/ -- Raytheon Company (NYSE: RTN) is being awarded a $45.5 million contract to overhaul and upgrade 12 Phalanx Close-In Weapon Systems to the Block 1B configuration for the United States Navy. All work is to be performed in Louisville, Ky., and is expected to be complete by October 2005.


TEWKSBURY, Mass., April 3 /PRNewswire/ -- The U.S. Navy has awarded Raytheon Company (NYSE: RTN) a $25.1 million sole source contract for 24 MK54 lightweight torpedoes. This award reinforces Raytheon's position with the U.S. Navy as the premier supplier of its lightweight and heavyweight torpedoes and demonstrates a renewed U.S. Navy commitment to maintain an U.S. industrial base for torpedoes.





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