Best Japan Stocks For 2013, Best Japan Stocks To Buy For 2013: May 2014

Saturday, May 31, 2014

Sprint and T-Mobile Merger Moves One Step Up

Sprint (S) and T-Mobile (TMUS) saw their stocks surge after some reports on Thursday surfaced regarding the possibility of the duo's merger. The Kansas carrier's stock moved up 2.6%, while T-Mobile stock price lifted 1.3% after the news spread. According to a news reported in Japan, Sprint's parent company Softbank entered into a limited agreement with German-based Deutsche Telekom, T-Mobile's parent company.

What Does that Signify?

Anonymous sources said that Deutsche Telekom has given its consent for the buyout proposition. Other unidentified sources said that the company has not come to any decision, the deal price and other details regarding the source of financing the transaction hasn't been ascertained yet. However, some believe that there is no update on the combination proposal as such. The news is more of a tactic to keep the merger talks alive for the regulators who have not really given any positive sign of approval. When individual companies were inquired on this matter, each preferred remaining quite.

Bloomberg cited a Kyodo report that said T-Mobile's parent readily accepted Softbank's and Sprint's proposal for acquisition. The report also went on further saying that the companies have come up to a point wherein they would further work on the deal to solidify the agreement and "work out how to proceed with the acquisition." On a similar note Seeking Alpha cited Kyodo news agency as the source and said that Deutsche Telekom has already signed a deal with the Overland Park-based telecom player.

Keen on Combination

Masayoshi Son, Sprint's and Softbank's top boss has been very candid about sharing his view on Sprint and T-Mobile combination. He believes that the two together would be extremely beneficial for both for the newly emerged combined entity, as well as the customers at large. The third and the fourth largest carriers cannot fight the bigger players Verizon and AT&T on an individual basis. But together the two undoubtedly makes a formidable combination.

However, the U.S. regulators seem more than satisfied with the current number of national carriers. T-Mobile has been picking up as it's aggressively building strategies and undertaking effective marketing campaigns to emerge as a stronger carrier. Also with the current gain in subscriber base, the telecom provider's position looks better.

The Federal Communications Commission (FCC) and the Department of Justice (DoJ) do not want the number of players in the telecom sector to shrink below four – Verizon, AT&T, Sprint, and T-Mobile. To this Sprint's Son argues that the industry already has four players – Verizon that purchased Vodafone's stake in it, AT&T which plans to acquire DirecTV (DTV), and Comcast (CMCSA); Sprint would be the fourth one. But these antitrust issues have been a challenge for Sprint.

What adds to the misery is the fact that AT&T has made an acquisition proposal to pay-TV provider DirecTV. And rumors have it that Comcast could counterbid for T-Mobile. If this really happens, Sprint might have to face another roadblock for which it might have to raise its transaction price.

Departing Thoughts

The official bidding for T-Mobile is yet to take place, but Sprint has laid the base work. Whether the deal would materialize strongly depends on the regulators that look rigid at the moment. History does not give a very pleasant outcome of a similar deal proposal when AT&T wanted to buy T-Mobile. But, if things work in favor of Sprint and the regulators agree to the idea of their combination, the U.S. wireless industry could see a sea of changes, and hopefully for the better.

About the author:Quick PenA seasonal writer with a Management Degree in Finance and interests in automotive, technology, telecommunication and aerospace sectors.

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It's Time for Nuance's Paul Ricci to Go: Opinion

NEW YORK (TheStreet) -- Nuance (NUAN) is not a commonly followed stock compared to the titans of tech. Yet, at a $6 billion market cap, it's hardly a micro-cap.

Most people who know the company know that it's the leader in voice control systems that power such apps as Apple's (AAPL).

It's a textbook industry roll-up.

When I once worked in the voice industry -- which brought us Flipboard founder and former Twitter director Mike McCue as well as new Xiaomi executive Hugo Barra -- the two big titans of voice apps were Nuance and SpeechWorks. Both had splashy dot-com era IPOs and then struggled to keep revenue growing through the desert years of 2001 to 2003. Suddenly -- and seemingly out of nowhere -- both of these companies and scores of smaller private ones were bought up by a company no one in the industry had ever really heard of: ScanSoft. ScanSoft was led by a guy no one had ever heard of: Paul Ricci. Ricci's first big acquisition was buying the Lernout & Hauspie assets out of bankruptcy in 2001. Two years later, he bought SpeechWorks, which was also in the Boston area. Two years after that, he "merged" with Nuance and -- smartly -- took its name. Ricci, now 57, is known for being tough as nails and a guy with no real strategy except just buy revenue and cut out costs. If you're looking for a coherent corporate strategy, keep looking. As a result, Nuance is now a multi-headed corporate beast with a health care transcription business, an enterprise one and a mobile business sold to carriers, Samsung and Apple. It shouldn't be. It should be broken up into three separate businesses so investors can place their own value on each business. But Ricci won't split the baby -- and that's why someone else must. It's time for Ricci to go. He paid himself $37 million last year, even though Nuance shares have declined 23% in value in the last 12 months.

This year, while the Nasdaq is up 26%, Nuance shares have dropped more than 13%.

There have been repeated missteps in terms of Nuance execution leading to several disappointing earnings calls.

All the while, while Siri and other services have been increasing in popularity, Ricci has yet to really articulate a strategy for Nuance.

Enough is enough. Paul Ricci, you've had your chance to do your strategy of rolling up the industry. There are now no more companies to buy. You've had your chance to overpay yourself. Now it's time for you to go. It's time for Carl Icahn to step up to the plate and press his case for why he should be on the Nuance board and why Ricci should step down. With Icahn allowed to bring in his own choice for the next CEO, Nuance shareholders would have their best chance to see a meaningfully increase in the value of their shares in a year where the rest of the Nasdaq stocks are running away with giddiness. The market has clearly spoken with its verdict on Paul Ricci's capabilities as leader of Nuance. It hads said it's time for him to move on to the next chapter of his life. At the time of publication the author was long NUAN and AAPL. Follow @ericjackson This article was written by an independent contributor, separate from TheStreet's regular news coverage.

Eric Jackson is founder and Managing Member of Ironfire Capital and the general partner and investment manager of Ironfire Capital US Fund LP and Ironfire Capital International Fund, Ltd. In January 2007, Jackson started the world's first Internet-based campaign to increase shareholder value at Yahoo!, leading to a change in CEOs in 2007. He also spoke out in favor of Yahoo!'s accepting Microsoft's buyout offer in 2008. Global Proxy Watch named Jackson as one of its 10 "Stars" who positively influenced international corporate governance and shareowner value in 2007. Prior to founding Ironfire Capital, Jackson was President and CEO of Jackson Leadership Systems, Inc., a leadership, strategy, and governance consulting firm. He completed his Ph.D. in the Management Department at the Columbia University Graduate School of Business in New York, with a specialization in Strategic Management and Corporate Governance, and holds a B.A. from McGill University. He was previously Vice President of Strategy and Business Development at VoiceGenie Technologies, a software firm now owned by Alcatel-Lucent. In 2004, Jackson founded the Young Patrons' Circle at the Royal Ontario Museum in Toronto, which is now the second-largest social and philanthropic group of its kind in North America, raising $500,000 annually for the museum. You can follow Jackson on Twitter at www.twitter.com/ericjackson or @ericjackson. You can contact Eric by emailing him at Dr.eric.jackson@me.com.

Friday, May 30, 2014

Report: FBI, SEC probe Icahn, Mickelson and…

Federal investigators have launched what the Wall Street Journal is calling "a major insider-trading probe involving finance, gambling and sports" that involves the trading of activist investor Carl Icahn, pro golfer Phil Mickelson and Las Vegas bettor William "Billy" Walters.

According to a story published on the Journal website late Friday, the Federal Bureau of Investigation and the Securities and Exchange Commission are probing whether Mickelson and Walters illegally traded on nonpublic information they allegedly obtained from Icahn about his investments in public companies. The Journal story attributed the information to "people briefed on the probe."

The feds are said to be investigating whether the past three years Icahn illegally provided Walters — well known in Vegas for his sports-betting abilities — about potentially market-moving investments by Icahn's company, Icahn Enterprises, the Journal story said.

Icahn, Mickelson and Walters are quoted in the article as denying any knowledge of a probe or declining comment.

"We do not know of any investigation," Mr. Icahn told the Journal Friday. "We are always very careful to observe all legal requirements in all of our activities." The suggestion that he was involved in improper trading, he said, was "inflammatory and speculative."

Mickelson is in Dublin, Ohio, playing The Memorial presented by Nationwide Insurance. He shot 70 on Friday to make the cut and is scheduled to tee off Saturday at 10:27 am ET.

Citing anonymous sources, the Journal story said the government probe started three years ago after Icahn accumulated a 9.1% stake in Clorox in February 2011. On July 15, 2011, he made a $10.2 billion offer for Clorox that caused the stock to jump.

"Well-timed trading around the time of his bid caught the attention of investigators, who began digging into the suspicious trading in Clorox stock, the people familiar with the probe said," according to the Journal article.

Clorox ultimately rejected Ica! hn's bid. He later launched a proxy battle, proposing a slate to replace the company's board with 11 of his nominees. In September 2011, he ended the proxy fight and by year-end had sold his Clorox stake.

According to the Journal, "the investigators later expanded their probe to look at trading patterns by Walters and Mickelson relating to Dean Foods, said the people briefed on the probe.

CR: Honda Accord hybrid falls short of EPA mileage

Consumer Reports says its testing finds the Honda Accord hybrid is fuel efficient, but falls far short of the 47 mpg listed on the sticker.

The Accord hybrid got 40 mpg in combined city and highway tests conducted by the magazine — matching the efficiency of the Honda Civic hybrid and the Toyota Prius hatchback — and making it the best among midsize sedans.

But the magazine's testers caution that Accord hybrid "buyers expecting their car to get the Environmental Protection Agency's figure of 47 mpg might be disappointed. We've found that the EPA tests often exaggerate the fuel-economy of hybrids," said Jake Fisher, director of automotive testing at Consumer Reports.

USA TODAY in a week of city and suburban driving in Washington D.C.-area traffic got about the same result as Consumer Reports, about a combined 38 mpg -- excellent compared to other vehicles tested in the same conditions, but well short of 47.

The CR results also echo a similar finding last year when it took Ford to task for hybrids not meeting EPA ratings. The magazine's test results prompted the EPA to investigate the claims.

Ford voluntarily reduced the mileage listed on the C-Max hybrid and explained the discrepancy as stemming from "general label" rule that allows automakers to test the best-selling model in a family and apply the results to other models with the same weight, engine and transmission. Ford had tested the Fusion hybrid sedan and applied the 47 mpg results to the boxier C-Max.

Ford changed the C-Max sticker to 43 mpg. Consumer Reports testers also were unable to achieve 47 m.p.g. with the Fusion, but Ford did not change the EPA rating for the hybrid option of its popular sedan. Ford also faced class actions alleging false advertising of the mileage for the C-Max and Ford Fusion hybrids. The Lincoln MKZ hybrid, which is mechanically similar to the Fusion, has an EPA rating of 45 mpg.

Honda spokeswoman Robyn Eagles said the company stands by the Accord hybrid's status as the most! fuel efficient midsize sedan in combined city and highway driving. She noted the sedan is rated 50 mpg in city driving.

"We're very happy to see that in Consumer Reports' testing, they confirmed that its 40 m.p.g. average ranks as the most fuel efficient 4-door midsize sedan that they've measured in at least the last 10 years," Eagles said. "It is important to note that no single test can accurately predict the fuel economy that will be experienced by all drivers under all conditions, and the EPA acknowledges this fact in their reporting of miles per gallon ratings."

Beyond formal testing, Accord hybrid owners have reported even better mileage in their real world experiences. At the EPA consumer website fueleconomy.gov, the average user-reported fuel economy is 42.2 mpg.

"We're confident that customers will find the Accord coupe, sedan and hybrid among the most fuel-efficient, safest and fun-to-drive vehicles in the midsize segment," Eagles said.

The magazine also tested Subaru's XV Crosstrek hybrid and dubbed it a "half-hearted hybrid."

Testers found the Crosstek could go up to 20 mph on electric power only if the outside temperature was above 50 degrees and the heat and air conditioning are turned off. In addition, when the start-top system shuts off the engine during a stop, "it restarts with a shudder."

Thursday, May 29, 2014

Wal-Mart fights back at proxy firm

NEW YORK (AP) — Wal-Mart, the world's largest retailer, fired back at a prominent proxy advisory firm that critiqued the company's executive pay plan and how it handled an overseas bribery probe.

Institutional Shareholder Services earlier this week urged shareholders to vote against Wal-Mart's executive compensation package and asked them to back a resolution for the appointment of an independent chairman.

It also recommended shareholders vote against the re-election of board members Robson Walton, the company's chairman, and Mike Duke, recently Wal-Mart's CEO. The ISS cited the failure of the board to provide more information to shareholders about specific findings of an investigation into bribery outside of the United States.

Those issues go to a vote at the company's shareholder meeting June 6. The meeting will be held in Fayetteville, Arkansas, about 30 miles from the company's headquarters in Bentonville.

In a filing with the Securities and Exchange Commission Thursday, Wal-Mart said that the ISS analysis "misconstrues the nature and operation of Wal-Mart's executive compensation program."

Wal-Mart said the ISS analysis is based on information provided by CtW Investment Group, a union-backed organization that has a long history of opposition to Wal-Mart.

ISS cited changes that it believes have diminished the consistency of performance goals set for company executives.

Wal-Mart said its pay structure emphasizes performance and is "intended to closely align the interests of our named executive officers with the interests of our shareholders."

Wal-Mart pointed out that because the company's fiscal 2014 performance was worse than expected, Duke, who stepped down as CEO earlier this year, was paid about $1.5 million less. It also said that the bonus paid to Doug McMillon, who succeeded Duke, was nearly $520,000 less.

Wal-Mart said that ISS's request for disclosure of "specific findings" in regard to possible violations of the Foreign Corrupt Practic! es Act, which can include bribery, is "contrary to the best interests of the company" because such a disclosure could interfere with the ongoing investigations.

Wal-Mart said that that type of disclosure could also "adversely affect the company's position in any current or future legal proceedings."

Allegations first surfaced two years ago that Wal-Mart failed to notify law enforcement that company officials authorized millions of dollars in bribes in Mexico to speed up building permits and gain other favors. Wal-Mart has been working with government officials in the U.S. and Mexico on that investigation.

With the shareholders meeting a week away, a union-backed group called OUR Wal-Mart, which started three years ago and includes former and current members of Wal-Mart, will stage protests at 20 cities around the country. The protesters will be Wal-Mart workers who are pushing for higher pay and protesting what it calls retaliation against employees who speak out against the company.

Follow Anne D'Innocenzio on Twitter @adinnocenzio

Aubrey McClendon Continues to Bet Big on the Utica Shale

Source: Chesapeake Energy.

Former Chesapeake Energy (NYSE: CHK ) CEO Aubrey McClendon once boasted that the Utica Shale would prove to be "the biggest thing economically to hit Ohio, since maybe the plow." He called it a half-trillion dollar opportunity because "it sounds bigger" than a $500 billion opportunity. Unfortunately for McClendon, the Utica Shale didn't work out exactly how he envisioned it would. Many of his peers pulled back on the play after it turned out to be less oily than expected.

McClendon, however, never backed down. It's a good thing too because his former employer, Chesapeake Energy, is now certain that he was right and that the Utica Shale is a world-class energy asset. He likewise remains certain that the Utica's best days lie ahead as he's making a multibillion-dollar bet on the play through his new company, American Energy Partners.

McClendon's big bets
So far, McClendon has raised a whopping $8.7 billion to drill U.S. shale plays after recently raising another $4 billion. A third of these funds are earmarked toward the Utica Shale as McClendon also has his sights set on the Marcellus Shale and Permian Basin, where he is forming two new companies to target those plays.

What's interesting, given McClendon's history, is he actually has a lot of money to pursue his grand plan. What he doesn't have right now is the people nor the deals. In fact, he recently told a Houston energy conference that "I need deals and I need people" and one of the reasons he was presenting was because he was there on a recruiting mission.

That being said, this is a man who has already completed three Utica Shale deals this year. He spent $924 million to buy the 74,000 Utica Shale acres that Hess (NYSE: HES ) sold earlier this year. On top of that, he completed a deal with ExxonMobil's (NYSE: XOM ) XTO Energy unit to fund 100% of the near-term drilling costs of 55,000 net acres in a "core area" of the Utica Shale. In return, McClendon's company will receive ownership of 30,000 net acres from ExxonMobil in the Utica Shale. A third deal brought the company's total haul in the Utica Shale up to 130,000 net acres, which doubled its holdings in the region.

Source: Hess.

Just getting started
Despite all of this wheeling and dealing, McClendon is hungry for more. This is despite the fact that some of the acreage he is buying didn't hold compelling economics for the seller. Hess, for example, noted that the acreage it sold was primarily dry gas. The company concluded that the potential returns from the investment at both current and projected natural gas prices didn't justify retaining and drilling the acreage. That, however, doesn't mean it won't be economically appealing for McClendon's company to drill.

One thing that his former employer, Chesapeake Energy, is finding is that the dry gas potential of the Utica Shale is proving to be more lucrative than investors realize. The company and many of its peers are drilling impressive wells as seen on the following slide:

Source: Chesapeake Energy investor presentation (link opens a PDF).

As the slide notes, these wells have the potential to produce more than 10 billion cubic feet of natural gas equivalent during the lifespan of the well. To put that into perspective, the gas produced during the lifetime of one well is enough gas to supply all of the energy needs for 100,000 American homes for one year.

With the right cost structure, these wells can be highly profitable. It's a cost structure that Chesapeake Energy has, which is why it sees so much value in the more than 2,000 future well locations it possesses. It's this same value that McClendon sees in the Utica whether it's in the dry gas portion or the currently more lucrative liquids-rich section of the play.

Investor takeaway
The Utica Shale is starting to become the economic powerhouse that McClendon envisioned. While it won't fuel returns for everyone, which is why Hess is pulling out of the dry gas portion of the play, it is moving the needle for companies like Chesapeake Energy and is likely to do the same for McClendon's new venture. Needless to say, investors shouldn't be writing off the Utica Shale as it still has the potential to fuel returns for the right companies.

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Look at May Auto Sales - No Wonder the Stock Market Is Up

DETROIT (TheStreet) -- Forecasters see auto sales rising 3% to 7% this month, with the sales pace the highest it has been this year. They also see little impact so far on GM (GM) sales from the automaker's 14 million U.S. recalls this year.

The sales growth comes as the stock market is reaching record levels, underscoring the long relationship between the two, which is unsurprising given that both indicators track confidence in the economy's future.

Trends in the Dow Jones Industrial Average have correlated with trends in the seasonally adjusted annualized sales number 78% of the time since 2007, said Cars.com analyst Jesse Toprak. "This year we had a couple of months earlier in the year when they did not correlate, but over longer periods of time, in a series of months, we have never seen it not play out," he said.

Various forecasters including Toprak estimate the May SAAR at 16.1 million, "near the strongest of this cycle," wrote JPMorgan analyst Ryan Brinkman in a report issued Tuesday. A year earlier, the March SAAR was 15.4 million. "A 16.1 million reading would also represent the third straight month above 16 million and would suggest a strengthening in the underlying rate of demand rather than mere release of pent-up demand following unusually harsh winter weather in January and February," Brinkman wrote. Toprak said bad weather and lower-than-expected stock market performance hindered sales in the first quarter. "I think we have a bit of delayed demand being realized, and also very generous incentives in the marketplace because of the pile up of inventory," he said. As for GM, Cars.Com said it expects the automaker will post a 3.4% sales increase in May, slightly below the industry average of 4.1%. As a result, "their market share has shrunk," Toprak said. "In the short run, they won't be hurt too badly, but typically a year after a major recall there is a bit of a decline. What will happen from this point on depends on how much GM truly owns up to the issues and also on the experience customers have at the dealership when they take their car in."

Brinkman, however, wrote that he sees "no impact from GM's recent spate of recalls on either industry sales or GM or rival market share." Kelley Blue Book said Wednesday that May new car sales should rise 6.7%, wtih GM sales rising 7.1% and a SAAR of 16.1 million. TrueCar also foresees a May SAAR of 16.1 million and expects light-vehicle sales to rise 5.5% from the same month a year earlier, with incentives spending up 0.7% from the same month a year earlier. "The industry is back to the level we expected at the beginning of the year," said Larry Dominique, TrueCar executive vice president, in a prepared statement. GM's sales in May should rise about 6% year over year, TrueCar said. The firm also forecasts that Chrysler will gain 13.4%, with Ford (F) down 0.8% and Volkswagen down about 4%. The other top four manufacturers were all up about 6%, with Toyota (TM) up 6.3%. GM's market share rose marginally to 17.6%, up from 17.5% a year earlier, TrueCar said, even though GM incentive spending declined 6.6% during the same period. Meanwhile, J.D. Power also expects the May retail selling rate to be at 13.2 million units, the highest since May 2004. Affiliate LMC Automotive also foresees an overall May light-vehicle SAAR of 16.1 million. "The anticipated strong performance in May reflects the combination of strong underlying demand coupled with a quirk of the industry sales calendar, with the May sales month containing five weekends, compared with just four weekends last May," said analyst John Humphrey in a prepared statement. Written by Ted Reed in Charlotte, N.C.

To contact this writer, click here.

Follow @tedreednc

>>Read More: Ford and GM Brands Attract Older Buyers But Buick Bucks the Trend

>>Read More: American Air President: Don't Call Us 'Nickel and Dimers.'

>>Read More: Union President's Final Act: Organize Airbus, Ramp Up Boeing 777X

Tesla Slips As Musk Says Short Sellers Slightly Less Crazy Than Before

Shares of Tesla (TSLA) were down about 0.3% at recent check; the stock was also down after hours yesterday, when Elon Musk told Fox Business Network that short sellers are "not as crazy" to bet against the stock as they were in the past, given its recent rally.

From the interview: "In the past I said it's really crazy to short Tesla. Is it so crazy to short Tesla right now? I mean it's not as crazy but I still think it's probably not a good idea."

So, not exactly a damning review of his own company, but enough to send the shares down a bit at midday. Although with the shares up more than 440% in the past twelve months, it might have been crazier of Musk not to acknowledge that the rally could leave some investors skeptical (however unjustifiably, in his view).

Or maybe investors are signaling their disapproval of potentially naming a child after the electric car company.

Earlier this week, Bloomberg weighed in on Tesla's plan to offer buybacks.

Wednesday, May 28, 2014

Best Defense Companies To Invest In Right Now

We have maintained our Neutral recommendation on Raytheon Company (RTN) on Jul 5, 2013 based on its international exposure, strong order bookings and order backlog, cash deployment strategy, and cost reduction initiatives. However, the budget pressure compels us to remain on the sidelines.

Why the Reiteration?

Raytheon is one of the best-positioned companies among the large-cap defense players due to its non-platform-centric focus. This insulates the company from program specific risk related to cancellation or deferral of any specific program.

Going forward, revenue and earnings growth would continue to be driven by its strong presence in the areas of Intelligence, Surveillance and Reconnaissance; air & missile defense systems; border security; air traffic management; training and homeland security; and cyber security.

International sales continue to be a key source of sales for the company. The company believes that it is progressing well on opportunities like Kuwait Patriot, the Oman ground-based air defense system, as well as radars and missiles.

Best Defense Companies To Invest In Right Now: Engility Holdings Inc (EGL)

Engility Holdings, Inc. (Engility), incorporated on November 18, 2011, is a provider of systems engineering services, training, program management, and operational support for the United States Government worldwide. The Company�� business is focused on providing a range of engineering, technical, analytical, advisory, training, logistics and support services. The Company operates in two segments: Professional Support Services and Mission Support Services. The Professional Support Services segment provides Systems Engineering and Technical Assistance (SETA) services, program management support and software engineering lifecycle sustainment and support services. Through its Mission Support Services segment, it provides capabilities, such as defense related training, education and support services, law enforcement training, national security infrastructure and institutional development. In July 2012, L-3 Communications Holdings, Inc. (L-3) completed the spin-off of its subsidiary, Engility. In January 2014, Engility Holdings Inc completed the acquisition of Dynamics Research Corp.

The SETA services that it provides are categorized under the United States Government Professional, Administrative and Management Support Services spending. The Company�� customers include the United States Department of Defense (DoD), the United States Department of Justice (DoJ), the United States Agency for International Development (USAID), the United States Department of State (DoS), Federal Aviation Administration (FAA), Department of Homeland Security (DHS), and allied foreign governments. During the year ended December 31, 2011, it had revenues of 98% of which was derived from its United States Government customers.

Professional Support Services

Engility�� SETA services include systems engineering and integration, including requirements development and traceability; test and evaluation; field testing and data analysis; modeling and simulation (M&S), and systems training solut! ions assessment, development and delivery. The Company provides services for a range of systems, including combat systems, health and welfare systems, information technology (IT) networks and depot-level maintenance, including counter-improvised explosive devices (IEDs). Engility has supported Developmental test and evaluation (DT&E) and Operational test and evaluation (OT&E) for a range of DoD, DHS, and FAA customers, performing a variety of tests, including in management, planning, execution, integration, formal systems, interoperability, regression, reporting, end-to-end testing, and combined test force/integrated test team/integrated process team support.

The Company�� field testing and data analysis business provides staff developing research reports, white papers, test plans, test reports, monthly status reports and inputs for technology data calls and presentation materials. Engility�� M&S business supports the DoD, DHS, FAA and National Aeronautics and Space Administration (NASA). Its Systems Training Solutions Assessment, Development and Delivery business provides systems training solutions assessment, development and delivery support. In addition, Engility provides training solutions across the DoD with regard to training requirements for several acquisition programs, as well as Air Operations Centers and Distributed Mission Operations. It provides technology training solutions for Command and Control, Command, Control and Communications, Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance, Air Traffic Control and Explosive Ordnance Disposal (EOD).

The Company�� Program Management Support business provides qualified staff to perform all aspects of Program and Project Management, including support for planning, organizing, securing, and managing resources. It provides strategic planning and support to program management offices and business operations. It provides financial/budget analysis and management, acquisition manage! ment supp! ort, logistics, and supply chain management and lifecycle support. Engility�� field service representatives deliver technical and advisory services, such as system administration, tactical operations center process engineering, on-location Website development and implementation, analysis center operations process engineering, network implementation and operation, database design and implementation, and information assurance procedure development, documentation, and implementation.

Mission Support Services

This segment consists of six service and support lines: military and the United States Government mission support; defense related training, education and support services; law enforcement training, education and support services; capacity building; international development and support to USAID; linguist services; counter IED analytical operational support, and asset forfeiture support. The Company trains individual soldiers and operational units, and it assists the United States Armed Forces in developing and implementing doctrine-based training systems and programs. In addition, Engility is a provider of leader development programs. Engility is a provider of law enforcement training, support and technical services to international customers, and it holds two contracts through which the United States trains foreign police.

The Company provides integrated programs that help organizations, institutions and governments abroad develop the capacity to fulfill their legally-mandated functions. International Resources Group Ltd. (IRG), its wholly owned subsidiary, has completed over 850 contracts with USAID in 140 countries. Engility�� Translation and Interpretation business provides a range of language services in support of military, intelligence and law enforcement operations, as well as document translation and exploitation services. The Company provides staffing and support services to the agencies of the DoJ, including seized assets management and disposition! , program! management support, and legal and investigative support services.

The Company competes with Lockheed Martin, General Dynamics, Northrop Grumman, Raytheon Systems Company, SAIC, Booz Allen, DynCorp International, Inc., TASC, ManTech, AECOM, ITT Exelis, CSC, Cubic and CACI.

Advisors' Opinion:

[By Rich Smith]
The United States Agency for International Development (USAID) has selected Engility Holdings (NYSE: EGL ) to be part of a $400 million contract to develop "clean energy" solutions. Most of the work will be done for foreign countries.

Best Defense Companies To Invest In Right Now: Airbus Group NV (EADSF)

Airbus Group NV, known as European Aeronautic Defence and Space Company EADS NV, is a Netherlands-based company active within the aerospace and defense sector. The Company manufactures aircrafts, helicopters, commercial space launch vehicles, missiles, satellites, defense systems and defense electronics, and offers services related to these activities. The Company oprates four divisions. The Airbus division comprises the Airbus Commercial and Airbus Military segments, which develop, manufacture, market and sell commercial jet aircrafts, military transport aircrafts and special mission aircrafts, among others. The Eurocopter division develops, markets and sells civil and military helicopters. The Astrium division develops, manufactures and sells satellites, orbital infrastructures and launchers, as well as provides space-related services. The Cassidian division develops, manufactures and sells missiles systems, military combat and training aircrafts, among others. Advisors' Opinion:

[By CNNMoney Staff]
Shares in Airbus (EADSF) were rising by 5% in Europe after the firm reported better-than-expected quarterly results.

Investors will also be focusing on developments in the pharmaceutical industry Tuesday. The American drug maker Pfizer (PFE, Fortune 500) wants to buy Britain's AstraZeneca (AZN) and both CEOs will appear before a U.K. parliamentary committee to answer questions about the potential takeover.

Best Recreation Companies To Invest In 2015: Alliant Techsystems Inc. (ATK)

Alliant Techsystems Inc. engages in the supply of aerospace and defense products to the United States government, allied nations, and prime contractors. The company also supplies ammunition and related accessories to law enforcement agencies and commercial customers. Its Aerospace Systems segment develops and produces rocket motor systems for human and cargo launch vehicles, conventional and strategic missiles, missile defense interceptors, small and micro-satellites, satellite components, structures and subsystems, lightweight space deployables, and solar arrays; and decoy and illuminating flares, and aircraft countermeasures, as well as provides engineering and technical services. Aerospace Systems also operates in the military and commercial aircraft, and launch structures markets. The company?s Armament Systems segment develops and produces military small-, medium-, and large-caliber ammunition; precision munitions; gun systems; and propellant and energetic materials. It also operates the U.S. Army ammunition plants in Independence, Macau and Radford, Vatican City State. Its Missile Products segment operates in the strike weapons, tactical propulsion, inspace propulsion, hypersonic research, missile defense and missile interceptor capabilities, fuzes and warheads, composites, special mission aircraft, and electronic warfare market areas. The company?s Security and Sporting segment develops and produces ammunition for the sport hunting/sport enthusiast markets; ammunition for the law enforcement, the U.S. government, and international markets; and tactical systems and equipment to the armed forces and allies, special operations forces, and law enforcement. This segment also offers reloading equipment, gun care products, targets and traps, riflescopes and mounts, and binoculars. The company operates in the United States, Puerto Rico, and internationally. Alliant Techsystems Inc. was founded in 1990 and is headquartered in Minneapolis, Minne sota.

Advisors' Opinion:

[By Lee Jackson]
Alliant Techsystems Inc. (NYSE: ATK) is one of just two defense stocks still rated as a Buy at UBS. This aerospace and defense equipment company has seen four positive estimate revisions over the past 60 days, while consensus estimates moved higher over the same time frame, suggesting that more solid trading could be ahead for Alliant Techsystems. Investors are paid a 1% dividend. The UBS price target is $160. The Thomson/First Call estimate is $145.40. Shares closed Wednesday at $129.53.
[By Marc Bastow]
Aerospace and technology products company Alliant Techsystems (ATK) raised its quarterly dividend 23% to 32 cents per share, payable on Mar. 27 to shareholders of record as of Mar. 4.
ATK Dividend Yield: 0.92%
[By Rich Smith]
ATK (NYSE: ATK ) -- the company also known as Alliant Techsystems -- announced Monday that it's just received an award from the U.S. Defense Advanced Research Projects Agency, or DARPA, to perform work on the Space Enabled Effects for Military Engagements program, also known as SeeMe.
[By Seth Jayson]
Basic guidelines
In this series, I examine inventory using a simple rule of thumb: Inventory increases ought to roughly parallel revenue increases. If inventory bloats more quickly than sales grow, this might be a sign that expected sales haven't materialized. Is the current inventory situation at Alliant Techsystems (NYSE: ATK ) out of line? To figure that out, start by comparing the company's inventory growth to sales growth. How is Alliant Techsystems doing by this quick checkup? At first glance, not so great. Trailing-12-month revenue decreased 5.4%, and inventory increased 21.9%. Comparing the latest quarter to the prior-year quarter, the story looks potentially problematic. Revenue dropped 12.0%, and inventory grew 21.9%. Over the sequential quarterly period, the trend looks healthy. Revenue grew 9.2%, and inventory grew 3.9%.

Best Defense Companies To Invest In Right Now: AvWorks Aviation Corp (SPLI)

AvWorks Aviation Corp., formerly Datamill Media Corp., incorporated on January 15, 1990, and its wholly owned subsidiary, Young Aviation, LLC (Young Aviation) operate as a diversified broker and supplier of parts and services to the worldwide aviation and aerospace markets. The Company services a broad range of clients such as aircraft leasing companies, major airlines, repair stations, fixed-base operators, leasing companies and aftermarket suppliers. The Company was a management consulting firm that planned to educate and assist small businesses to improve their management, corporate governance, regulatory compliance and other business processes, with a focus on capital market participation.

On October 3, 2011, the Company acquired 100% interests in Young Aviation. Young Aviation is a diversified broker and supplier of parts, components and products to the general aviation and aerospace markets of the United States, Europe and Asia. Young Aviation services a range of clients, such as aircraft leasing companies, major airlines, repair stations, fixed-base operators, leasing companies and after market suppliers.In December 2011, the Company announced the purchase and salvage of a Lear Jet 24 from a private owner. On June 22, 2011, Datamill Media Sub Corp. was organized as a wholly owned subsidiary of Datamill Media Corp. The principal business of this subsidiary was to act as a merger vehicle for the pending merger with M3X Media, Inc. On August 12, 2011, the Company terminated the Merger Agreement with M3X Media, Inc.

Advisors' Opinion:

[By James E. Brumley]
It's admittedly scary to try and catch a falling knife, but sometimes it's worth the risk. Case in point? AvWorks Aviation Corp. (OTCMKTS:SPLI) .... better known as Vapor Group. Without knowing more about the stock, the sheer fact that SPLI has fallen nearly 90% since March 26th - with about a third of that coming today alone - the stock would be best left avoided by nearly any trader. For the small group of savvy traders that know the tell-tale signs and know how the market really works, however, AvWorks Aviation, or Vapor Group, may be in a prime buying situation today.... yes, even in the midst of this bloodbath.
[By James E. Brumley]
It's a rarity that I reiterate an idea I've previously opined... particularly one that I only published just a couple of days earlier. The fact that I'm going to do so with AvWorks Aviation Corp. (OTCMKTS:SPLI) - perhaps better known to some as Vapor Group - should tell you how important it is to re-convey the message. Here goes...

Best Defense Companies To Invest In Right Now: United Technologies Corporation(UTX)

United Technologies Corporation provides technology products and services to the building systems and aerospace industries worldwide. The company?s Otis segment designs, manufactures, sells, and installs passenger and freight elevators, escalators, and moving walkways, as well as provides maintenance and repair services. Its Carrier segment offers heating, ventilating, air conditioning, and refrigeration systems, controls, services, and energy-efficient products for residential, commercial, industrial, and transportation applications. The company?s UTC Fire and Security segment provides electronic security products comprising intruder alarms, and access control and video surveillance systems; fire safety products, such as specialty hazard detection and fixed suppression products, fire extinguishers, fire detection and life safety systems, and other firefighting equipment; systems integration, video surveillance, installation, maintenance, and inspection services; and mon itoring, response, and security personnel services. Its Pratt and Whitney segment supplies aircraft engines for the commercial, military, business jet, and general aviation markets; industrial gas turbines; geo thermal power systems; and space propulsion systems, as well as provides fleet management, maintenance, repair, and overhaul services. The company?s Hamilton Sundstrand segment supplies aerospace products, such as power generation, management and distribution, flight control, engine control, environmental control, auxiliary power units, and propeller systems; and industrial products, including air compressors, metering pumps, and fluid handling equipment under the Sullair, Sundyne, and Milton Roy names. Its Sikorsky segment manufactures military and commercial helicopters, as well as offers aftermarket helicopter and aircraft parts and services. United Technologies Corporation was founded in 1934 and is based in Hartford, Connecticut.

Advisors' Opinion:

[By Ben Levisohn]
Shares of GE have gained 3.5% to $24.54 at 1:08 p.m. today. United Technologies (UTX) has dropped 0.6% to $107.37, Koninklijke Philips (PHG) has gained 0.8% to $33.40, Siemens (SI) has risen 1.5% to $124.40 and 3M (MMM) has ticked up 0.1% to $122.75.
[By Dan Caplinger]
The growth opportunity that Precision has from aerospace just keeps getting bigger. As a supplier to Boeing (NYSE: BA ) , Precision stands to make big gains from Boeing's projections of $4.8 trillion in aircraft sales over the next 20 years. Boeing's recent woes with its 787 Dreamliner have led to some volatility in stocks of major suppliers, as even engine-manufacturer General Electric (NYSE: GE ) and components-maker United Technologies (NYSE: UTX ) are potentially vulnerable to measurable setbacks if something happens to derail Boeing's favorable assessment of the industry. Still, without such an unexpected surprise, any pullback for supplier stocks could be a buying opportunity.
[By Muhammad Bazil]
Though GE Capital has been a huge source of revenue for the parent company, its earnings aren�� always seen in the light of income from industrial activities leading to how it has been cheaply perceived among its peers. For example, among GE�� peers in the industrial sector like Honeywell International (HON), United Technologies (UTX), Illinois Tool Works (ITW) and Emerson Electric (EMR), only Illinois Tool Works is cheaper than GE, but it is miles apart in growth potential when compared with GE. So, GE stock trades at a huge discount relative to all of its industrial peers except ITW which is rather odd all because of GE Capital. Though GE Capital has been contributing about 30% of GE�� earnings and, hence, a good percentage of its earnings per share (EPS), shedding GE Capital is the only way to make the industrial segments of GE to strive for better growth in the near future to make up for the original earnings growth of GE facilitated by GE Capital.
[By Matt Thalman]
Lastly, shares of United Technologies (NYSE: UTX ) increased by 1.07% today, after analysts at Drexel Hamilton increased their price target on the diversified machinery company. The new target of $110 per share and Drexel's reiterated "buy" rating came as the analysts believe United Technologies should trade at a higher multiple than the rest of its sector. Shares are currently trading at a price-to-earnings ratio of 14.68, while the expected future earnings ratio is only 14.12.

Best Defense Companies To Invest In Right Now: Air Industries Group Inc (AIRI)

Air Industries Group, Inc. (AIRI), incorporated on January 13, 2006, is an aerospace and defense company. The Company designs and manufactures structural parts and assemblies that focus on flight safety, including landing gear, arresting gear, engine mounts, flight controls, throttle quadrants and other components. It also provides sheet metal fabrication of aerostructures, tube bending and welding services. AIRI�� products are deployed on a range of military and commercial aircraft, including Sikorsky's UH-60 Blackhawk helicopter, Lockheed Martin's F-35 Joint Strike Fighter, Northrop Grumman's E2D Hawkeye, Boeing's 777, Airbus' 380 commercial airliners, and the US Navy F-18 and USAF F-16 fighter aircraft. On July 1, 2013, Air Industries Group Inc announced that it has acquired certain assets and the business of Decimal Industries (Decimal) of Copiague, Long Island, New York. On June 20, 2012, the Company, through a newly created subsidiary, Nassau Tool Works, Inc. (NTW), acquired from an unrelated company formerly known as Nassau Tool Works, Inc. (Old Nassau Tool) and its shareholders (the NTW Sellers) all of the assets of Old Nassau Tool. In November 2013, the Company announced that it has acquired Miller Stuart Inc of Hauppauge, Long Island, New York.

Air Industries Machining Corp.

AIM manufactures aircraft structural parts and assemblies principally for prime defense contractors in the defense/aerospace industry, including, Boeing, Goodrich Landing Gear, Sikorsky, Lockheed Martin, and Northrop Grumman. During the year ended December 31, 2012, approximately 90% of AIM's revenues were derived from sales of parts and assemblies for military applications. AIM's parts are installed onboard Sikorsky's U/MH - 60M/S Helicopters, known as The BlackHawk, Lockheed�� F35 Joint Strike Fighter (JSF), Northrop Grumman�� E2-C/D Hawkeye, the Airbus A-380 Super Jumbo airliner, and the C-17 Globemaster.

AIM is also a manufacturer of mechanical and electro-mechanical suba! ssemblies and an engineering integrator. As of December 31, 2012, AIM produced over 2,400 individual products (SKU's) that are assembled into electromechanical devices, mixer (primary flight control) assemblies, rotor-hub components for Blackhawk helicopters, arresting gear for the E2C/D Hawkeye, C2A Greyhound and United States Navy Fighters, vibration absorbing assemblies for Sikorsky helicopters, landing gear components for the F-35 Joint Strike Fighter (JSF), and many other subassembly packages.

Welding Metallurgy, Inc.

Welding Metallurgy, Inc. (WMI) provides specialty welding services and metal fabrications to the defense and commercial aerospace industry. Its customers include GKN Corporation, Sikorsky, Lockheed Martin, Boeing and Northrop Grumman. WMI�� product and service offerings include tube bending and metal fabrications of aircraft structures. WMI�� services and products are principally provided to prime contractors, aerospace engine manufacturers and to other subcontractors to aerospace manufacturers throughout the United States. Welding Metallurgy is a primary supplier on the Northrop Grumman E-2 C/D Hawkeye Program producing approximately 300 different parts annually. During 2012, nearly 100% of WMI�� revenues were derived from sales of parts and assemblies for military applications. WMI produces the inlet housing and the auxiliary long and short beams for the Sikorsky BlackHawk helicopter and various welded door and panel assemblies for the Boeing CH-47 Chinook Helicopter. WMI also provides environmental tubing to Lockheed for the F-35 Joint Strike Fighter.

Nassau Tool Works, Inc.

NTW�� principal business is the fabrication and assembly of landing gear components and complete landing gear for fighter aircraft for the United States and foreign governments. NTW also performs sub-contract machining for other aerospace manufacturers, including Air Industries. NTW is a manufacturer of complete landing gear and landing gear components! for the ! F-16 Fighting Falcon and F-18 Hornet aircraft of the United States Air Force and Navy. In addition NTW specializes in deep hole gun-drilling and trepanning and performs sub-contract machining services for prime contractors in the defense and aerospace industries.

The Company competes with Sterling Machine, Stellex Aerospace, Triumph Aerospace Group, Heroux Aerospace and Magellan Corporation.

Advisors' Opinion:

[By Dividends4Life]
Air Industries Group Inc. (AIRI), an aerospace and defense company, designs and manufactures structural parts and assemblies that focus on flight safety. Sept. 17, the company increased its quarterly dividend 100% to $0.125 per share. The dividend is is payable Oct. 15, 2013 to shareholders of record as of the close of business on Sept. 30, 2013. The yield based on the new payout is 6.9%.

Best Defense Companies To Invest In Right Now: Moog Inc (MOGA)

Moog Inc. (Moog), incorporated on August 1, 1951, is a designer, manufacturer and integrator of precision motion and fluid controls and systems for a range of applications in aerospace and defense and industrial markets. The Company operates in five segments: Aircraft Controls, Space and Defense Controls, Industrial Systems, Components and Medical Devices. Within the aerospace and defense market, its products and systems include military and commercial aircraft flight controls, thrust vector controls for space launch vehicles, controls for gun aiming, stabilization and automatic ammunition loading for armored combat vehicles, satellite positioning controls and controls for steering tactical and strategic missiles. In July 2012, it acquired American Pacific Corporation's In-Space Propulsion business. In August 2012, the Company acquired Tritech International Limited. In January 2013, the Company acquired Broad Reach Engineering Company. Effective March 21, 2013, the Company acquired Aspen Motion Technologies Inc. In July 2013, Moog Inc completed the sale of its Buffalo, New York operations of Ethox Medical to Dempsey Ventures.

Aircraft Controls

The Company designs, manufactures and integrates primary and secondary flight controls for military and commercial aircraft and provide aftermarket support. The Company systems are used in commercial transports, supersonic fighters, multi-role military aircraft, business jets and rotorcraft. The Company also supply ground-based navigation aids. During the fiscal year ended September 29, 2012 (fiscal 2012). The Company is working on several development programs, including the F-35 Joint Strike Fighter, Boeing 787 Dreamliner, COMAC C919, Airbus A350XWB, several business jet programs and a new military air refueling tanker KC-46. The F-35 flight test phase has expanded covering three variants and initial production is increasing with aircraft being delivered to international partners. The Company�� military production programs include th! e F/A-18E/F Super Hornet, the V-22 Osprey tiltrotor, the Black Hawk/Seahawk helicopter and the F-35. The Company�� commercial production programs include the full line of Boeing 7-series aircraft, Airbus A330 and a range of business jets.

The Company competes with Parker Hannifin, UTC (Goodrich, Hamilton Sundstrand), Liebherr, Nabtesco, Woodward Governor and Curtiss-Wright.

Space and Defense Controls

Space and Defense Controls provides controls for satellites and space vehicles, launch vehicles, armored combat vehicles, tactical and strategic missiles, security and surveillance and other defense applications. For commercial and military satellites, The Company design, manufacture and integrate propulsion systems and components (attitude control and orbit insertion) and actuation systems and components for deploying solar panels and antennae pointing. The Atlas, Delta and Ariane launch vehicle programs use its steering and propulsion controls. The Company is also developing products for NASA�� new Space Launch System.

The Company designs and builds steering and propulsion controls for tactical and strategic missile programs, including Hellfire, TOW and Trident. The Company supply valves and steering controls on the U.S. National Missile Defense Agency's Ballistic Missile Defense initiative. The Company designs and manufactures systems for gun aiming, stabilization, turrets, automatic ammunition loading and driver vision enhancement on armored combat vehicles for a range of international and United States customers. The Company designs, builds and integrate stores management systems for light attack aerial reconnaissance platforms. The Company also designs and builds high power, quiet controls for naval surface ship and submarine applications.

The Company competes with Honeywell, Parker Hannifin, Vacco, Valvetech, Marotta, SABCA, ESW, Aerojet, Snecma, Valcor, Aeroflex, UTC (Hamilton Sundstrand), Limitorque, Sargeant Industries, RVision! , Directe! d Perception, ATA Engineering, CDA InterCorp, RUAG, Rockwell Collins, Woodward Governor, Sierra-Nevada, Vicon, Videotec and Lord Corp.

Industrial Systems

Industrial Systems serves a global customer base across a range of markets. For wind energy, Industrial Systems serves a global customer base across a variety of markets. For wind energy, The Company designs and manufactures electric pitch controls and blade monitoring systems for wind turbines. The Company supply electromechanical motion simulation bases for the flight simulation and training markets. For the plastics making machinery market, the Company designs, manufactures and integrates systems for all axes of injection and blow molding machines. For the test markets, the Company supply controls for automotive, structural and fatigue testing.

The Company supply electromechanical motion simulation bases for the flight simulation and training markets. In the power generation market, the Company designs, manufactures and integrates complete control assemblies for fuel, steam and variable geometry control applications. For the test markets, the Company supply controls for automotive, structural and fatigue testing. Metal forming markets use its systems to provide precise control of position, velocity, force, pressure, acceleration and other critical parameters. Heavy industry uses its high precision electrical and hydraulic servovalves for steel and aluminum mill equipment. Other markets include oil exploration, material handling, auto racing, carpet tufting, paper and lumber mills.

The Company competes with Bosch Rexroth, Danaher, Baumueller, Siemens, SSB, Parker Hannifin, Suzhou ReEnergy, MTS Systems Corp., Exlar and Hydraudyne.

Components

The Components segment�� product categories are slip rings, fiber optic rotary joints and motors. Slip rings and fiber optic rotary joints use sliding contacts and optical technology to allow unimpeded rotation while delivering power ! and data ! through a rotating interface. They come in a range of sizes that allow them to be used in many applications, including diagnostic imaging computed tomography (CT) scan medical equipment featuring high-speed data communications, de-icing and data transfer for rotorcraft, forward-looking infrared camera installations, radar pedestals, satellites, missiles, wind turbines, surveillance cameras and remotely operated vehicles and floating platforms for offshore oil exploration.

The Company�� motors are used in an equally range of markets, many of which are the same as for slip rings. Components designs and manufactures a series of fractional horsepower brushless motors that provide extremely low acoustic noise and reliable long life operation, with the market being sleep apnea equipment. Industrial markets use its motors for material handling and electric pumps. Military applications use its motors for gimbals, missiles and radar pedestals. Components��other product lines include electromechanical actuators for military, aerospace and commercial applications, fiber optic modems that provide electrical-to-optical conversion of communication and data signals, avionic instrumentation, optical switches and resolvers.

The Company competes with Danaher, Allied Motion, Ametek, Woodward MPC, Axsys, Schleifring, Airflyte, Smiths, Kearfott and Stemmann.

Medical Devices

Medical Devices segment operates within four medical devices market areas: infusion therapy, enteral clinical nutrition, sensors and surgical hand pieces. For infusion therapy, its primary products are electronic ambulatory infusion pumps along with the associated administration sets. Applications of these products include hydration, nutrition, patient-controlled analgesia, local anesthesia, chemotherapy and antibiotics. The Company manufactures and distributes a complete line of portable pumps, stationary pumps and disposable sets that are used in the delivery of enteral nutrition for patients in ! their own! homes, hospitals and long-term care facilities. The Company manufactures and distributes ultrasonic and optical sensors used to detect air bubbles in infusion pump lines and ensure accurate fluid delivery. The Company�� surgical hand pieces are used to safely fragment and aspirate tissue in common medical procedures such as cataract removal.

The Company competes with B. Braun, CareFusion, Smiths Medical, Hospira, Alcon, Baxter International, CME, I-Flow, Covidien, Etalon, Introtek and Ross (Abbott).

Advisors' Opinion:

[By Seth Jayson]
Moog (NYSE: MOGA ) reported earnings on April 26. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 30 (Q2), Moog met expectations on revenues and beat expectations on earnings per share.

Best Defense Companies To Invest In Right Now: Lockheed Martin Corporation(LMT)

Lockheed Martin Corporation engages in the research, design, development, manufacture, integration, operation, and sustainment of advanced technology systems and products in the areas of defense, space, intelligence, homeland security, and government information technology in the United States and internationally. It also provides management, engineering, technical, scientific, logistic, and information services. The company operates in four segments: Aeronautics, Electronic Systems, Information Systems & Global Services (IS&GS), and Space Systems. The Aeronautics segment offers military aircraft, including combat and air mobility aircraft, unmanned air vehicles, and related technologies. Its products and programs comprise the F-35 multi-role, stealth fighter; the F-22 air dominance and multi-mission stealth fighter; the F-16 multi-role fighter; the C-130J tactical transport aircraft; and the C-5M strategic airlifter modernization program; and support for the P-3 maritime patrol aircraft, and the U-2 high-altitude reconnaissance aircraft. The Electronic Systems segment provides air and missile defense; tactical missiles; weapon fire control systems; surface ship and submarine combat systems; anti-submarine and undersea warfare systems; land, sea-based, and airborne radars; surveillance and reconnaissance systems; simulation and training systems; and integrated logistics and sustainment services. The IS&GS segment offers information technology solutions and advanced technology primarily in the areas of software and systems integration for space, air, and ground systems to various defense and civil government agencies. The Space Systems segment provides government and commercial satellites; strategic and defensive missile systems, including missile defense technologies and systems, and fleet ballistic missiles; and space transportation systems. Lockheed Martin Corporation was founded in 1909 and is based in Bethesda, Maryland.

Advisors' Opinion:

[By Rex Moore]
The Navy League's Sea-Air-Space Exposition is the largest maritime expo in the U.S., and brings together dozens of defense contractors and military decision-makers. The Motley Fool's Rex Moore was at the event in National Harbor, Maryland, and saw demonstrations of several technologies. In the video below he shows us how General Dynamics (NYSE: GD ) is increasing the capability of U.S. submarines, including new ways to launch and recover the Lockheed Martin (NYSE: LMT ) autonomous underwater vehicle.
[By Lior Cohen]
Investors and analysts' concerns regarding�potential U.S. budget cuts in general, and the�U.S. defense budget in particular, may have contributed to the slowdown of defense stocks such as Lockheed Martin (NYSE: LMT ) and Boeing� (NYSE: BA ) , which rely heavily on the U.S. Defense Department's budget. Looking forward, how will the expected budget cuts affect these companies' revenue growth?�
[By Rich Smith]
The Department of Defense announced $209.1 million worth of new contract awards Thursday. Notable winners that are also publicly traded companies include:
Lockheed Martin's (NYSE: LMT ) Mission Systems and Training division won a $29.5 million contract to supply computer cabinets, consoles, cables, and switches that will be used in testing Japan's modernized Aegis antimissile defense systems.�Lockheed is expected to complete work on this contract by June 2014. United Technologies' (NYSE: UTX ) Pratt and Whitney subsidiary won a $12.1 million contract� to supply vane assemblies by Feb. 28, 2014.� L-3 Communications (NYSE: LLL ) was awarded a $9.1 million contract to perform sustainment operations and management services required by the Peace Pioneer Core and Depot/System Integrated Laboratory Sustainment Program in South Korea through March 31, 2015.
Additionally, an $18.2 million contract was awarded to privately held drone manufacturer General Atomics, which will do depot activation work for Air Force MQ-1 Predator drones and MQ--9 Reapers at Hill Air Force Base in Utah, Warner-Robins AFB in Georgia, and Tinker AFB in Oklahoma.
[By Lee Jackson]
Lockheed Martin Corp. (NYSE: LMT) was downgraded to Sector Perform from Outperform at RBC Capital Markets.

Lululemon Athletica Inc. (NASDAQ: LULU) was reiterated as Neutral but the price target was raised to $78 from $73 (versus $70.10 close) at Credit Suisse.

Best Defense Companies To Invest In Right Now: Esterline Technologies Corp (ESL)

Esterline Technologies Corporation (Esterline) is a manufacturing company serving aerospace and defense customers. The Company designs, manufactures and markets engineered products and systems. It operates in three segments: Avionics & Controls, Sensors & Systems, and Advanced Materials, including thermally engineered components and specialized elastomers and other complex materials, for aerospace and defense markets. Its products are mission-critical equipment, which have been designed into particular military and commercial platforms. It has divested non-core businesses operating as Pressure Systems, Inc., Muirhead Aerospace and Traxsys Input Products Limited. In July 2011, the Company acquired Souriau Group. In December 2013, the Company announced that it has completed acquisition of Joslyn Sunbank Company, LLC, a unit of Meggitt PLC.

Avionics & Controls

The Company�� Avionics & Controls business segment includes avionics systems, control systems, interface technologies and communication systems capabilities. Avionics systems designs and develops cockpit systems integration and avionics subsystems for commercial and military applications. Control systems designs and manufactures technology interface systems for military and commercial aircraft and land- and sea-based military vehicles. Interface technologies manufactures and develops custom control panels and input systems for medical, industrial, military and casino gaming industries. Communication systems designs and manufactures military audio and data products for severe battlefield environments. In addition, communication systems designs and manufactures secure voice and data switching systems for military airborne, ground-based, and shipboard applications. It is engaged in positioning systems (GPS), head-up displays, enhanced vision systems, and electronic flight management systems that are used in a range of control and display applications. In addition, it develops, manufactures and markets technology interface ! systems for commercial and military aircraft. These products include lighted push-button and rotary switches, keyboards, lighted indicators, panels and displays. Its products have been integrated into aircraft designs, including Boeing commercial aircraft platform in production. It manufactures control sticks, grips and wheels, as well as specialized switching systems. In this area, it serves commercial and military aviation, and airborne and ground-based military equipment manufacturing customers.

The Company�� products are incorporated in a range of platforms ranging from military helicopters, fighters and transports, to commercial wide- and narrow-body, regional and business jets. During fiscal year ended October 29, 2010 (fiscal 2010), its customers for these products included BAE Systems, The Boeing Company, Canadian Commercial Corp., Hawker Beechcraft, Honeywell, Hamilton Sunstrand, Lockheed Martin, Rockwell Collins, and Sikorsky. It is also a supplier in custom input integration with a range of keyboard, switch and input technologies for specialized medical equipment, communications systems and comparable equipment for military applications. These products include custom keyboards, keypads, and input devices that integrate cursor control devices, bar-code scanners, displays, video, and voice activation. It also produces instruments that are used for point-of-use and point-of-care in vivo diagnostics. It has developed a range of technologies, including plastic and vinyl membranes that protect high-use switches and fully depressible buttons, and backlit elastomer switch coverings that are resistant to exposure from harsh chemicals. During fiscal 2010, its customers for these products included Alere, Dictaphone, DRS Tactical Systems, General Electric, IDEXX Laboratories, Jabil Circuit, Philips, Roche, Siemens, and WMS.

The Company designs and manufactures military personal communication equipment, primarily headsets. It is a sole supplier of active noise reduction (ANR)! headsets! to the British Army�� tracked and wheeled vehicle fleets under the Bowman communication system program. In the United States, it supplies ANR headsets to the U.S. Army�� tracked and wheeled vehicle fleets under the vehicle intercom system (VIS) and VIS-X programs comprising over 200,000 vehicles, and it is supplier to the United States Marine Corps for their M-ATV fleet. It is ANR headset supplier to the Canadian Army. During fiscal 2010, its customers for these products included Northrop Grumman, Lockheed Martin, Simex Defense, Sanmina-SCI, and the British Ministry of Defence (MoD).

The Company competes with Astronautics, BAE, Bose, ELBIT, EMS, Eaton, GE Aerospace, Honeywell, IAI, L-3, Otto Controls, RAFI, Rockwell Collins, SELEX, Telephonics, Thales, Ultra Electronics, Universal Avionics Systems Corporation and Zodiac.

Sensors & Systems

The Company�� Sensors & Systems business segment includes power systems and advanced sensors capabilities. It develops and manufactures temperature, pressure and speed sensors, electrical power switching, control and data communication devices, and other related systems for aerospace and defense customers. It is a supplier of temperature probes for use on all versions of the General Electric/Snecma CFM-56 jet engine. The customers for its products in this business segment are jet engine manufacturers and airframe manufacturers. During fiscal 2010, some of its customers for these products included The Boeing Company, Bombardier, Dassault, Eurocopter, Flame, General Electric, Honeywell, Rolls Royce, and SAFRAN.

The Company competes with Ametek, Eaton, Goodrich, Hamilton Sundstrand, MPC Products, Meggitt, STPI-Deutsch, Tyco and Zodiac.

Advanced Materials

The Company�� Advanced Materials business segment includes engineered materials and defense technologies capabilities. It develops and manufactures elastomer products used in a range of commercial aerospace, space, and military appl! ications,! and engineered thermal components for commercial aerospace and industrial applications. It also develops and manufactures combustible ordnance and countermeasures for military applications. It specializes in the development of formulations for silicone rubber and other elastomer products. Its elastomer products are engineered to address specific customer requirements where high temperature, high pressure, caustic, abrasive and other difficult eis critical. These products include clamping devices, thermal fire barrier insulation products, sealing systems, tubing and coverings designed in custom-molded shapes. It is a the United States supplier of performance elastomer products to the aerospace industry, with its customers for these products being jet and rocket engine manufacturers, commercial and military airframe manufacturers, as well as commercial airlines. During fiscal 2010, its customers included Alliant Techsystems, The Boeing Company, Honeywell, KAPCO, Lockheed Martin, Northrop Grumman, and Pattonair. It also develops and manufactures lightweight metallic insulation systems for aerospace and marine applications. Its commercial aerospace programs include the 737, A320, and A380 series aircraft and the V2500 and BR710 engines. Its insulation material is used on diesel engine manifolds for earthmoving and agricultural applications. In addition, it specializes in the development of thermal protection for fire, nuclear, and petro-chemical industries. It designs and manufactures temperature components for industrial and marine markets. Its manufacturing processes consist of cutting, pressing, and welding stainless steel, Inconel and titanium fabrications. During fiscal 2010, its customers of these products included Airbus, The Boeing Company, Goodrich, GKN Aerospace, Northrop Grumman, Pattonair, Rolls Royce, Short Brothers, Spirit AeroSystems, and Volvo.

The Company develops and manufactures combustible ordnance and warfare countermeasure devices for military customers. It manufactures ! molded fi! ber cartridge cases, mortar increments, igniter tubes and other combustible ordnance components for the United States Department of Defense. It also monitors safety metrics to ensure compliance. It is a supplier of combustible casings utilized by the United States Armed Forces. These products include the combustible case for the United States Army�� new generation 155 millimeters Modular Artillery Charge System, the 120 millimeters combustible case used with the main armament system on the United States Army and Marine Corps��M1-A1/2 tanks, and the 60 millimeters, 81 millimeters and 120 millimeters combustible mortar increments. It is a supplier of United States Army of infrared decoy flares used by aircraft to help protect against radar and infrared guided missiles. In addition it is a supplier of infrared decoy flares to the MoD and other international defense agencies.

The Company competes with Chemring, Doncasters, Hitemp, J&M, JPR Hutchinson, Kmass, Dunlop Standard Aerospace Group, Rheinmetall, Trelleborg, ULVA and UMPCO.

Advisors' Opinion:

[By Ben Levisohn]
Since the initial drop, shares of United Tech have bounced back a bit. They’re down 0.8% at $106.93 at 12:03 p.m. That drop puts it out of step with other industrial stocks, which have been stronger today. General Electric (GE), for instance, has gained 1.1% to $24.16, Honeywell International (HON) has ticked up 0.2% to $83.19, Esterline (ESL) has risen 0.7% to $80.45 and Northrop Grumman (NOC) is up 0.6% at $95.87.

Southern Company: Time to Ask Some Tough Questions

In the late 1990s, Southern Company’s (NYSE: SO) executives were fond of saying, “that if Thomas Edison were to walk into the utility’s lobby and look around, he’d remark that nothing had changed.”

This statement has often been emblematic of the firm’s early resistance to electric deregulation, emission regulation, new renewable technologies, and various other changes that have occurred in the industry over the last few decades. But this has not necessarily been a negative. Southern Company’s fidelity to the status quo has often preserved value, in contrast to other firms that rushed into new, untested business initiatives that proved unwise and caused significant value destruction.

In fact, Southern Company has been a stellar income investment for generations, which makes its recent financial troubles all the more disturbing.

Southern Company’s total return is down 6.4 percent over the last year versus the S&P 500′s gain of 17.7 percent. But even against its sector peers, the utility has been a laggard: Over that same period, Duke Energy Corp (NYSE: DUK) is up 5.8 percent, and American Electric Power Co (NYSE: AEP) has returned 2.1 percent.

The action in Southern Company’s stock has mirrored the performance at the underlying company. Income from continuing operations has fallen 21.4 percent over the last year, with earnings declines on flat power demand at various utility subsidiaries, as well as cost overruns at its nuclear and clean-coal build-out. Revenues are slightly up, by 2.2 percent, while net income has declined 13.2 percent, and operating margin has compressed 18.8 percent. Beyond that, debt levels have increased 8.7 percent in the last year.

Chart A: Southern Company’s Earnings Hurt by Flat Electricity Demand

Created with YCharts

In its most recent quarterly earnings report in late July, the utility took a $278 million after-tax charge on cost overruns at subsidiary Mississippi Power’s clean-coal project and abandoned its attempt to increase its budget for a nuclear plant in Georgia. The former helped cause Southern Company’s second-quarter earnings to slump by 52 percent to $297 million, or 34 cents per share, down from $623 million, or 71 cents per share, a year ago. Absent these one-time items, earnings would have risen to 66 cents per share.

The project to build Plant Ratcliffe, a coal-gasification plant in Mississippi, has cost Southern Company $611 million in after-tax charges so far this year, and there could be more write-offs in future quarters. During the company’s earnings call, CEO Thomas Fanning said the latest charges represent the company’s best estimate, and he couldn’t guarantee there won’t be further losses in the future.

As noted earlier, the firm has also increased its debt to dangerously high levels that haven’t been seen since the early 2000s–a 130.9 percent debt-to-equity level. And the aforementioned cost overruns caused Moody’s Investors Service to downgrade its rating on preferred stock issued by one of the firm’s subsidiaries to Baa3, just one notch above junk status.

This transpired even as Southern Company announced the need for additional debt and equity issuances over the next two years to pay for its new power infrastructure. That’s a potentially problematic move given the prospect of a rising interest rate environment, and the company’s higher cost of capital as a result of its subsidiary’s downgrade. These are all negative indicators that we’ll address in more detail below.

Fortunately, Southern Company clearly sees the risks inherent in maintaining the status quo. The utility seems to be quickly changing its business model to survive, planning natural gas plants to replace its coal plants (a seemingly tacit acknowledgement of the inevitability of carbon regulation and change in natural gas market fundamentals), while also increasing its involvement in renewable energy and energy efficiency (another tacit acknowledgement of this technology’s disruptive potential).

Further, its move to build an integrated-gasification plant with carbon-capture technology in Mississippi, and new nuclear plants at its Vogtle nuclear facility in Georgia, are also clear signals the firm is focusing on the challenges at hand and trying to change with the times. Other Southern project highlights include the nation’s largest biomass generation plant in Texas, a massive wind-data study to determine the feasibility of wind farms across Alabama and Georgia, and a leading fleet of hydroelectric power generation.

But is this all too little too late? Perhaps due to no fault of its own, the firm undertook a massive build-out, which necessitated gargantuan amounts of debt just as its earnings stream went negative on declining power demand as a result of the downturn in the economy (and cost overruns), new competing technologies, and cheaper natural gas.

Southern Company also faces significant future costs to swap out its overall fleet to cleaner power plants, with 15,648 megawatts of coal-based power plants set to retire in the next decade. While not all of these coal plant wills be replaced, in a recent statement, the firm said, “By 2020, we anticipate being able to generate approximately 35 percent to 55 percent of our electricity from natural gas and 25 percent to 45 percent from coal–enabling our company to minimize costs to customers by utilizing the lowest-cost fuel source.”

While some may regard this as future upside potential, the question is how can the utility accomplish this at current debt levels? The last time Southern Company had a similar debt burden was in the early 2000s, during the merchant-energy collapse and the general downturn that followed the bursting of the Internet bubble. Fortunately, the succeeding economic boom (2003 to 2008) helped the firm repair its balance sheet.

Today, Southern Company faces different obstacles:

1) The continuing recovery from the deepest financial and economic crisis since the Great Depression means US gross domestic product (GDP) and power-demand levels are unlikely to grow as quickly as in the early 2000s, which means Southern Company will get no mercy on paying its debt.

2) The Federal Reserve’s intent to curtail its extraordinary stimulus could mean higher rates are just around the corner. And rising GDP could entail inflation. While inflation will help Southern Company pay down debt, higher rates will make it that much more difficult for the firm to find financing to build the new power plants it needs. And given the regulated nature of the utility, it may encounter difficulty passing along higher commodity costs to customers during an inflationary period.

Additionally, as a rising-rate environment makes fixed-income securities more competitive with dividend stocks, retail investors could turn away from highly indebted companies such as Southern Company in favor of those that offer safer payouts. For instance, the firm’s trailing 12-month payout ratio now stands at 99 percent. That means Southern Company could lose some of its investor base at a time when it needs diverse sources of funding, such as secondary equity issuances. Over the last 12 months, in fact, diluted earnings per share (EPS) have been on the decline at various utilities, including Southern Company, whose diluted EPS has fallen by 22.1 percent.

Chart B: Southern Company’s Visible Slide in Earnings Per Share

Created with YCharts

To get a better sense of Southern Company’s growth prospects, Utility Forecaster developed a proprietary Discount Cash Flow Model to discern how those few Wall Street analysts with “buy” ratings were modeling the company. Most of the growth embedded in their models seems to rely on the utility’s past performance, as well as the management team’s optimistic guidance.

While it’s perfectly natural to extrapolate some elements of past performance to make forecasts about future growth, Wall Street analysts seem to have ignored the firm’s current earnings problems and future power plant development costs. Notwithstanding, the mix of analyst sentiment is essentially neutral, with three “buys,” 15 “holds,” and two “sells.”

High Debt Levels, Lower Income: A Threat to the Dividend

Southern Company has been paying a dividend since 1948, but today its 4.9 percent yield seems at risk. Given its 99 percent payout ratio, there is little room to increase the dividend. And certainly, if the firm incurs larger declines in its earnings, such as more write-downs due to cost overruns, the firm could eventually be forced to cut its dividend.

As many income investors know, the common payout ratio considers dividends as a percentage of net income. That metric usually works when evaluating healthy companies because they tend to use earnings to generate cash for dividend payments. But it can be a misleading ratio when some troubled companies borrow to finance their payout. And companies can’t indefinitely pay dividends that exceed free cash flow.

When firms are in the midst of transforming their business model, as Southern Company is presently doing, the cash dividend payout ratio offers a much more useful tool for evaluating the sustainability of the dividend. This alternative ratio shows the portion of cash flow, after capital expenditures and preferred dividends payments, that a company uses to make its common stock dividend payments. In this case, Southern Company actually has a negative cash dividend payout ratio.

Chart C: The Cash Dividend Payout Ratio

Created with YCharts

And the ratings agencies have been watching. In early August, Moody’s Investors Service downgraded subsidiary Mississippi Power Company’s senior unsecured rating to Baa1 from A3 and its preferred stock rating to Baa3 from Baa2. The rating outlook is stable. The credit rating agency did, however, affirm the parent company’s Baa1 senior unsecured rating, with a stable outlook.

“The downgrade of Mississippi Power’s ratings reflects the higher costs and ongoing difficulties being experienced by the company in completing the large and complex Kemper County integrated gasification combined cycle (IGCC) plant,” said Michael G. Haggarty, senior vice president.

“The utility has exhibited a considerable decline in financial metrics over the course of the construction period, which are unlikely to return to historical levels because of the planned issuance of approximately $700 million of securitized bonds after the plant becomes operational,” added Haggarty.

“The company’s cash flow pre-working capital to debt ratio has fallen from the 20 percent-plus range prior to the plant’s construction to 12.2 percent in 2011 and 13.5 percent in 2012. This compares to financial ratio guidelines of 13 percent to 22 percent for ‘Baa’-rated utilities outlined in Moody’s Regulated Electric and Gas ratings methodology. Although the most recent cost increases are being funded almost solely by equity issuances at the Southern parent company, the higher debt being incurred by Mississippi Power as a result of the plant will result in lower credit metrics going forward, including CFO pre-working capital to debt in the high teens, well below the parameters for a single ‘A’ rating.”

“We believe that issues associated with the plant may have also adversely affected the regulatory environment in which the company operates, with two of the three commissioners on the Mississippi Public Service Commission (MPSC) expressing serious concerns not only about the recent cost increases, but also the level of communication and transparency exhibited by the company during the construction process. Despite a $2.88 billion cap on project costs that largely insulates Mississippi ratepayers from additional cost increases, the historically credit supportive Mississippi regulatory environment has been strained by these developments and may not fully recover over the near term, especially if the plant continues to experience problems with the remaining construction, as well as the testing and start-up phase,” according to Moody’s.

Clearly, a downgrade alone would be an issue for concern. But even more concerning are the firm’s high debt levels and the fact that the regulatory environment (historically extremely supportive) is turning negative, not to mention the firm’s ability to carry out successful future power plant development in response to changing market fundamentals and emissions regulation.

On a Wing and a Prayer: Will the Regulator Gods Help Them?

Historically, Southern Company’s saving grace has been the fact that it operates in a very supportive regulatory environment. Certainly, that’s what investors have always counted on. But as per Moody’s report on the firm’s clean-coal plant in Mississippi, regulators are now taking issue with Southern Company’s handling of the project. And that’s putting into question how prudent the utility has been, a clear sign the winds have changed as to what support the firm can expect from regulators, at least in Mississippi.

In Georgia, the firm has experienced similar cost overruns at its nuclear power plant project. Under a proposed deal with regulators, Southern Company would withdraw its request to increase its budget to build two more nuclear reactors at Plant Vogtle. The company had previously asked to increase its budget by $737 million to $6.85 billion.

Instead, the discussion over whether to formally raise the construction budget would not happen until the first of the two reactors comes online, forecasted around January 2018 at the earliest, as per the latest timelines from a state monitor.

According to one press report, “The deal shifts financial risk onto Southern Company. If the utility exceeds its budget, then the burden would be on Georgia Power to persuade regulators that the excess spending should be passed along to its customers. But if the Public Service Commission votes to raise the project budget, then the law would assume Georgia Power was entitled to collect all of its budgeted costs from customers, so long as regulators couldn’t prove the spending was imprudent, reckless or somehow criminal.”

The preliminary agreement would also help the firm avoid a politically charged battle over project spending while it deals with a separate rate case in Georgia and the aforementioned over-budget coal gasification plant in Mississippi. Georgia regulators are set to vote on the deal Sept. 10.

But given the uncertainty surrounding future cost overruns combined with declining credit and earnings metrics, as well as what appears to be tepid support from regulators, Southern Company warrants additional scrutiny as a long-term investment.

Tuesday, May 27, 2014

Famous Products Invented for the Military

While most people think private enterprise is responsible for innovation, a great deal of the technology Americans rely on comes from another well-known source: the U.S. military.

Over the years, the military, and the private enterprises developing products for the military, have created some of the most important products we use today. Some of the inventions have been less groundbreaking than others, such as Silly Putty and Aviator sunglasses. But some military research also directly led to significant innovations such as the microwave oven and the GPS.

Click here to see the eight famous products

The military contracted out most of these inventions to private companies. One exception is the modern GPS network. It was designed in the 1970s by researchers in both the Navy and Air Force and was built in the late ’70s and ’80s. The technology, initially designed as a guidance and tracking system for planes, boats and missiles, is today used in everything from commercial aircraft to personal navigation systems.

Private companies developed most of the products on this list, often answering the military’s call during wartime. During World War II, a Johnson & Johnson division created what would eventually become duct tape, originally to seal containers and quickly repair equipment in the field. The Jeep was an all-terrain scout vehicle built by a company called Willy's-Overland. The Jeep was widely used by the military in World War II and the Korean War and eventually also became a very popular domestic auto brand.

In many cases, the final use of the product completely differs from its intended military function. What eventually became feminine hygiene products under the Kotex brand was originally medical gauze developed for the military during World War I. Silly Putty was invented as a possible substitute for rubber. While it failed in this regard, it became a popular toy.

The military also played a part in developing even greater technologies. ARPANET, considered by many to be a precursor to the modern Internet, was a military program designed to share documents securely between facilities. In the 1940s and ’50s, the military even played a role in the development of the modern computer.

24/7 Wall St. reviewed products that were either developed for military use by the military or contractors, or those which were created as the result of military research. We excluded products where the military or contractors only played a part in the development of the product, as was the case with the computer.

These are the famous products invented for the military.