Investors scout for 'hidden' defence plays as rally broadens
Investors are turning their attention to mid-cap industrial companies that could benefit from increased military spending in Europe, rather than relying on traditional defense stocks. This shift is driven by the recognition of underpriced defense assets and the potential for higher valuation multiples and earnings growth tied to rising defense spending. As a result, Thyssenkrupp's TKMS division, which includes submarines and frigates, has emerged as a promising "hidden" defense stock.
- The broadening of the defense rally beyond traditional pure-play stocks could lead to increased investment opportunities for investors willing to take on more risk.
- What role do mid-cap industrial companies like Thyssenkrupp and Iveco play in Europe's overall defense strategy, and how might their involvement impact the region's military capabilities?