Top Defensive Stocks For Turbulent Times

Nov. 01, 2023 5:00 AM ET22 Comments

Summary

  • We are in a world of wars. Currently, there are 32 major conflicts and thousands of armed battles, prompting investors to gravitate toward defensive stocks.
  • World military spending grew to an all-time high of $2240 billion in 2022 for the eighth consecutive year. Military expenditures are increasing, resulting in over $886 billion in U.S. defense.
  • As a result, investors are searching for safe haven industries and a hedge for their portfolios. Defensive stocks were among the top five gainers in October.
  • Historically, defensive stocks are a bastion of security during major global conflicts. Currently, some of the largest defense stocks like Boeing, RTX, Lockheed, and Northrop are overvalued on a sector-relative basis.
  • Using SA’s screening tool, I have identified four Quant Strong Buys and one Quant Buy-rated stock from the defensive sector that are still strong despite the sector run-up.

Business Trends Graphs and charts. To the moon

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Geopolitical conflicts sweep the globe, prompting investors to flock to defensive stocks. Hamas’ attack on Israel, the persisting war in Ukraine, depleting resources, supply chain constraints, and the pain of inflation are disrupting economies and increasing global insecurity. Investor fear is rising, but as Citibank affirms, defensive stocks are

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Steven Cress is VP of Quantitative Strategy and Market Data at Seeking Alpha. Steve is also the creator of the platform’s quantitative stock rating system and many of the analytical tools on Seeking Alpha. His contributions form the cornerstone of the Seeking Alpha Quant Rating system, designed to interpret data for investors and offer insights on investment directions, thereby saving valuable time for users. He is also the Founder and Co-Manager of Alpha Picks, a systematic stock recommendation tool designed to help long-term investors create a best-in-class portfolio.

Steve is passionate and dedicated to removing emotional biases from investment decisions. Utilizing a data-driven approach, he leverages sophisticated algorithms and technologies to simplify complex, laborious investment research, creating an easy-to-follow, daily updated grading system for stock trading recommendations.

Steve was previously the Founder and CEO of CressCap Investment Research until its acquisition by Seeking Alpha in 2018 for its unparalleled quant analysis and market data capabilities. Prior to that, he had also founded the quant hedge fund Cress Capital Management, after spending most of his career running a proprietary trading desk at Morgan Stanley and leading international business development at Northern Trust.

With over 30 years of experience in equity research, quantitative strategies, and portfolio management, Steve is well-positioned to speak on a wide range of investment topics.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given that any particular security, portfolio, transaction or investment strategy is suitable for any specific person. The author is not advising you personally concerning the nature, potential, value or suitability of any particular security or other matter. You alone are solely responsible for determining whether any investment, security or strategy, or any product or service, is appropriate or suitable for you based on your investment objectives and personal and financial situation. Steven Cress is the Head of Quantitative Strategy at Seeking Alpha. Any views or opinions expressed herein may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank.

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