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As U.S.-based markets moved in a positive manner after housing prices in 19 of 20 major cities increased between April and May, these three defense-oriented companies have caught my caught my eye for various reasons. They have each demonstrated very positive near-term potential, and if they can continue to demonstrate a presence in their specific sector could very well be good long-term plays as well.

Raytheon (NYSE:RTN) - RTN, which trades in a 52-week range of $38.35 (52-week low) and $55.13 (52-week high), closed trading at a $54.21/share on Monday. Shares were flat during trading on Tuesday, as Stifel Nicolaus, noted that the sector had reached a bottom and the second half of the year could be very positive for several names within the industry. That being said, Stifel reiterated its $63/share price target and also thought the company's 3.6% ($2.00) yield was a bit too low. I happen to like RTN for two reasons at these levels. First, the company is very attractive trading at P/E ratio of 9.94 and yielding 3.6%. Second, the last four quarters have surpassed street estimates, and if the company can continue to demonstrate positive earnings growth, the stock could very well surpass the $63/share price target. Potential investors looking to establish a position in RTN should do so with a medium sized one and add to that position as we approach both earnings and dividend dates.

Lockheed Martin (NYSE:LMT) - LMT, which trades in a 52-week range of $66.36 (52-week low) and $92.24 (52-week high), closed trading at a $84.25/share on Monday. Shares were down nearly 1.1% during trading on Tuesday, as it was noted by Fox Business News, that the reduction in government defense spending could result in massive job cuts for the industry as a whole. In the case of LMT, the number of job cuts could top 120,000, which is a substantial number of the company's current workforce. That being said, I don't think investors should sell on the news, as I think they should actually add to their positions. The company is very attractive in terms of the yield of 4.7% ($4.00) and P/E ratio of 9.94, not to mention contracts are still being awarded and LMT has demonstrated some very nice EPS growth over the last four quarters surpassing estimates by an average of 12.5%. Potential investors looking to establish a position in LMT should do so with a small- to medium-sized one and add to that position as we approach both earnings and dividend dates.

Northrop Grumman (NYSE:NOC) - NOC, which trades in a 52-week range of $49.20 (52-week low) and $70.61 (52-week high), closed trading at a $61.48/share on Monday. Shares were down nearly 0.6% during trading on Tuesday, as not only did Stifel Nicolaus reiterate a positive outlook on the industry as a whole, but the company was awarding a significant contract to integrate secure high-speed communications for the U.S. Navy's E-6B Mercury Aircraft. The contract is valued at $44.3 million and will also result in a second contract that will enhance the entire fleet of E-6B aircraft. The company is very attractive in terms of its yield of 3.5% ($2.20) and P/E ratio of 7.9%, not to mention it has demonstrated some very nice EPS growth over the last four quarters surpassing estimates by an average of 16.7%. Potential investors looking to establish a position in NOC should do so with a small- to medium-sized one and add to that position as we approach both earnings and dividend dates.

Source: 3 Defense Companies That I Think Look Attractive At These Levels