Gabelli Likes Lockheed, RTX, Boeing — and a Small Supplier You’ve Never Heard Of

Core Viewpoint - The defense sector is experiencing a multi-year, capital-intensive buildout across the missile supply chain, with significant opportunities for both major primes and smaller suppliers [2][3]. Group 1: Major Defense Primes - Lockheed Martin reported a record backlog of $194 billion at year-end 2025, with F-35 deliveries increasing from 110 in 2024 to 191 in 2025, and a turnaround in its Missiles and Fire Control segment from a $804 million loss to a $535 million profit [4]. - RTX has a record backlog of $268 billion, with $107 billion in defense contracts, and Pratt & Whitney military revenues grew by 30% in Q4, indicating strong momentum entering 2026 [5]. - Boeing, while still facing cash burn and negative operating margins, holds a total backlog of $682 billion and is increasing 737 production, representing a longer-term recovery bet [6]. Group 2: Smaller Suppliers - Albany International, a smaller aerospace and defense supplier, is positioned to benefit from the capital expenditure wave driven by major primes, as it produces essential components for missile systems [3][7]. - The contract assurance from the Department of Defense is expected to trigger significant capital expenditures across the missile supply chain, positively impacting both large and small suppliers [7].