The Options Advantage
105 W. Monument Street
Baltimore, MD 21201
Monday, March 15, 2004
URGENT EMAIL – #158
** “Defensive Opportunities”… To Smoke the Market
A few weeks ago we made quick short-term gains on Lockheed
Martin (NYSE-LMT). It’s time to try and do it again.
Lockheed is down from its recent $50-plus level on a weak
defense sector.
Yet defense is a sector that is fundamentally stronger than
ever. Lockheed’s numbers should come in strong fashion this
year and next as defense spending shows no sign of letting
up.
Previously, we looked at Lockheed as a pure play on
Republicans keeping office for another four years. That is
not a certainty today.
However, judging by the most recent upsurge in terrorist
activity in Europe, continued deployment of force in the
Middle East, unrest in places like Haiti and the potential
for more problems in Iran, chances are quite good that the
next administration, whether Republican or Democrat, will
not cut defense spending.
Lockheed has room to run. A solid earnings performance, a
nice dividend (for those who own the shares), and
potentially high capital gains potential from continued
unrest all lead me top believe that LMT is a stock ready
for better performance.
Buy the Lockheed January 2006 $50 call options. The symbol
for this option is WLA AJ. It is currently trading at $3.40
on several exchanges. Do not pay more than $3.60. Set an
initial mental stop loss of $1.75.
Regards,
Karim Rahemtulla
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