Defence

Screening Filters

1. Industry = Aerospace & Defense

   • Purpose: Focus directly on companies operating in the defense sector or closely related activities (weapons systems, defense electronics, military aircraft, space/defense contractors, etc.).
   • Rationale: Your question is about the “defense sector or related financial instruments.” Classifying by industry is the most direct way to isolate companies whose core business is defense-related, rather than general industrials or tech firms with only incidental defense exposure.

2. Market Cap ≥ $5,000,000,000 (≥ $5B)

   • Purpose: Limit results to larger, more established defense companies (mid/large caps).
   • Rationale: For sector-level analysis and investment themes, larger defense contractors:
     • Are usually key beneficiaries of defense budgets and long-term government contracts.
     • Tend to have more stable financials and better disclosure, which makes sector analysis more meaningful.
     • Are more representative of the “defense sector” in index and ETF construction.
       This aligns with providing more robust, analyzable names rather than tiny, speculative defense stocks.

3. EPS (TTM) > 0

   • Purpose: Include only companies that are currently profitable over the trailing twelve months.
   • Rationale: Sector analysis is clearer when looking at firms that are generating positive earnings:
     • Makes valuation ratios (like P/E) meaningful.
     • Filters out distressed or early-stage companies that may not reflect the broader sector dynamics.
       This aligns with a financial/investment-oriented view of the defense sector rather than purely speculative plays.

4. P/E (TTM) between 10 and 30

   • Purpose: Focus on defense stocks trading at a “reasonable” valuation range—neither very low (potential distress or unusual factors) nor extremely high (speculative growth or temporary overvaluation).
   • Rationale:
     • A lower bound of 10 helps avoid ultra-low P/E names that might be “value traps” or facing severe fundamental issues.
     • An upper bound of 30 helps avoid overly speculative or momentum-driven names where current price may be disconnected from near-term earnings. For sector analysis, this delivers a set of companies roughly in the “core” valuation band, which can give a cleaner picture of how the typical defense stock is priced.

5. Analyst Consensus = Strong Buy or Moderate Buy

   • Purpose: Emphasize defense companies currently viewed favorably by sell-side analysts.
   • Rationale:
     • Ensures the list tilts toward names with positive earnings outlooks, order pipelines, and relative strength within the sector.
     • Reflects where professional analysts see better risk/reward in the defense space, which is often useful when discussing sector positioning or idea generation. This filter makes the output more actionable if you’re considering investment ideas within the defense sector, not just a raw sector list.

Why Results Match Your Request

• The industry filter directly targets the defense sector by focusing on Aerospace & Defense companies, which are the core of defense-related equities.
• The market cap, EPS, and P/E filters refine the universe to established, profitable, and reasonably valued defense firms, making any sector-level financial analysis more meaningful and less distorted by outliers.
• The analyst consensus filter adds a forward-looking element, highlighting defense names where professional analysts currently see relative strength or opportunity, which is relevant if you’re interested in investable ideas and not just descriptive sector info.

Together, these filters produce a focused, investable subset of the defense sector suitable for both qualitative discussion (industry trends, budget sensitivity, geopolitical themes) and quantitative financial analysis (valuations, earnings power, and market positioning).