Defense stocks haven't really had a very good year. With only a few exceptions, most defense stocks are relatively flat since January, and nearly every defense stock has fallen by double digits from its 52-week peak as of this writing. Furthermore, the industry as a whole continues to trade for above-average valuations, at least based on their historical ranges, and that probably means it's more a space to watch today than one to buy into. For instance, Northrop Grumman Corporation (NYSE: NOC), as a highly valued and highly profitable defense contractor, could be in for a reckoning based on changes in its recent business mix. But at the same time, there's some interesting opportunity, such as highly diversified Boeing Co. (NYSE: BA), which isn't cheap by any means, but has a massive commercial aviation business set up for decades of megaprofits, while BAE Systems (NASDAQOTH: BAESY) continues to trade for a far cheaper price than its peers, while being on track to deliver improving results. Continue reading