Top stocks Lockheed Martin (LMT) and PepsiCo (PEP) hit all-time highs Friday, continuing to rally after beating Q3 estimates earlier this month. Both are in their buy zones, with LMT stock coming off a consolidation and PEP stock passing a buy point off a cup base.
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Defense giant Lockheed beat analyst estimates when it reported third-quarter earnings on Oct. 18, kicking off a string of solid metrics from other military contractors.
Defense stocks have outperformed the market this year as the United States spent billions on aid to support Ukraine following Russia’s February invasion. As the war escalated in September, Russian President Vladimir Putin publicly warned of his willingness to resort to nuclear force.
Lockheed shares are trading well above their 50-day and 200-day moving averages. The relative strength line is hitting new highs at the same time, highlighted by the blue dot in the daily MarketSmith chart.
Lockheed ranks third in the Aerospace/Defense industry group, which is 49th out of 197 IBD industry groups, according to IBD Stock Checkup.
Top Stock Gains Strength As Recession Looms
PepsiCo also broke out Friday, surging more than 2% from a cup base, past a 181.17 buy point.
On Oct. 12, the snack superstar reported Q3 earnings and sales that beat analyst estimates. It has since gained ground as a defensive play, with persistent high inflation raising concerns the U.S. is headed into a recession.
Many investors consider the beverage and snack industries to be recession-resistant.
PepsiCo makes salty and sweet snacks in addition to beverages and is ranked No. 4 in the Food-Packaged industry group, behind sector leader Hostess Brands (TWNK).
PepsiCo currently holds an 86 RS Rating and a 94 Composite Rating.
Follow Michael Molinski on Twitter @IMmolinski
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