“Penny Defense Stocks” teased by The Casey Report

Which smaller contractors are being hinted at by E.B. Tucker as the foundation for the next wave of giant military contractors?

“These 4 “Penny Defense Stocks” Are Primed to Soar on… The Pentagon’s Trillion-Dollar Spending Jackpot”

That’s the promise made by the new ads for E.B. Tucker’s Casey Report, which is pitching the stocks that they think will become the “new ‘Military Industrial Complex'” as they grow from small-cap size to compete with the megacaps like Lockheed Martin and Boeing.

So what are the stocks? Well, the temptation to riches that they dangle is intended to get you to subscribe to their newsletter, at $149 a year. Maybe you’ll like it, maybe you won’t… but let’s go through the clues they drop, see if we can ID those stocks for you, and then you can make a decision about the newsletter (and about those stocks) without the lure of mystery and secrecy swaying your thoughts.

The basic idea is that some of these little stocks will soar because of massive increases in military spending, creating returns like the crazy 55,000% returns that early investors made in Electric Boat (now General Dynamics) during World War II. I don’t know what specific time frame they’re using, but the giant defense contractors have generally all done quite well in the more recent past, too — General Dynamics is again among the best, with a 1,700% gain since the mid-90s, but even relative slowpoke Raytheon is up 400% during that time period, roughly matching the S&P 500, and Boeing and Lockheed both beat the market handily over those 20+ years.

Here’s how Tucker puts it:

“… they’re on the cusp of becoming the new “Military Industrial Complex.”

“The future Boeings, Raytheons, and Lockheeds.

“… we’re on the verge of major explosive military developments, including…

“Catalyst #1: NATO’s $100 Billion Spending Boom

“Catalyst #2: The $500 Billion Global Space Wars

“Catalyst #3: America’s Trillion-Dollar Nuclear Upgrade

“Catalyst #4: The Thousand-Ship Naval Fleet Buildup”

A lot of that is based on expectations for what President Trump will do to the defense budget, since he has come out of the gate with a big push to increase defense spending — I have no idea how that will play once Congress starts looking at the budget, but presumably there will be winners and losers.

What, then, are the small cap stocks that Tucker thinks will be winners?

Well, before we get there, probably the most interesting point made in the ad is that the Feds are being pushed to use smaller contractors with more efficient high-tech products over the traditional over-engineered or high-cost products from the big defense contractors — and that this is being pushed because of a legal ruling last Fall. Here’s how he hints at that:

“You see, just one week before the election, a federal court passed a historic ruling.

“A legal ruling that could put BILLIONS in cash into the accounts of very small military tech companies…

“And enrich investors who scoop up their shares before the Pentagon budget deadline, on June 30.”

And then he goes into more detail — apparently Palantir, the big data firm cofounded by Silicon Valley billionaire VC guy (and Trump advisor) Peter Thiel, lost out to a more expensive and lower quality product fro