Posted by: Aaron Pressman on August 10, 2006
The so-called 9/11 portfolio, stocks of companies that provide security and defense products, got a giant boost today with news of a new terror plot broken up in Britain. Don’t be tempted. In the past, these terror event spikes have proven unreliable fuel for the stocks rise, so be forewarned.
Stocks up 5% to 10% or more today include:
American Science & Engineering (Symbol: ASEI), which makes x-ray inspection and screening gear.
SYNERGX Systems (SYNX), maker of fire alarm and security systems.
Digital Recorders (TBUS), provider of surveillance systems for law enforcement.
Flight Safety Technologies (FLT), which makes systems to protect aircraft.
Larger cap defense stocks are up only slightly and the PowerShares Aerospace & Defense (PPA) ETF is up just 0.7%. It’s dominated by big caps like Boeing (BA) and Lockheed Martin (LMT). Over the past year, the SPADE Defense Index underlying the fund is up just 2% and has not worked well as a proxy for playing the homeland security theme.