Who Would You Rather Get Missiles From?

The common refrain from the mainstream media is that Ukraine’s effort to repel Russia’s invasion has stalled. 

But that’s simply not true. 

Ukraine makes gains every day.

It's withering Russian forces with cascades of artillery fire, mortars, and medium-range missiles.

It's conducting nighttime river raids behind enemy lines.

It's pestering Crimea and Moscow with swarms of drones.

And it even managed to pierce Russia’s main defensive line in the southeastern part of the country. If they continue south, they could effectively encircle Crimea, which is the ultimate objective.

The problem is that none of this grunt work has been dramatic enough to placate the media or a small group of Kremlin-backed politicians.

But it has been effective. We saw that in July when frustrations within the Russian ranks boiled over into a mutiny.

Now the ringleader of that mutiny, Yevgeny Prigozhin, is gone. But Russia’s struggles aren’t. 

The country is running low on troops, morale, and, most importantly, munitions. 

Indeed, Russia has gotten so desperate for ammo that Vladimir Putin himself has had to go panhandling to North Korea. 

He’s set to host Kim Jong Un later this month to ask for artillery shells and anti-tank missiles.

To be frank, cozying up to a tin-pot dictator and international pariah like Kim Jong Un is as pathetic as it gets. No self-respecting global leader would do it. 

But Putin doesn’t really have a choice. He’s just that desperate. 

His invasion of Ukraine is hanging on by a thread and so is he. 

Of course, the munitions shortage has been a factor on both sides. 

Ukraine is expending anywhere from 4,000–7,000 artillery shells each day, and Russia’s figures are no doubt similar. 

This is why the United States sent cluster bombs to Ukraine. That was somewhat controversial because not every explosive in the cluster actually explodes. 

So when the fighting is done you can be left with a field littered with live explosives.

On the other hand, Russia has seeded Ukraine with so many land mines that the threat of dormant cluster bombs is pretty mild by comparison. 

Russia has buried 1.1 land mine per square meter across its defensive front. So if you have a 100 square meters, you’ll find something like 110 land mines in it. 

That’s why the Ukrainian counteroffensive has been so sluggish. They were literally tiptoeing through minefields before cluster bombs helped blow them up.

Regardless, the level of ammunition that’s been expended over the past year and a half is astounding. And the side that can best keep up with demand will likely win out over time.

But while Vladimir Putin is begging Kim Jong Un for mortars, Volodymyr Zelenskyy has a higher-quality benefactor in the United States.

On Wednesday, the Pentagon announced it’d be sending another $175 million worth of military aid Ukraine’s way. 

It’s quite a bundle — one that includes ammunition for High-Mobility Artillery Rocket Systems (HIMARS) and Abrams tanks that were sent over earlier this year.

There’s also been a concerted effort to ramp up munitions production, which is a lot easier when you have a network of capable allies, as opposed to economic sanctions.

The Army recently announced plans to manufacture more than 1 million artillery shells per year by 2025.

That’s big news for General Dynamics (NYSE: GD), in particular. 

GD makes 155 mm artillery shells, as well as key propellant and propulsion chemicals like ball powder propellants and artillery propelling charges.

It makes shells at its Ordnance and Tactical Systems facility in Wilkes-Barre, Pennsylvania, and it fills them at a government facility in Iowa.

And now the Army is collaborating with GD on another manufacturing facility in Garland, Texas.

Meanwhile, Lockheed Martin (NYSE: LMT) and RTX (NYSE: RTX) are set to build a Javelin plant in Poland. 

Indeed, the Javelin anti-tank missile was widely lauded for its effectiveness in neutralizing Russian armor battalions at the war’s outset.

Now everybody wants them. 

Beyond that, Lockheed Martin also builds Black Hawk helicopters in Poland. 

It assembles F-35s in Italy and Japan and recently announced a deal that will see Rheinmetall manufacture fuselages for the stealth fighters in Germany.

So there’s a massive build-out going on, and investors should act accordingly.

However, if you really want to profit from the most advanced military and defense technology, you should check out Secret Stock Files.

I cover all the most cutting-edge stuff there.

Fight on,

Jason Simpkins

@OCSimpkins on Twitter

Jason Simpkins is Assistant Managing Editor of the Outsider Club and Investment Director of Wall Street's Proving Ground, a financial advisory focused on security companies and defense contractors. For more on Jason, check out his editor's page. 

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