War is good for the US Mil / Industrial complex - and it's shareholders

The AMEX Defence Index is composed of the following companies and this table shows who they are and their current relative weighting :
This is the 12 month chart to close of business last night (click to enlarge)

Defence Secretary Robert Gates, has an additional US$42 billion in funding from Congress to cover expenditures in Iraq and Afghanistan. This includes US$11 billion to buy another 7,000 mine-resistant, ambush-protected vehicles (MRAP AKA 28 ton armoured Mack truck buses - see previous posts) on top of the 8,000 vehicles already on order, and US$9 billion to provide new equipment and technology. .. It also means that this brings the total funding to about US$190 billion compared with the $165 billion approved by Congress for 2007.

The massive US$20 billion Middle East arms package peddled by the Bush administration to Saudi, Gulf States and ...er... Israel also adds to the defence industries bonanza. Exports are broadly 10 - 20 % of total sales.

The AMEX Defence Index, jumped 14.25% in afternoon trading. Since last year the index has climbed 47% while the S&P 500 has only picked up 15%.

Shares of Lockheed Martin (LMT) rose 76 cents to close at $105.72. The stock is nearing its all-time high of $107.33, established in July.

General Dynamics Corp. (GD) stock added 7 cents to $84.37

Shares of Raytheon (RTN) also collected 75 cents yesterday, closing at $64.47.

It is not only the well known majopr contractors who have seen a massive doubling of their share price in 12 months . FLIR systems (mkt Cap US$3.7BN.) are major suppliers of infra red / thermographic sensing.

Only last week they announced a $28.6 million order from the United Arab Emirates (UAE) for its Star SAFIRE® III stabilized, multi-sensor systems. The units delivered under this order will be used for homeland security and high-value asset protection missions.