Do the upcoming US mid-terms present an opportunity for US defence stocks?

This has been the longest bull market on record. This late in the business cycle, we believe it is worth focusing in particular on the merits of investing in US defence stocks.

Large-cap stocks in this sector have enjoyed a great run from the depth of the sequestration-induced depression in early 2013, with relative valuation multiples expanding earlier this year. Since then, the relative multiple has reduced somewhat, despite a near-term budget outlook that remains solid. We are now in the third year of US defence budget growth, with a typical defence cycle length of five to seven years. Defence contractors' revenue growth is in the second year of growth as Department of Defense outspend lags budget authority. GAM's Howard: The relentless logic of the S&...