When you watch your kids playing war games on their computers, it must have occurred to you at some point that this might all be part of some grand scheme to get the next generation well-versed in a new set of skills. Hand-to-hand combat (except with their siblings) is out and unmanned aerial vehicles, or UAVs are in.
The AP (7/20) reported that Raytheon Company (NYSE: RTN) recently unveiled "its new control system for unmanned aerial vehicles, or UAVs." Raytheon's "Universal Control System,...uses some hardware from the gaming world," and is expected to "shorten training time and help prevent crashes of expensive unmanned drone aircraft by providing a more interactive experience for the pilot." The company focused on "making the system more intuitive -- replacing keystrokes with a game console -- after consulting with experts and discovering that thumbs are the most energy-efficient and accurate way to control an aircraft."
Given Iran's recent missile tests and all the saber rattling that goes on around the world, it should be no surprise that governments have been seeking Raytheon's Patriot Missile technology for years, but RTN is also a leader in a wide range of radar systems, guidance systems, airport monitoring and control systems, and of course the latest in UAV technology.
Raytheon was one of my Chasing Value picks this year and the fact that is down makes me think it is even more of a value today. I first highlighted the stock last December at a price of $61.51. It opened this morning at $56.28 down 8.5%.
While you would be losing money had you bought in earlier, you would still be ahead of the market which has lost twice that amount. This is why I have been supportive of most of the defense sector for the last two years. My previous post on the topic was Chasing Value: General Dynamics & Raytheon: The defense does not rest.
I have mentioned many times that some companies are perceived in a misguided way (pun intended) and Raytheon is one of them. Raytheon is clearly a major player in the defense sector, however, I would argue it is a bigger player in the technology sector. Even if defense stocks sag under a new administration and tighter defense spending, the outlook for aviation, airport expansion and infrastructure will remain.
Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I do not own shares of RTN at this time.
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Reader Comments (Page 1 of 1)
7-21-2008 @ 8:53PM
william lindblad said...
Sixty years ago one of the valued skills at entry level military was typist. Today they look for more, but the keyboard remains. Since this is something that I have owned I can agree - it's tech oriented. Everything they do is not military.