Core Viewpoint - L3Harris is undergoing a significant restructuring that involves spinning off its missile solutions and rocket engine divisions, which will lead to the creation of two new defense companies focused on missile and rocket engine production [2][6][10]. Group 1: Investment and IPO Plans - The investment phase of L3Harris's restructuring is set to occur in the first quarter of 2026, with the missile solutions division expected to go public in the second half of 2026 [1]. - The Department of Defense plans to invest $1 billion in L3Harris's missile solutions business through the purchase of preferred stock [2]. Group 2: Business Divisions and Acquisitions - L3Harris will retain a minority interest in Rocketdyne, which is being sold to AE Industrial Partners, characterized as an acquisition [3]. - AE Industrial Partners will acquire a 65% stake in L3Harris's space propulsion and power systems business, previously part of Aerojet Rocketdyne [4]. - The missile solutions division produces motors for military missiles, while Rocketdyne focuses on non-military rocket engines [7][9]. Group 3: Financial Projections and Market Impact - The combined annual revenue for Rocketdyne and the missile solutions business is projected to be approximately $9.3 billion, with an operating profit of over $1.1 billion [10]. - Post-restructuring, L3Harris is expected to retain about $12.3 billion in business and $2.2 billion in operating profit, resulting in a smaller but more profitable company [10]. - The restructuring is anticipated to enhance L3Harris's stock value, making it a more attractive investment option [11].

Core Insights - The article emphasizes the importance of data-driven analysis in identifying investment opportunities within the aerospace, defense, and airline sectors [2]. Group 1: Industry Overview - The aerospace, defense, and airline industry is characterized by significant growth prospects, which are analyzed through a complex lens by industry experts [2]. - The investing group, The Aerospace Forum, aims to uncover investment opportunities in this sector, leveraging in-house developed data analytics tools [1][2]. Group 2: Analyst Background - Dhierin-Perkash Bechai, an analyst with a background in aerospace engineering, leads the investment group and provides context to industry developments [2]. - The analysis provided by the group is informed by data, ensuring that investment ideas are grounded in empirical evidence [2].

Core Insights - The article discusses the Dividend Contenders List, highlighting companies that have consistently raised dividends for at least a decade but have not yet reached 25 years of growth, making them attractive for income-focused investors [1] Dividend Growth and Market Conditions - Market volatility is expected to persist due to macroeconomic uncertainties, geopolitical factors, policy changes, and evolving sentiments around artificial intelligence [2] - Dividend growth companies are seen as a means to mitigate market turbulence, with historical data indicating that these companies tend to deliver higher returns with lower risk compared to peers [3] - U.S. common dividend increases reached $13.1 billion in Q4 2025, up from $11.7 billion the previous year, indicating a positive trend in dividend growth [4] Future Dividend Expectations - Companies are projected to deliver mid-single-digit dividend increases in the upcoming year, reflecting cautious optimism amid ongoing uncertainties [5] Methodology for Dividend Contenders List - The list includes companies recognized for increasing dividends for 10 consecutive years but less than 25 years, focusing on those with the highest dividend yields as of January 22 [7] Company Highlights - **Analog Devices, Inc. (NASDAQ:ADI)**: Dividend yield of 1.30% as of January 22; BofA raised its price target to $350, citing expected modest Q4 earnings beats and stronger Q1 guidance, particularly for industrial-focused chipmakers [9][10] - **BlackRock, Inc. (NYSE:BLK)**: Dividend yield of 2.03% as of January 22; BofA raised its price target to $1,467, with Q4 profit exceeding estimates due to higher asset prices and record assets under management of $14 trillion [13][14] - **Lockheed Martin Corporation (NYSE:LMT)**: Dividend yield of 2.35% as of January 22; Susquehanna raised its price target to $660, citing favorable industry conditions and record F-35 fighter jet deliveries, which are crucial for revenue [17][19]

Group 1: Market Performance - South Korean stocks have experienced significant growth, with the iShares MSCI South Korea ETF (EWY) up 19.3% year-to-date as of January 23, 2026, and having jumped 92% in the previous year [3][10] - The overall stock market performed well in 2025, but the EWY notably outperformed the broader market [2][10] Group 2: Drivers of Growth - The surge in South Korean stocks is attributed to the AI boom and the breakout performance of major memory chipmakers, SK Hynix and Samsung, due to increased demand and rising memory prices [5][6] - A weak Korean won has also favored exports, contributing to the positive market performance [6] Group 3: Valuation and Policies - As of January 23, the EWY trades at a price-to-earnings ratio of 17, significantly lower than the S&P 500's ratio of 28, indicating a potentially undervalued market [6] - Recent shareholder-friendly policies from President Lee Jae Myung, including improved corporate governance and reduced tax rates on dividends, are expected to enhance valuations further [6] Group 4: ETF Composition - The EWY is heavily weighted towards Samsung and SK Hynix, which together account for 45% of the fund, with Samsung at 26.8% and SK Hynix at 18.3% [8] - Other notable holdings include Hyundai Motor, Kia, Hanwha Aerospace, and Naver, indicating a diverse portfolio within the ETF [9] Group 5: Future Outlook - The EWY is positioned for continued success, particularly with strong trends in the memory chip sector, although it carries risks due to the volatility of that subsector [10][11] - The fund's low valuation and strong performance suggest it may be a smart investment choice for those looking to diversify internationally [10][11]

with us is Matt Mskin, the co-chief investment strategist at Manu Life, John Hancock. Matt, it's good to see you. And um I mean, where would you have us start.It sounds to me like you're backing a little bit away from the Mag 7 and looking more to the value side of things. Is that right. >> Yeah, Kelly, quality value is our mantra right now.Industrials are our favorite sector as we're starting to see higher return on equity, good solid companies seeing a pull through of demand. Earnings estimates into 2026 ...

Core Viewpoint - The investment strategy is shifting towards quality value stocks, particularly in the industrial sector, as earnings growth expectations remain strong for 2026 [1]. Industrial Sector - The industrial sector is favored due to higher return on equity and solid demand, with earnings growth projected at 16% [2]. - Industrial companies are expected to benefit significantly from accelerated depreciation policies, which will stimulate tech capital expenditures [3]. - The aerospace and defense industries are experiencing robust demand, indicating a positive outlook for these sectors [6]. Defense Stocks - Defense stocks have outperformed most sectors, with Boeing's stock rising 40% since November [4]. - Investors are advised to embrace geopolitical risks through investments in defense stocks and metals, rather than attempting to trade on geopolitical headlines [5]. Mid and Small Caps - Mid-cap stocks are gaining attention, with a notable participation in the market, contrasting with the focus on mega-cap tech stocks [7]. - Small and mid-cap stocks are showing strong earnings momentum, particularly in the industrials and regional banks [9]. Regional Banks - Regional banks are experiencing double-digit earnings growth and active M&A activity, although they face potential headline risks and regulatory challenges [10]. Economic Outlook - The economy is showing signs of good growth with controlled inflation, countering fears of stagflation [12]. - Economic indicators such as PMI and ISM are expected to remain above 50, signaling positive growth [13]. - Inflation is projected to moderate into 2026, with housing prices stabilizing and energy prices remaining manageable [14].

Core Insights - The defense sector has shown remarkable resilience and outperformance in 2025, driven by global conflicts and increased NATO spending, contrasting with broader market volatility [1][9] - The upcoming fourth-quarter earnings season is expected to validate the conversion of government contracts into tangible growth and shareholder value for defense companies [2] Defense Sector Performance - Defense stocks are benefiting from significant upward revisions in global military spending, with NATO committing to 5% of GDP on defense by 2035 and notable increases in defense budgets from countries like India and China [3][4] - Lockheed Martin (LMT) has raised its 2025 sales outlook, indicating strong sales expectations for the fourth quarter, supported by a growing backlog of orders [5] Technological Advancements - The rise of AI and technology adoption in defense, including cybersecurity and sensor systems, is driving revenue growth for diversified defense companies like L3Harris Technologies (LHX) and RTX Corp. (RTX) [6] - This tech-driven growth provides stability and protection against broader market volatility, making defense ETFs attractive for investors [6] Earnings Expectations - The Aerospace sector, which includes defense stocks, is projected to report earnings growth of 63.6% with a revenue increase of 12.2%, significantly outpacing the overall S&P 500 earnings growth of 8.7% [8] Defense ETFs Overview - The following defense ETFs are highlighted for their potential to benefit from the expected strong quarterly results: - **Global X Defense Tech ETF (SHLD)**: Net assets of $6.98 billion, top holdings include LMT (8.38%), RTX (7.54%), and General Dynamics (GD) (7.19%), with a 91.1% increase over the past year [10] - **SPDR S&P Aerospace & Defense ETF (XAR)**: Net assets of $5.95 billion, top holdings include Karman Holdings (4.70%), Rocket Lab (4.33%), and Kratos Defense (4.19%), with a 60.3% increase over the past year [11] - **iShares U.S. Aerospace & Defense ETF (ITA)**: Net assets of $14.84 billion, top holdings include GE Aerospace (19.88%), RTX (15.67%), and Boeing (8.44%), with a 51.4% increase over the past year [12] - **Invesco Aerospace & Defense ETF (PPA)**: Market value of $7.88 billion, top holdings include Boeing (9.11%), RTX (8.40%), and LMT (8.20%), with a 45.9% increase over the past year [13]

Group 1: Market Overview - The analysis covers the performance of the S&P 500 index, indicating its current trends and potential future movements [1] - The report highlights the competitive landscape among major aerospace companies, including Rolls-Royce Holdings PLC, Safran SA, and GE Aerospace, focusing on their market positions and strategic initiatives [1] Group 2: Company-Specific Insights - Rolls-Royce Holdings PLC is noted for its advancements in technology and operational efficiency, which may enhance its market share in the aerospace sector [1] - Safran SA's recent financial performance shows a strong recovery post-pandemic, with significant growth in its aerospace division [1] - GE Aerospace is recognized for its innovative product offerings and strong order backlog, positioning it well for future growth [1]

Core Viewpoint - Celestica, Inc. is expected to report lower revenues in its Advanced Technology Solutions segment due to soft demand and macroeconomic challenges, despite an overall projected revenue growth for the company [1][5]. Group 1: Advanced Technology Solutions Segment - The Advanced Technology Solutions (ATS) segment focuses on aerospace and defense, industrial, health tech, and capital equipment businesses, including semiconductor and display verticals [2]. - The ATS segment is experiencing weakness primarily due to elevated inventory levels in industrial end markets, which hinder net sales growth [3]. - Demand in the semiconductor capital equipment market remains soft, with foundries reducing spending on capacity buildup due to uncertainties related to tariffs and trade [3]. Group 2: Revenue and Earnings Expectations - The Zacks Consensus Estimate for ATS revenues is $789.68 million, a decline from $805.8 million a year ago, while total revenue is estimated at $3.45 billion, indicating a 35.46% year-over-year growth [5]. - Net income for the quarter is projected at $42.41 million, with earnings expected to be $1.73 per share, up from $1.11 in the same quarter last year [5]. Group 3: Portfolio Restructuring and Market Impact - The company is actively reshaping its portfolio for aerospace and defense markets, which is impacting near-term revenues but is expected to enhance profitability in the long run [4]. - Weaknesses in capital equipment and aerospace and defense markets are anticipated to be partially offset by strong performance in the health tech portfolio [4].

Core Insights - The space, drone, and missile industries are experiencing significant growth, positively impacting the shares of Karman, a company that provides technologies for all three sectors [1] Industry Summary - The space industry is currently booming, contributing to increased demand for related technologies [1] - The drone market is also expanding rapidly, leading to heightened interest and investment in drone technologies [1] - The missile sector is witnessing growth, which is beneficial for companies involved in missile technology supply [1] Company Summary - Karman is positioned favorably due to its involvement in the booming sectors of space, drones, and missiles, which is reflected in its share performance [1]