Daily Stock Market Report (Mon 3 Mar 2025) - Defence Stocks, ZTF, SFR, RFX, AVON, KGH, HTG, QTX

3rd Mar by Graham Neary

84 comments 6495 reads

Good morning and welcome back - today's Agenda is now complete.

Defence stocks

Thanks to Howard Adams in the comments for pointing out the strength of European defence stocks this morning.

A sub-index that’s available on Stockopedia is the FTSE Eurofirst 300 Aerospace & Defense Index. It has performed amazingly well in recent years and is up by nearly 7% this morning alone.

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The difficult meeting between President Trump and Ukraine’s Zelenskyy on Friday was followed up with a weekend of diplomacy in London. Britain and France will shortly present a new peace plan to the United States that envisages European peacekeeping troops in the Ukraine.

When it comes to the financial implications of these developments, we have the following snippet from The Times last night:

Macron also said that European countries should raise their defence spending to between 3 and 3.5 per cent of gross domestic product. Earlier in the day, Mark Rutte, the Nato secretary-general, said “more European countries will ramp up defence spending” but did not go into specifics

The UK’s defence budget is heading for 2.5% of GDP by 2027, with an ambition for it to reach 3% in the next parliament.

On Saturday, the government announced a £2.26bn loan to bolster Ukrainian military capability. This loan will be “fully earmarked for military procurement”.

This morning we’ve seen the following movements:

BAE Systems (LON:BA.) up 15%
Qinetiq (LON:QQ.) up 9%
Chemring (LON:CHG) up 4%
Senior (LON:SNR) down 3% (but they have also published annual results)

Well done to those of you who have invested successfully in defence stocks. It’s not a sector where I claim to have any special insight, but it does seem that it will continue to enjoy strong demand for the foreseeable future.

Companies Reporting

Name (Mkt Cap)	RNS	Summary
Bunzl (LON:BNZL) (£11.0bn)	Final Results	Outlook: maintaining guidance for robust revenue growth and operating margin in line with 2024.
Londonmetric Property (LON:LMP) (£3.8bn)	Adds £13.2m of annual rental income	122 lettings, regears and rent reviews. Rent reviews giving a 16% uplift on 5-year basis.
Senior (LON:SNR) (£678m)	2024 Annual Results	Outlook: in line with expectations. Committed to sale of Aerostructures business.
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Andy Garsed

3rd Mar

Hi John and The Phoenix, Great comments thanks. I am beginning to think I am unlucky using Stockopedia with some new investments since 2019. I am now well underwater with larger new holdings bought and still held with WYN & SFR and flat with VSVS. Rankings and charts were positive at the time. The one very bright spot is MGNS. The program has been great in helping me assess my existing holdings owned pre-2019 but many of these have been in existence for years - FTSE 100. In the early years, I did buy and sell a few times with success EZJ, WG & GOG so I am seriously wondering if Stockopedia is better suited to that short-term investing/trading style rather than long-term buy and hold investing. I'd welcome comments.

timarr

I am seriously wondering if Stockopedia is better suited to that short-term investing/trading style rather than long-term buy and hold investing

I can't add anything substantive to that point, but I note that the highest Stockranked companies tend to have decent momentum, which itself tends to be mean reverting over a two to three year period. So I'd be surprised if selecting a portfolio of highly ranked companies would be a good long-term buy and hold strategy.

On the other hand, as NAPS has shown, it is a good guide to annual rebalancing.

So perhaps it's neither a LTBH nor a short term trading strategy, but something in between?

Daniel Bird

There’s the HanETF “Future of Defence” fund (ticker “NATO”) which invests in a similar space. I imagine it includes US as well as European stocks, and it also includes a bunch of cybersecurity stocks (hence the “future of” title). I imagine it’s done rather well over the last couple of weeks!

rmillaree

well said what the stock ranks do is sort the dross out from the more quality companies - but they most certainly dont see into the future. hopefully though higher ranked companies are less likely to be dross . For each company though one needs to dyor before investing and take their own responsibility. its pretty clear though that the naps type approach seems to work well so that is itself pretty decent indicator that the indicators and genrally helping albeit for individual companies they may fail.

£card was mentioned today and i personally thought that 140p was perhaps a too high a price to pay - but price has come down now. Ok the stocky rating has dropped but thats more due to the really poor shareprice performance rather than much wrong about financials - albeit 2026 forecasts have been trimmed somewhat.

So its clear that one can take good quality companies and wait it out for pull back before investing sometimes - so again its clear that the stockrank should never be the be all and end of of making decisions ref whether to buy or sell at that time.

Im think there have been quite a few people over time commenting on here that by swapping to higher ranked companies that has paid dividends over the long term.

as ever there isnt any magical fix here

Rusty2

Depends what you mean by short term. I don't think it really suits trading under a month. It was set up more for longer term investing. NAPs runs for 1 year. You can check a few stocks that have performed well for a number of years and their Stockranks. Let's take Rolls-Royce Holdings (LON:RR.) If you had bought when the Stockrank went up to 88 the share price was 145p, in Feb 2023, share price now 776p.
Yu (LON:YU.) did even better going up about 9x in 2 years.

Marks and Spencer (LON:MKS) up about 2.5x in 2 years.

Serabi Gold (LON:SRB) Up 4x in around 17 months.

International Consolidated Airlines SA (LON:IAG) 2x in 18 months.

3i (LON:III) 2x over 2 years.

I'm sure there are loads more.

Tommy H

I wish I knew what I did with it but Ed Shing did a brilliant book which I wish that I read when I first started investing, or is that just as simple as putting money in my company pension? The Idle Investor, it had similar high level strategy, which aligned to NAPS so had a momentum factor in, and three levels of how much time a month you could put in for which way to go

Good Luck Tommy

way

I'd guess it's the controversial weapons manufacturers that are gonna do well now.

The way things are now there's little point spending on weapons that don't provide that big stick. Be it to threaten with or actually wave it.

10Bagger

Hi, to find etf’s if you go on justetf and use the etf screener, you can usually find if an etf exists for a sector/country/theme

Not necessarily, the Thales order is for air defence missiles.

champians

Good report. Is there an easy way to browse these sector indexes such as the aforementioned FTSE Eurofirst 300 Aerospace & Defense Index ? Appreciate we can type 'FTSE Eurofirst 350' into search, get a list and select each individually but a page listing them all or similar would be most handy

Thanks, Ken, Indeed stock ranks were very misleading. I could have sold SFR at 60%+ up in the 80's yet now have a sizeable 52% loss. Rankings weren't screaming sell. Maybe I missed something from the charts? I wonder if someone will buy up once trading improves assuming cash / od facilities are adequate in the meantime?

Agreed. MGNS up 126% and MKS, that I have held for many years, though bought more now up 145% - I am very grateful. It's my smaller caps that are under performing badly.

It has been a though market for small caps, a few are still doing ok, such as Synectics (LON:SNX) and Filtronic (LON:FTC). I think smaller caps are shorter term.

The Phoenix

A bit of an aside this was either a hedge or the finest example of insider trading ever

https://www.forbes.com/sites/s...

Harry Hindsight

Global X Defence Tech UCITS ETF USD Acc (LON:ARMR) holds Rheinmetall, Palantir, RTX, BAE, Nortrop, General Dynamics, LM, L3H, Thales and Leidos so good smatteing of US and European.

DYOR - trouble is buying them and today all trades closed across the board. How fickle are retail investors - this was coming way back but today 'boom' - dumb.

Future of Defence UCITS ETF USD Acc (LON:NATO) seems ok. VanEck Defense UCITS ETF USD A (LON:DFNS) option plus Blackrocks iShares iShares Global Aerospace & Defence UCITS ETF USD A (EPA:DFND)

They all hold the same stuff - Blackrock, VanEck, Global X, it depends on who are the best. Blackrock/iShares would have thought with 4bn analysts they would cane it but they do not.

The focus away from US to Europe defence contractors is very healthy. Despite the dysfunctional political and financial system it carries some seriously big hitting industries. Shame energy got in the way and sourcing parts for China (and now apparently India lol) - despite share price rises these co's need to deliver on expensive kit - a difficult task.

Remember Avon Technologies (LON:AVON) could not deliver their helmet orders. And so their production facilities have doubled since - if so the whoopee. Back up the truck.

Retail money flowing into ETF's. Fair enough. But the companies the support need to produce the goods. You cant just throw money at a company BAE Systems (LON:BA.) and it increases production overnight - this takes time. See some cos now looking to India or supply chains.

Putin did not expect the push back he got, or maybe was pushed into a corner - Russian Bear - look it up - Napoleon failed, Hitler failed - Vladamir with his European Army similarly so.

At end of days who holds the nukes - US Russia China - everything else is 'noise'.

Forget global/macro - lets try to make money out of Stocko using their metrics.

"Greed is Good"

What - you want to pay more tax than already because you trust the Clown to use it wisely - I have a nice car I want to sell you.

KevinS1

4th Mar

But she had sold £400k worth on 27th Feb - which looks to me like a LTIP maturing as another director also had a very large sale on the same day.

I would therefore think that her LTIP matured, she sold the lot to pay the tax etc and has then used some of the money to buy shares in the market.

Perhaps not a bad sign.

WDWombat

I was using justetf.com yesterday to look at ETFs with low US exposure. I found it easily the best source of information I have encountered on ETFs to date. It may be of use if you are still searching for exposure to defence stocks, I don't know.

Plus no stamp duty on them so thats another 0.5% you don't need to make back to get to break even.

Daily Stock Market Report (Mon 3 Mar 2025) - Defence stocks, ZTF, SFR, RFX, AVON, KGH, HTG, QTX

Defence stocks

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Graham Neary

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