Artisan Global Opportunities Fund on BAE Systems plc
Thesis
BAE Systems is a large European defense prime with significant air, maritime and missile franchises and a substantial backlog. The manager expects it to benefit from a multiyear rise in global defense spending and its role as a supplier to the US Department of Defense. However, uncertain UK procurement plans and increasingly demanding expectations for order growth weakened the immediate risk-reward. The fund trimmed while retaining a favorable view of the long-term franchise.
“We believe the company is well positioned to capitalize on the multiyear increase in global defense spending”
Key risks
- UK defense-spending plans have been delayed.
- Future procurement priorities and allocations remain uncertain.
- Market expectations for continued order-book acceleration have become demanding.