Israel has a radical new ballistic-missile defense system, known as the Iron Dome, and it has saved countless lives during the last couple of weeks.
The Iron Dome is not a literal “protective bubble” set up over a city.
But it might as well be…
This portable system is made up of three components: 1) a detection and tracking radar system, 2) the Battle Management & Weapon Control (BMC) – basically a computer control center – and 3) units that fire missiles.
The radar detects incoming missiles and tracks their trajectories. Then, using this data, the BMC calculates where the missiles will likely hit and determines whether they pose a threat – and only then does the firing unit launch an interceptor (also a missile). In this way, they take out the incoming rockets in midair, where it’s safe to do so, far before they can reach their target on the ground below.
This is no easy feat. Think of standing in a field with a bow and arrow and trying to shoot down another arrow launched from a few hundred yards away. What’s more, the system can handle multiple threats simultaneously and works in any kind of weather (day or night).
Designing something that complex boggles the mind, as does the fact that it works so well. Thanks to an unending stream of breakthroughs in computing, sensors, radar, software, and guidance systems, we’re at the point where one “arrow” can now shoot down another in a matter of seconds.
The Iron Dome is a clear game-changer in defense technology.
Indeed, the system is getting rave reviews in the U.S. media. In the last few days, both the Washington Post and Wall Street Journal have published long, detailed accounts of the Iron Dome’s great success rate at destroying missiles during this latest conflict in Israel and the Gaza strip.
The Dome showed an amazing success rate. Before last Wednesday’s cease-fire, it knocked down 421 rockets launched from Gaza and bound for Israeli cities. We’re talking a rocket “kill” ratio of 84%.
With the Iron Dome intercepting Hamas missiles left and right, Israel suffered only six casualties in seven days of rocket strikes.
Thing is, ballistic missile defense is not just a big deal in the Middle East. It’s a big deal here in the U.S., too.
And right now, I’ve got my eye on a firm that’s playing a big role in America’s ballistic-missile defense (BMD) technology. It’s a small-cap firm, so don’t worry if you haven’t heard of it. Most people don’t even know the Pentagon is hard at work in this area. But there’s a very good reason for investors to know about it.
Let’s put this investment opportunity in context…
As it turns out, Obama gave the green light to have the U.S. spend some $275 million on the system since 2010, according to The Wall Street Journal. In the hopes of forging a peace deal, the president wants to reduce the rocket threat to Israel, while getting that nation to agree to give back some captured territory.
By just about any standard, the system has been a godsend. And not just for Israel, but for the U.S. and the balance of power in the Middle East.
It’s important to note that Israel is still a long way from shooting down the kind of complex missile that a nuclear-armed Iran would fire their way.
But trust me, they’re working on it…
For now, Israel has proved that ballistic missile defense works well in decisive combat settings. And that’s a good thing for investors. See, defense contractors make guidance systems and other types of tech needed to have one missile shoot down another.
Now you know why the U.S. is investing in ballistic missile defense. One of the big wins here is for the Navy. Many of its ships will get equipped with the Aegis Ballistic Missile Defense system.
But I know of a small-cap defense firm that counts the Navy as a major client and also has BMD sales. Because much of the effort remains classified, the firm hasn’t made all of its work public.
And yet, this company is a contract machine. It already has $1.1 billion in firm defense orders, meaning it will ring up nearly every dollar of those awards. It also has a pipeline of bids worth about $5 billion that should convert to about $1.5 billion in future revenue.
Meanwhile, this firm has a market cap of only $260 million and trades at less than $5 a share.
I will have much more to say about this area of high-tech defense in my webinar that airs tomorrow evening at 7 p.m. EST. You can still reserve your place right here. In particular, I’ll be talking about a novel part of missile defense known as directed energy.
This is fascinating stuff, and I’m passionate about this sector. I hope you’ll join me.
P.S. Keep an eye out for November’s Fascinations of the Month on Friday. You won’t want to miss this one.