Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Psst! Buddy! Wanna Buy an F-16?

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

For nearly a decade, and nearly two-thirds of a trillion dollars, the U.S. taxpayer has been floating the Iraqi government and paying its defense bills.

Well, no more. We learned last month that Iraq intends to purchase 36 of Lockheed Martin's (NYSE: LMT  ) F-16 fighter jets to start rebuilding its own air force. Over the weekend, the news broke of yet another purchase -- half a dozen Beechcraft King Air "spy planes," manufactured by the artist formerly known as Raytheon (NYSE: RTN  ) Aircraft Company. ("Formerly" because, as you may recall, Raytheon sold it to private-equity powerhouses Goldman Sachs (NYSE: GS  ) and Onex.

And yes, Iraq will be doing this on its own dime. We don't know how many dimes are involved, but we do know that when news surfaced of the Iraqi government's interest in buying the RAC's King Air planes, the rumored price was some $132 million. Lockheed's warbirds will cost quite a bit more; the potential value of the first contract could be worth several billion dollars.

What it means to you
What do these deals mean to investors? Well, that depends on what you're investing in:

  • If you own Lockheed stock, Iraq's addition to the string of recent F-16 purchasers on its own means more revenue for your company while you wait for F-35 production to ramp up.
  • If you own other defense contractors, Iraq's ability to buy military hardware on its own suggests that we could see further purchases. The Iraqi military's Air Force is starting to look capable of holding its own, but I'll bet they could still use a few Boeing (NYSE: BA  ) -built Apaches and Blackhawk helicopters from United Technologies (NYSE: UTX  ) . And are Cobras and Ospreys from Textron (NYSE: TXT  ) on sale? Throw those in the cart as well.
  • Meanwhile, if you're betting on a long war in Iraq continuing to support sales to the U.S. military, it's time to start revising your expectations. The more capable Iraq becomes of doing things on its own, the less need it has for U.S. support in-country.

In all, these aren't such bad things -- neither for U.S. taxpayers, nor, as the recent sales above show, for defense-industry investors.

Make the Fool your source for news and views on defense investing:

Fool contributor Rich Smith owns shares of Boeing. The Motley Fool has a disclosure policy.

Read/Post Comments (2) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 743065, ~/Articles/ArticleHandler.aspx, 10/21/2016 10:49:14 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,076.58 -85.77 -0.47%
S&P 500 2,135.72 -5.62 -0.26%
NASD 5,245.26 3.43 0.07%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/21/2016 10:33 AM
LMT $230.58 Down -1.25 -0.54%
Lockheed Martin CAPS Rating: ****
RTN $137.41 Up +0.10 +0.07%
Raytheon CAPS Rating: ****
BA $135.22 Down -0.62 -0.46%
Boeing CAPS Rating: ****
GS $174.01 Down -0.50 -0.29%
Goldman Sachs CAPS Rating: ***
TXT $38.73 Down -0.76 -1.92%
Textron CAPS Rating: ****
UTX $97.92 Down -1.37 -1.38%
United Technologie… CAPS Rating: ****