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4 Defense Stocks To Watch Amid Israeli - Palestinian Unrest

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As the Israeli - Palestinian conflict continues with little sign of slowing, the impact on defense contractors has been noted on Wall Street.

Here are four companies with heavy involvement in the Middle East worth watching:

1. Lockheed Martin

Topping Jim Cramer’s The Street ratings of Aerospace and Defense stocks for 2014, Lockheed Martin (NYSE: LMT) has a strong and long-lasting relationship with Israel.

Last year international sales made up $8 billion or 17 percent of Lockheed Martin’s total revenue, with a sizable chunk coming from Tel Aviv. The company said it anticipated international sales to make up 20 percent of revenue over the next few years.

2. Elbit Systems

Also listed in The Street’s top 10 defense stocks, Israeli drone-maker and military technology firm, Elbit Systems (NASDAQ: ESLT) has seen its stock rise as the conflict in Gaza has continued. Bloomberg reported that U.S. traded shares of Elbit have risen 6.1 percent since fighting escalated July 8.

Elbit received about 25 percent of its 2013 revenue from Israel with the promise of an even higher yield in 2014, as the country calls for more products like the Guardium unmanned security vehicle to protect troops in combat.

Related: UPDATE: Boeing Posts Upbeat Q2 Earnings, Raises 2014 Earnings Forecast

3. Raytheon

As the Arizona Daily Star reported recently, the rush by the U.S. Congress to increase funding in support of Israeli missile defense as a result of Hamas rockets falling on the country, could bode well for Tucson-based Raytheon (NYSE: RTN).

As a leading missile defense partner with Israel, the company, which also made The Street’s top 10 defense stocks list, could see a larger role and increased business in the region.

Raytheon plays a role in Israel’s Iron Dome system designed to intercept incoming rockets. The Iron Dome was developed by Israel’s Rafael Defense Systems with Raytheon named as a worldwide co-marketer.

4. Boeing

Recently Chicago-based Boeing (NYSE: BA) partnered with the Israel Aerospace Industries to co-develop the Arrow 3 interceptor, part of the Arrow Weapon System, built to protect Israel from incoming threats.

The Arrow 3 was designed to intercept missiles at higher altitudes than previous systems, even outside the earth’s atmosphere.

Boeing Defense Space and Security, which helped develop the Arrow System, represents a $33 billion business and employs 58,000.

At the time of this writing, Jim Probasco had no position in any mentioned securities.

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