Go!
India's defense spending is usually pretty low on the list of things that get investors' attention, but which of these American companies is making it one of his top priorities, selling the country $2.1 billion of maritime patrol aircraft?  

A.) Acme Corporation (ACME)
B.) Boeing (BA)
C.) General Dynamics (GD)
D.) Motorola (MOT)
E.) Honeywell (HON)

Published: September 9, 2009

The correct answer is      (B.) Boeing

The Stockholm International Peace Research Institute ranked India the tenth-largest military spender in 2008. The country is slated to spend between $50 billion and $55 billion on military hardware in the next few years. That's not India's total military budget: That's what it's going to spend on actual weapons systems. Chief among these is a major contract for 126 fighter jets that will be worth a total of about $10 billion.

U.S. weapons manufacturers have an edge: They've already inked deals in India, which is why the best way to profit from India's defense spending is from Boeing, which has sold the country $2.1 billion worth of maritime patrol aircraft.

In recent years, the combination of the global economic downturn and a shift in U.S. defense priorities has put the squeeze on this company. Boeing isn't going to sit still, however. It's going to India to make a $10 billion sale. If Congress or the White House doesn't want to continue the F-22 fighter program, then Boeing will compete for the $3.5 billion in unmanned aircraft in the Department of Defense budget. (To that end, Boeing bought a manufacturer of drones last year.) It is also expanding into other defense-related areas such as cyber-security.

Boeing's recent problems with design flaws in its new 787 commercial plane have rattled the company and have taken Wall Street's focus off defense, where more than 50% of the company's revenue comes from. But the company still has billions in other orders just waiting to be filled -- about five times 2008 sales. So although U.S. defense spending may ebb, the world is still a very dangerous place, and military leaders around the world are keen on protecting their people. The top 20 countries in the table above (see intro above) have $13.4 billion to spend, and you can bet they will spend some with Boeing.

Boeing is one example of why StreetAuthority editor Andy Obermueller scours government budgets, contracts, disclosures, and speeches in order to figure out how the private sector--and investors like you--can benefit from government spending both at home and abroad. Boeing isn't the only find Andy made; his latest issue of Government-Driven Investing includes a bevy of uncovered gems poised to rake it in as governments around the world shell it out. To learn the names of these securities, and to learn more about Government-Driven Investing, please visit this link.

Want to answer more trivia questions? Visit our archives here!



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