Jupiter's Alex Savvides on investing in UK defence and why Babcock remains undervalued

Amid increased government spending

Jupiter’s Alex Savvides, lead investment manager on the UK Dynamic Equity fund, cast doubt on whether the defence stocks in his fund are overvalued and hinted at potential investments in the field as military tensions in Europe rise following the US government’s pullback from defending on the continent.

Speaking at a roundtable on Wednesday (19 March), Savvides pointed to his fund's holding in Babcock, a British aerospace, defence and nuclear engineering business based in London, which runs a number of ship dockyards for the UK government. According to data from MarketWatch, shares in the UK defence company have risen 14.9% in the past month alone and 49.2% since the beginning of the year. Reeves allocates £2bn to UK defence companies to unlock overseas orders The earnings which derive the company's price-to-earning ratio – currently at 14.5x, according to the Bloomberg average an...