Investopedia: Budget Worries Could Crimp Cubic In The Short Term

I think many investors spend too little time thinking about their investing horizons when contemplating new positions. Although "buy and hold until it works out" is probably the default strategy for many investors, it can lead to some tense moments in the short-term. That brings me to Cubic (NYSE:CUB), a company which I think has a very interesting long-term outlook, but may well underperform for the next year or two.

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http://www.investopedia.com/stock-analysis/2012/Budget-Worries-Could-Crimp-Cubic-In-The-Short-Term-CUB-FSS-LMT-LLL0924.aspx

Seeking Alpha: Microsemi Needs To Start Delivering On Its Potential

There's a quote out there, apocryphally quoted to former NFL player Randy White, that “potential is a fancy French word that means you haven't done anything yet”. Although that is arguably a harsh introduction to semiconductor company Microsemi (Nasdaq: MSCC), there is an element of truth to it – Microsemi could indeed be an attractive semiconductor stock to hold at these prices, but the company needs to begin delivering on the growth and margin potential that bulls have long seen in the name.

Come Hell Or High Water
There were multiples concerns that set these shares back in 2011, but it is worth noting that Microsemi's performance was not that bad in the context of a generally poor year for semiconductor stocks.

For starters, the near-constant wrangling over the federal budget and the concern over the government's debt and deficit situation has led investors to assume significant cutbacks in defense spending. With roughly one-third of Microsemi's business coming from selling to defense contractors like Lockheed (NYSE: LMT), Raytheon (NYSE: RTN), and L-3 (NYSE: LLL), that's no trivial concern. Fortunately for the company, the recent defense budget was not as bad as initially feared and the company stands to benefit from smart warefare retrofit projects (like GPS-equipped mortars).

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Microsemi Needs To Start Delivering On Its Potential

Invesotpedia: Can CACI Get A Bigger Piece Of A Smaller Pie?

Weak federal government spending has been a problem for a lot of companies recently, including Cisco (Nasdaq:CSCO) and NetApp (Nasdaq:NTAP). With major worries about the unsustainability of recent budget deficits and political pressure to cut spending, it wouldn't seem like a good time to invest in companies that largely rely on federal business for their revenue. Still, with IT products and services that help government agencies modernize and cut costs, CACI International (NYSE:CACI) may be able to capture a bigger piece of smaller budgets. (To help further identify company success, read 3 Secrets Of Successful Companies.)

A Stronger Fourth Quarter Than Expected  
CACI managed to log better than 13% growth in the fiscal fourth quarter, slightly beating the average analyst guess. Organic growth was strong as well, at better than 11%. As usual, business from the Department of Defense was the driver this quarter - up more than 17% and making up 81% of sales. Revenue from federal civilian agencies, the company's second largest category, was down more than 2%.

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http://stocks.investopedia.com/stock-analysis/2011/Can-CACI-Get-A-Bigger-Piece-Of-A-Smaller-Pie-CACI-CSC-SAI-IBM-LMT-RTN-LLL0820.aspx

Can Defense Be Part Of A Good Offense?

As football season gears up once again, it seems inevitable that the airwaves will fill with the old cliché that "defense wins championships". Whether that is true or not in sports, it is worthwhile for investors to ponder that question for themselves. Stocks in the defense industry have not performed notably well of late, so it may be time to consider whether this sector could do more than offer a little protection to an investor's portfolio. 

The Winding Down Of Two Wars
Perhaps it seems odd to consider defense stocks in the wake of the announcement of the end of active combat operations in Iraq. The reality is that war is not an equal opportunity to all companies. Oftentimes valuable system upgrades are pushed off and innovative new projects are delayed as an ongoing war siphons off any available resources. 


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http://stocks.investopedia.com/stock-analysis/2010/Can-Defense-Be-Part-Of-A-Good-Offense-RTN-LMT-NOC-LLL-GD-BA-ATK0826.aspx