Defense Replenishment
Nidhal Selmi@nselmi
+1.5%
since Oct 6
The idea
I believe depleted missile and interceptor stockpiles plus funded multiyear procurement add up to a replenishment cycle that lasts several years, not a one-off spike. This take owns the primes building that capacity alongside verified suppliers across propulsion, guidance, sensors, controls, and specialty materials, spread across names rather than concentrated in one. It holds a cash cushion and is built to be held for years, not traded around headlines. I would rethink it if orders stay unfunded, contract margins erode, deliveries slip, or expansion costs outpace cash generation.
What it owns
- The companies building the missiles and interceptors being reordered under funded multiyear contracts. · Lockheed MartinIt builds PAC-3 interceptors and JASSM missiles, two of the most depleted and most funded lines in the replenishment cycle., RTX CorporationIt makes Patriot and the Standard Missile family, the interceptors being fired and reordered fastest., Northrop GrummanIt builds missiles and owns solid rocket motor capacity, one of the tightest production inputs in the whole cycle., General DynamicsIt is ramping munitions volume, including artillery and missile components, directly against depleted inventories.35%
- Actuation, steering and flight-critical hardware that primes cannot ramp without, often sole-sourced. · Curtiss-WrightIt supplies embedded computing and precision hardware across missile and naval weapons programs., Moog Inc.It builds the actuation that steers missiles in flight, content on nearly every interceptor being reordered., HEICO CorporationIts defense electronics businesses supply components across missile and interceptor programs with a record of protecting margins., DucommunIt builds missile structures and assemblies for the primes with meaningful program content on interceptor production.19%
- Every missile needs seekers, processors and sensors, and these suppliers sit in the critical path of ramping programs. · Leonardo DRSIt supplies sensing and force protection systems with meaningful program content on missile defense and interceptor programs., Teledyne TechnologiesIt supplies seekers and imaging sensors that go into guided missiles and interceptors, so higher production lifts its content., Mercury SystemsIt makes the processing electronics inside missiles and radars, pure production-input content on the replenishment theme.15%
- Solid rocket motors are the tightest bottleneck in missile production, so capacity owners gain pricing power. · L3Harris TechnologiesIt owns Aerojet Rocketdyne, the propulsion supplier nearly every missile prime depends on, making it the bottleneck in this replenishment story., Kratos Defense & SecurityIt is building new solid rocket motor capacity to relieve the propulsion shortage limiting missile production.13%
- High-temperature alloys and aerostructure metals feed the whole production ramp from the bottom of the supply chain. · Carpenter TechnologyIt supplies specialty steels and alloys that are a known bottleneck for defense production in this replenishment cycle., ATI Inc.It makes the high-temperature alloys that missile and propulsion production cannot skip, raw material for the whole ramp.8%
- Cash10%