Babcock International: A Reasonable European Defense Play
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Valkyrie Trading SocietyInvesting Group LeaderFollow5ShareSavePlay(12min)CommentsSummaryThe Type 31 programme will still be weighing on results this year but there is a light at the end of the tunnel for this contract to start liquidating profitably.In general, better bidding processes is reflecting in the upward lift of margins.Surge orders from last year are being delivered nicely this year supporting defense revenue growth across segments, though some standout civil performances exist too.Margin should continue to improve, and the growing ideological gulf at the moment between the US and Europe on many issues, including defense, gives preference to European defense picks as Europe ramps spending.However, valuation on a relative basis is nothing to write home about, and in general this sector of the market looks thoroughly sifted and valued based on industrial scaling ability and exposure. imaginima/E+ via Getty Images Babcock International Group PLC (BCKIF) is not a bad way to play European defense, but it's not relatively undervalued. It is more a bet on the general trend, which is that at least for the time beingThis article was written byValkyrie Trading Society5.41K FollowersFollowThe Valkyrie Trading Society is a team of analysts sharing high conviction and obscure developed market ideas that are downside limited and likely to generate non-correlated and outsized returns in the context of the current economic environment and forces. They are long-only investors.They lead the investing group The Value Lab where they offer members a portfolio with real time updates, chat to answer questions 24/7, regular global market news reports, feedback on member stock ideas, new trades monthly, quarterly earnings write-ups, and daily macro opinions.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 (other than from Seeking Alpha). 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 as to whether any investment is suitable for a particular investor. Any views or opinions expressed above 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. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.Recommended For You