Best stocks during times of war

Screening Filters

1. Market Cap ≥ $10B

   • Purpose: Focus on larger, established companies.
   • Rationale: In periods of war or geopolitical tension, capital typically rotates into:
     • Major defense contractors
     • Large integrated oil & gas companies
       These are usually large‑cap names. Bigger firms are more likely to:
     • Have existing government contracts and long-term defense programs
     • Withstand volatility and supply-chain shocks better than small caps
       So this filter targets the large, systemically important companies that historically benefit most from war-related spending and higher energy prices.

2. 1-Year Price Change ≥ +10%

   • Purpose: Capture stocks already showing strong recent performance.
   • Rationale: When tensions rise, sectors thought to benefit (defense, oil) often start outperforming before or during the conflict:
     • A positive 1-year return suggests the market is already rewarding these names, possibly because of:
       • Rising defense orders
       • Higher energy prices
       • Anticipation of increased government spending
         This filter tries to align with stocks that the market has recently favored under the prevailing geopolitical backdrop.

3. Sector in: Aerospace & Defense, Energy, Energy – Fossil Fuels

   • Purpose: Focus on industries historically linked to wartime outperformance.
   • Rationale:
     • Aerospace & Defense: Direct beneficiaries of higher military budgets, increased procurement of equipment, and long-term defense programs.
     • Energy / Fossil Fuels: Wars—especially involving key producing regions—often push up oil and gas prices, improving revenues and profits for producers, refiners, and integrated energy companies.
       Restricting to these sectors aligns the screen with industries that have a structural connection to wartime conditions.

4. Themes: Aerospace & Defense, Oil Sector, National Defense

   • Purpose: Ensure the companies are not only in the right sector but also have a clear business focus tied to war-related dynamics.
   • Rationale:
     • Sector classifications can be broad; an “industrial” or “energy” firm might not be heavily exposed to defense or oil.
     • Thematic tags like Aerospace & Defense, Oil Sector, and National Defense narrow it down to companies:
       • Selling weapons systems, defense technology, or military services
       • Producing/exploring/refining oil and gas
       • Heavily involved in national security supply chains
         This helps filter out peripheral names and keep those most directly leveraged to wartime spending and energy shortages.

5. Net Margin ≥ 8%

   • Purpose: Favor companies with solid profitability.
   • Rationale:
     • War periods can be volatile: input costs, supply chains, and financing conditions can swing.
     • Firms with healthy profit margins are better positioned to:
       • Absorb rising costs
       • Convert higher demand (defense orders, higher oil prices) into actual earnings
         An 8%+ net margin helps identify companies that can not only see more revenue during war but also turn that revenue into profits.

6. 5-Year Revenue CAGR ≥ 5%

   • Purpose: Select companies with a history of consistent top-line growth.
   • Rationale:
     • Structural growth in revenue suggests:
       • Ongoing demand for the company’s products (e.g., long-term defense programs, energy demand)
       • Competitive positioning and successful contract wins
         During times of war, those already on a growth trajectory may:
       • Benefit more from incremental spending
       • Scale up production and contracts more effectively
         This filter avoids stagnant or declining businesses that might not translate wartime conditions into sustained growth.

Why Results Match the Question

• The sector and thematic filters explicitly target industries historically associated with stronger performance during wartime: defense and fossil-fuel energy.
• The market cap filter focuses on major players that are typically the primary recipients of military contracts and beneficiaries of energy price spikes.
• The profitability (net margin) and growth (5-year revenue CAGR) filters ensure the screen emphasizes financially solid, growing firms that are better able to exploit wartime demand and withstand volatility.
• The positive 1-year price performance filter aligns with stocks that the market is already rewarding in the current environment, which is often how wartime outperformance shows up in real time.