Arrakis Global
Global Thematic Fund Manager
Rheinmetall does not deserve a P/E of 100, since no German company ever does. Its shares fell sharply after reports Germany may cancel the F126 frigate program, on which Rheinmetall was expected to be lead contractor, raising questions about its naval expansion, per @wallstengine. x.comÂ
The Trade Desk remains a value trap after missing across the board. Bottom-picking stocks in stage 4 downtrends is best avoided. x.comÂ
Rheinmetall's chart shows the trend is in place. x.comÂ
The best valuation-adjusted European and Asian defense names are probably not the obvious winners such as Saab and Rheinmetall, where much of the easy multiple expansion already happened. In Europe, Leonardo ranks first, then BAE Systems. In Asia, Korea Aerospace Industries and Hanwha Aerospace lead, followed by LIG Nex1 and Hyundai Rotem. Per @eliant_capital, this year's geopolitical developments mean European and Asian defense companies are still likely headed a lot higher. x.com x.comÂ
Rheinmetall is a sovereignty trade, not the cyclical defense stock the market still models. Germany is rebuilding 80 years of atrophied defense capacity in a decade. The F-126 frigate contract is not a one-off but the opening bid on a $100B+ European rearmament supercycle. x.comÂ
Rheinmetall's growth isn't limited to European defense: Kuwait is buying its MASS decoy launchers for the first time, a Middle East order. x.comÂ
Broadcom, Uber, Mastercard and Rheinmetall could be great buys today. x.com x.com x.com x.comÂ