6 Stocks That Never Surrender

If you were invested in stocks lo these past 12 months, I suspect this week couldn't have been soon enough in coming for you. The last week of suffering. The end of 2009.

Sure, 2009 wasn't equally evil for all equities -- Goldman Sachs (NYSE: GS  ) , for example, made out like a bandit, and some folks would argue that Amazon.com (Nasdaq: AMZN  ) absolutely owned the year -- elsewhere across the S&P 500, investors are coming off the worst decade for stocks ... ever.

This will, of course, come as no surprise to defense investors:

Company

Starting Price*

Recent Price

Total Return

General Dynamics (NYSE: GD  )

$51.24

$68.34

33.4%

Raytheon (NYSE: RTN  )

$41.99

$52.25

24.4%

Lockheed Martin (NYSE: LMT  )

$77.07

$75.11

(2.6%)

AeroVironment

$29.96

$29.02

(3.1%)

iRobot

$11.49

$17.26

50.2%

Force Protection

$4.57

$5.53

21%

AVERAGE RETURN

 

 

20.6%

S&P Spyder

$87.28

$112.48

28.9%

DIFFERENCE

 

 

(8.3)

Source: Yahoo! Finance.
*Tracking began on July 10, 2009. Portfolio is equal-weighted, with "recent price" being set at market close on the Friday preceding publication, and adjusted for stock splits and dividends.

I'll have some more Foolish observations for you on the above numbers in a moment. But before we get to that, let's quickly run down a few highlights from the past week:

Afghanistan, ho!
First up, we've all heard about Oshkosh's (NYSE: OSK  ) difficulties with getting the ink to dry on its deal to build "Family of Medium Tactical Vehicles" (FMTV) trucks for the military. BAE and Navistar aren't happy at losing the contract. They're refusing to take the Pentagon's hint about not filing frivolous appeals -- and this month convinced the GAO to reconsider whether Oshkosh really can deliver the vehicles it promised at the price it bid.

In this regard, Oshkosh's announcement last week, that it's ahead of schedule on its other big military project -- M-ATV -- supports its contention that it can indeed: "build the FMTV and meet all of the Army's objectives while saving hundreds of millions of taxpayer dollars." Here's hoping.

And Mo-rocc-o!
Meanwhile, across the pond we saw Portfolio member demonstrate once again what it will be doing while waiting for the F-35 orders to roll in. Namely: Sell F-16s to all and sundry. Lockheed inked a deal with the Kingdom of Morocco last week, agreeing to provide the North African nation with 24 F-16s (with engines from United Technologies (NYSE: UTX  ) ) to help modernize the Royal Moroccan Air Force.

The biggest winner of the week, however, is clearly Raytheon. Not only does it have a hand in Lockheed's Moroccan deal (Raytheon's doing the E-Warfare on the F-16s). Not only did it continue working its bread-and-butter rockets business, contracting to sell our own Air Force $170 million worth of Maverick air-to-ground missiles. Raytheon also nailed down a $1.1 billion contract to equip Taiwan with Patriot air defense systems. That's nearly 5% of annual revenues, locked down in the form of a single contract. Nice.

(And it's only the start. Keep your eyes peeled for news of additional Patriot revenues inbound. Turkey wants to buy $7.8 billion worth of the gizmos, and word has it the Iraqi Defense Forces are on the hunt for some Patriots as well.)

Foolish takeaway
Truly, it's been a miserable year for us all ... except, as last week's news shows, it really hasn't. Let's not get so distracted by a few circa-2009 trees that we lose sight of the decade-old forest. For the last few months' underperformance notwithstanding, the last 10 years have treated our companies right nicely:

Company

Price on Dec. 28, 1999

Price Today

Total Return

General Dynamics

$21.41

$68.34

219%

Raytheon

$21.99

$52.25

138%

Lockheed Martin

$16.61

$75.11

352%

Force Protection

$13.87

$5.53

(60%)

AVERAGE RETURN

 

 

162%

S&P Spyder

$123.90

$112.48

(9%)

DIFFERENCE

 

 

151%

Well, most of them. (Force Protection was a volatile thinly traded stock a decade ago, while AV and iRobot weren't even around as publicly traded entities a decade ago.) But on average, I've got to say that the decade-that-was turned out pretty well for investors who stuck it out through thick and thin.

Maybe this new decade will be just as good. Maybe not. But as the numbers above demonstrate, it could be well worth your while to stick around and find out. Never surrender.

Fool contributor Rich Smith is between brokers and does not currently own any stocks. Amazon.com is a Motley Fool Stock Advisor pick. General Dynamics is a Motley Fool Inside Value selection. AeroVironment and iRobot are Motley Fool Rule Breakers selections. The Motley Fool has a disclosure policy.


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