Do Defense Stocks Cost Too Much?
How much should defense stocks cost? In 2017, I dived deep into this issue, concluding that on average and over a long span of time (17 years), U.S. defense stocks had historically sold for a valuation of almost exactly 1 times sales.
I don't know about you, but 17 years seemed like a pretty hefty data set to me. Big enough, in fact, that when I saw most large defense stocks selling for closer to 1.6, 1.7, or even 1.8 times trailing sales in 2017, that meant these stocks cost too much. And so I advised investors to avoid defense stocks in 2017.
Was I right about that or wrong?
Source Fool.com
