Q: I'm thinking of selling my SHLD ETF for a more concentrated defence/areospace tilt and buying either RYCEY (Rolls Royce) or HWM? the beta of HWM concerns me though?
What do you advise? I already own GE.
What do you advise? I already own GE.
5i Research Answer:
We think both names are fine for defense exposure but we would probably prefer HWM. Earnings growth is a bit better at HWM and it is domiciled in the US so might have a bit of a better chance at capturing US budget spending compared to Rolls. As noted, it is a bit smaller and more volatile, however.