Latest news with #KevinMahn
Yahoo
2 days ago
- Business
- Yahoo
RTX can get 'lion's share' of defense spending boosts: Strategist
In the latest installment of Yahoo Finance's Good Buy or Goodbye, Market Domination host Julie Hyman invites on Hennion & Walsh CIO Kevin Mahn to hear his perspective on the defense sector, explaining his bullish call on RTX Corporation (RTX) over its competitive advantage in missile defense systems and why he thinks investors should avoid Vertical Aerospace (EVTL). To watch more expert insights and analysis on the latest market action, check out more Market Domination here. Don't forget to catch up on Good Buy or Goodbye. It's a big noisy universe of stocks out there. Welcome to goodbye or goodbye. Our goal to help cut through that noise to navigate the best moves for your portfolio. Today, we're diving into the aerospace and defense sector. I'm back here with Kevin Mann, Henning and Walsh CIO. Uh Kevin, thanks for sticking around as we talked about you like the defense sector, that much we know. And specifically, there's a stock you like in it and that is RTX. Yes, used to be known as Raytheon. Now, is known as RTX after some sort of restructuring. The stock is up some 30%. It's actually trading near a record. It's off that a little bit today, but pretty close to that record level still. So, within RTX, you still have Raytheon as a big part of it. So, talk to us about that. Yes. Correct. Yes. So, there's three different segments to RTX. One is Collins Aerospace, two is Pratt and Whitney, and three, of course, is Raytheon, the most appealing from an investment perspective. Why? Because they design and they manufacture air and missile defense systems. Think of the Iron Dome, similar to what Israel has and similar to what the Trump administration wants to build here. We believe they'll be a benefactor of all this increased defense spending with the US planning to spend up to a trillion dollars on defense in the upcoming budget, and we think RTX will will get a lion share of that money. Well, it sounds like you're not the only one who thinks this because the stock is like, I just pointed out, the stock has done very well over the past year and is near a record. So, do you think there is a momentum aspect to this? Absolutely. I think a large part of that goes with the defense spending outlays. What they're trying to build with the Iron Dome, and also this sector as a whole. You look at the number one performing sector in 2025, it's industrials. Guess where aerospace and defense falls under? Industrials. And that's what's driving it up. And there's other defense contractors that are going to benefit it as well, but I think RTX is particularly attractive. And then let's talk about some of the numbers around stock. The valuation 22.9 times four p, little little high, but it does pay a dividend of what is it? 1.9%. Yep. It does. Nearly 2%. So, you know, you get you get something for paying up for it. Absolutely. There's a lot of defense names right now that are trading at very high multiples. This is relatively in line with the S&P 500 from a current P perspective. And you get a dividend yield of nearly 2%, and the stock's up over 20% year to date, and there's likely to be more defense spending coming their way. I think investors should consider them. So let's, you know, we always like to we always like to look at what a potential risk is. In this case, you know, obviously, the bill is now being debated. We could see tweaks, we could see changes. How big of a risk do you think that is? I think it's a small risk, but it is a risk. And then going forward, yes, if we get the defense budget increased to 1 trillion for this year, does it stay at those levels or do they pair back and does RTX still benefit in future years? Uh the other thing I wanted to ask you about is competition here because we have had this sort of push within the federal government to be more efficient, to be more sort of tech tech forward, right? And you see some of the tech, some of the defense startups getting more attention. But do they compete sort of directly with RTX? How do they sort of all fit together? I would say what Raytheon has in terms of air and missile defense system is far and above beyond their competitors right now. That's right now. But there's other defense contractors that are very similar. Take Lockheed Martin, the manufacturer of the F-35 fighter jet, but they didn't win the contract for the new F-47, Boeing did. So, there's a lot of competition in this space right now as they try and build, make us safer, but do it much more efficiently and with less cost. Well, speaking of sort of startups within the aerospace realm, that's takes us to our goodbye, the stock that you're avoiding, Vertical Aerospace, EVTL is the ticker, which sort of stands for EVTOL, electric vehicle takeoff, vertical takeoff and landing here. So it's the sort of electric sort of more helicopter-like aircraft that we've talked about. The stock, as you can see here, is down over the past year. It's about 18%. So why don't you like this one? Never a good sign. They're not an approved defense contractor to the US Department of Defense, electric aviation right now. It may be the future, but it's not the present, and there's a lot of competition in this space. And as you'll see in the next two areas, they're burning through cash right now. The stock's down 52% year to date. It's not a good story right now, and I hope it turns for this company. Well, if it's not a defense play, could it eventually be a commercial play? Certainly could, but they have to become profitable first. They have to actually start signing some large commercial contracts, and then they have to actually have this technology, this new groundbreaking technology work. Um, and then if you look at how this stock has done, it's the opposite of the upward momentum that we saw with RTX. This stock, I mentioned, it's down 18% over the past 12 months. It's down a lot more just year to date. Absolutely. Just year to date, it's down over 50%. And what we saw with their first, or their their end of 2024 earnings, they lost a significant amount of money. You look at the forecast for Q2, they're expected to lose once again, about 43 cents per share on earnings. That's not a good sign for a company that's trying to become profitable. Yeah, as you say, they're not signing those contracts yet. So, I guess it goes without saying, they don't pay a dividend because they're not bringing anything in the door. They certainly pay the dividend. Weak balance sheet, not paying a dividend. It's it's hard to find anything to like with this stock right now. With the company and the idea and the concept makes a lot of sense, but they need to shore up their balance sheet. That's just so what could go right here, it could work out, right? So, as you mentioned, there are a number of companies that are attempting to do this. There's Vertical, there's the likes of Archer Aviation and Joby that are all sort of jockeying to be the first, you know, really dominate the company in this space, but they haven't got none of them have really gotten there yet, and maybe this one might be in third. I don't know. Yes. Yes. Possibly. I mean, we're in desperate need of alternative power solutions in aviation, in automotion, and across, I'd say, defense contracting, and even in AI. The concept makes sense to me. There's a lot of competition right now. They're burning through cash. The stock's down 52%. They're not forecasted to grow in their earnings. And then I looked at the outtakes of their Q1 earnings reports, and they said they had enough cash on hand to last through 2025. Sounds comforting, but there's only six more months left in 2025. So hopefully it turns around. I don't see them being a recognized defense contractor. Maybe they'll sign a large contract on the commercial side, and this will start to perform again, but not yet. Well, you don't own this one. I think it is fair to say you guys do own RTX. I do not. We do own RTX. Yes. All right. Sign in to access your portfolio
Yahoo
2 days ago
- Business
- Yahoo
RTX can get 'lion's share' of defense spending boosts: Strategist
In the latest installment of Yahoo Finance's Good Buy or Goodbye, Market Domination host Julie Hyman invites on Hennion & Walsh CIO Kevin Mahn to hear his perspective on the defense sector, explaining his bullish call on RTX Corporation (RTX) over its competitive advantage in missile defense systems and why he thinks investors should avoid Vertical Aerospace (EVTL). To watch more expert insights and analysis on the latest market action, check out more Market Domination here. Don't forget to catch up on Good Buy or Goodbye. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
CNBC
2 days ago
- Business
- CNBC
What to make of Apple's developers conference and a potential winner from U.S.-China trade talks
(This is a wrap-up of the key money moving discussions on CNBC's "Worldwide Exchange" exclusive for PRO subscribers. Worldwide Exchange airs at 5 a.m. ET each day.) Investors are looking for opportunities in defense stocks. They also search for opportunities in China, as trade talks with the U.S. continue. Worldwide Exchange pick: RTX Kevin Mahn of Hennion & Walsh Asset Management said RTX is his top pick in the aerospace and defense sector. "Last year we saw nearly a10% increase to defense spending across the globe, to $2.7 trillion the largest annual increase since the Cold War," Mahn said. "RTX operates out of three segments: Collins Aerospace, Pratt and Whitney and Raytheon. Raytheon is the most attractive from an investment standpoint, they produce and distribute air defense systems think the 'Iron Dome'," said Walsh. Bank of America released research Tuesday estimating an additional $370 billion of spending in 2025 if all members of NATO spending 3.5% of 2024 GDP on defense. Worldwide Exchange pick: Alibaba Kevin Carter of the EMQQ Global believes Alibaba will see the biggest benefit from U.S.-China trade talks out of all the Chinese companies, partly because of its U.S. listing. "The tariffs themselves aren't going to change much in the Alibaba world, but it's China going from un-investable to investable again. … The vast majority of investors, they've been scared of China for different reasons. But I think you have a lot of room for multiple expansion if fear about the US-China relationship gets put aside," Carter said to CNBC. He added: "The state of the Chinese consumer is important, and so to the extent that the Chinese consumer does better because of a trade deal or feels more comfortable spending because of a trade deal they'll benefit that way too." Alibaba missed revenue and earnings expectations when it reported in May. A major factor was softening consumer sentiment in China . MoffettNathanson on Apple and WWDC Clay Griffin of MoffettNathanson maintained his $141 price target and sell rating on Apple after the company's WorldWide Developers Conference, where he believes the iPhone maker met low expectations related to announcements or AI developments. Griffin emphasizes that Apple is still facing a number of headwinds he describes as "death by a thousand paper cuts." "The tariffs, the response from China, Apple's position in China. … The App store ruling in the Epic case, the Digital Markets Act in Europe. There is a parade of not existential threats by any means, but meaningful risk to Apple's business," said Griffin. According to FactSet, the consensus price target for Apple is $228 with an overweight rating. Market implications for CPI Kevin Simpson of Capital Wealth Planning said the CPI report on Wednesday is the biggest market event of the week, even with U.S.-China trade talks. "We saw the jobs report last week on Friday, which was terrific. If you can get this inflation number closer to their 2% target that is going to give them the ability to cut rates later this year for the right reason not because they are trying to re-stimulate growth but because they are really too restrictive," Simpson said. Simpson added a US-China deal still has market implications especially if their can be a final agreement on a reduction to tariffs. "Even if we are at 10% tariffs which it seems like the market is expecting and the consensus is we can tolerate that … I look at tariffs being inflationary, even it's temporary inflation… that's not great for the market."
Yahoo
02-04-2025
- Business
- Yahoo
Job cuts, inflation, and lowered GDP forecast is a recipe for stagflation, asset manager says
Kevin Mahn, president and CIO of Hennion & Walsh Asset Management, spoke with NYSE (ICE) TV for a special video interview. Watch the interview above and check out the transcript below, which has been lightly edited for length and clarity. KRISTEN SCHOLER: Joining me now in the studio is Kevin Mahn, president and chief investment officer at Hennion and Walsh Asset Management. Kevin, always good to have you, and especially here as we start this second quarter together. KEVIN MAHN: Yes, happy April Fool's Day. KS: Happy April Fool's Day as well. I know you always come with the facts. So give us the facts here as we start the second quarter. Kevin, where do we stand in the markets? KM: Yeah. I think a lot of investors will be happy to see that March is now behind us and the first quarter is now behind us, as the stock market experienced its worst March and its worst first quarter since 2022. However, I think there are four things that could happen, Kristen, in the second quarter that could help allow for a strong second half of the year. First and foremost, tariffs. We're going to have more certainty, at least around what the tariffs will be so that we can plan and adjust our portfolios accordingly. Perhaps the reciprocal tariffs won't be as reciprocal as we earlier thought that would be a tailwind for the markets. If the Federal Reserve does cut interest rates for the first time during the second quarter by 25 basis points, that would be a tailwind for the markets. If the tax cuts get extended during the second quarter, that would be a tailwind for the markets. And of course, the more and more announcements we hear about increases in defense spending and increases in AI infrastructure spending are tailwinds for the markets as well. So I know this volatility is hard to deal with, but try not to time the market. Stay invested true to your risk tolerance. Adjust your portfolios accordingly and be rest assured that the markets will come back. And when they do, they tend to bounce back just as strongly as they move downward. KS: So in this environment, Kevin, certainly it sounds like a buy and hold perhaps is what you're recommending to your clients. But for viewers who are watching and looking at the volatility that we've seen, at least to start the year, is there any sort of reallocating that you might suggest amid some of the sector rotation? KM: Sure. I would say hold and adjust, because numerous studies show that timing in the market is an exercise in futility. But if you could look into those areas of the market that are benefiting right now, value is significantly outperforming growth. International is outperforming U.S. Defense stocks, industrials, utilities. How about utility stocks? They pay a good dividend. They hold up well in the face of volatility, and they are a backdoor play into the AI revolution. That's a sector you might wanna look at. And of course, bonds. Bonds can provide you with that principle protection when you hold them to maturity and a good steady stream of income. And they're also pretty, volatility-wise, strong as well. KS: I do want to talk about the Fed and the path forward for interest rates because we had heard from Fed chair Jerome Powell toward the end of the first quarter that yes, he sees more uncertainty and, you alluded to it, the market does not like uncertainty. It wants clarity. But the Fed did hold pat on his interest rate stance, seeing two cuts this year. In the past week, several guests have come on the show and they actually think rates might rise this year due to inflation. Give us a better sense as to what makes up your particular outlook on rates. KM: The only thing that's certain right now is that there is more uncertainty ahead, but Chairman Powell did reiterate that he stands ready to step in if the economy deteriorates further or the job market worsens. They still have two rate cuts forecast for this year. However, they also increased their outlook for inflation, they increased their outlook for unemployment, and they lowered their forecast for GDP. Put that all together, that's a recipe for potential stagflation. But I do think the Fed continues to cut rates this year on a more gradual pace because they're more concerned about an economic slowdown potentially becoming a recession than they are with inflation staying above their target 2%. KS: We had heard the Fed share use that word 'transitory' again. KM: Again, it's back! It's back! Maybe these inflationary pressures related to tariffs are indeed transitory, but we'll learn more about these tariffs tomorrow. KS: Now, of course, the jobs report is due out on Friday. We've seen a wave of layoffs, at least just focusing on the federal government with DOGE, tens of thousands of them, if not more, at this point. What does that mean for the jobs report? KM: Well, the Fed updated their forecast for unemployment this year to end the year at about 4.4%, and they think it will come down slightly next year to about 4.3%. Now, from a historical standpoint, that's not very high, but from where we are right now, that means hundreds of thousands of other Americans are gonna be out of work. That's a concern because Americans who are out of work don't tend to spend as much as Americans who do work, and 70% of our economic growth comes from consumer spending, so it's something to pay a close attention to. KS: Next week, earnings season will start to kick off. Delta (DAL) among the first companies to report should give us a good sense as to the health of the consumer when it comes to discretionary travel spend. Any expectations there? KM: As it stands right now, if you look at FactSet (FDS), they're forecasting 7%-plus year-over-year earnings growth. That would mark the seventh consecutive quarter of year-over-year earnings growth. I think that will come down a little bit, but if we can continue to have companies grow their earnings amidst this stock market pullback, that creates some pretty attractive entry points. The Mag Seven itself is currently trading at 25 times current earnings. That's the lowest it's been since the end of 2022. There are investment opportunities out there to consider as a result of the pullback we've seen. KS: I also want ask about international stocks because we knew, or at least it was broadcast, when President Donald Trump took office for a second term: American exceptionalism. In some ways, that's sort of replaced MAGA, obviously. He's always, you know, catered to the MAGA base. It helps him get elected. But American exceptionalism, as we see international stocks outperform. How should a viewer look at that? Should they remain true to American exceptionalism, if that's the ideology that they've adopted? Or should they be open to international investments? KM: I think what we've seen so far in 2025 is a reminder to investors about the potential benefits of diversifying your portfolio geographically. International developed markets have significantly outperformed the rest of the world. Even emerging markets have outperformed the U.S. to date, but we're still overweight U.S. A lot of this transition period is creating this uncertainty, creating this volatility, but ultimately, I think the U.S. comes out stronger as a result. So that doesn't necessarily mean you abandon U.S. stocks because international's outperforming, but you should consider adding them to a geographically balanced portfolio. KS: Bitcoin. We're gonna end with a Bitcoin question, Kevin. What are your thoughts? KM: Yeah, my thoughts are, I still don't understand it. I don't understand why it moves higher or lower on a given day. I understand the Trump administration is behind cryptocurrencies and behind Bitcoin. But I think there are better opportunities in the market on a risk-adjusted basis than Bitcoin. But I still like the underlying technology that it's built on, that being blockchain. For the latest news, Facebook, Twitter and Instagram. Sign in to access your portfolio
Yahoo
06-02-2025
- Business
- Yahoo
US stocks end higher as investors digest earnings
STORY: Wall Street's main indexes closed higher on Wednesday as investors brushed off disappointing earnings from Alphabet and weighed the prospect of future interest rate cuts from the Federal Reserve. The Dow gained about seven-tenths of a percent, the S&P 500 added about four-tenths and the Nasdaq ticked up roughly two-tenths of a percent. Google-parent Alphabet dropped about 7% a day after posting downbeat cloud revenue growth and earmarking a higher-than-expected $75 billion investment in AI this year. Alphabet's results came after Chinese startup DeepSeek last week rocked shares of rival AI companies, such as Nvidia, after it launched what it claimed to be a low-cost AI model. Kevin Mahn is chief investment officer at Hennion & Walsh Asset Management. 'Clearly, investors are beginning to now question the overall health of the AI revolution and whether or not all of the spending that's taking place as it relates to AI infrastructure is warranted given the purported success of DeepSeek, as we learned just over a week ago. I would argue, however, that the bigger risk is not investing into AI, because the longer that you wait, the more likely your competitors are going to invest in AI, and that's going to move them forward significantly.' In other tech news, shares of Advanced Micro Devices fell after the chipmaker's CEO said current-quarter data center sales - a proxy for its AI revenue - would drop about 7% from the previous quarter. Apple shares ended slightly lower after Bloomberg News reported that China's antitrust regulator was preparing for a possible investigation into the iPhone maker. And shares of Uber dropped more than 7.5% after the ride-hailing firm forecast current-quarter bookings below estimates. On the data front, the Institute for Supply Management said services sector activity unexpectedly slowed in January amid cooling demand. Investors now look to Friday's nonfarm payrolls report for January for further clues on Fed policy, with a majority of traders expecting this year's first interest rate cut to come in June. Sign in to access your portfolio
