I am a Fool.
I know this not just because the name on our website tells me so -- but because of the audacity of what I intend to accomplish today. I intend to pick a portfolio of stocks, all drawn from a single industry, which will beat the market. And not just beat it, but crush it.
Why is this Foolish? Because everyone knows that you can't beat the market. (Despite the fact that The Motley Fool has been doing just for seven years and counting.) Everyone knows, too, that your best chance of even tying the market lies in broad diversification -- the best example being buying an index fund.
Balderdash
Fortunately, we make a habit of disproving conventional wisdom here at the Fool. So today, I'm setting out to prove it can be done. Having recently surveyed the defense industry's best large-cap stocks (yes, and its best small-cap stocks, too), I hereby challenge Mr. Market to a duel. My best half-dozen defense ideas versus whatever the S&P 500 can throw at me.
My team
My team consists of small army of small- and large-cap defense names, each having two things in common: First, each company occupies the sweet spot of one or more crucial niches within the defense industry. Second, each company's stock trades at a discount to its intrinsic value.
Some of 'em you've heard of; others, perhaps not, so after telling you who's going into the portfolio, I'll give you a quick rundown of each -- and why they make the cut:
Company
Starting Price*
Recent Price
Total Return
General Dynamics (NYSE: GD)
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Raytheon (NYSE: RTN)
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Lockheed Martin (NYSE: LMT)
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AeroVironment (Nasdaq: AVAV)
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iRobot (Nasdaq: IRBT)
- Continued... |