How to Stock up on Aerospace and Defense

Troy Lahr, a defense and aerospace analyst at Stifel, Nicolaus, was named The Wall Street Journal’s “Master Stock Picker” for the sector in 2006. On “Power Lunch” Tuesday, Lahr offered market insights -- and his favorite stocks.

Boeing tops Lahr’s list of stock picks. And he predicts a large order cycle for the aerospace giant: “We’re big believers in the commercial aerospace order cycle,” he said. “We think the U.S. and the European carriers need to begin placing orders and that’s going to stretch us into a larger cycle for Boeing.”

Lahr also recommends Raytheon on the large-cap side and Orbital Sciences, a missile-defense and satellite business, on the smaller side.

What’s more, airline outsourcing is on the rise, Lahr said. So he recommends keeping an eye on AAR, which provides supply-chain logistics: “These guys are really the dominant player in the space right now.”