# ⚔️ WARTIME STOCK PICKS — April 26, 2026
## Sector-Specific Picks Following Scoring Criteria

**Strategy:** Sector rotation into wartime winners (Defense, Energy, Gold/Silver, Uranium)  
**Avoid:** Broad S&P/NASDAQ, Airlines, Consumer Discretionary, Financials  

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## OUR SCORING SYSTEM (20 points max)

| Factor | Max Points | Quick Summary |
|--------|-----------|---------------|
| Valuation | 3 pts | PE, Forward PE, PEG |
| Quality (Profitability) | 2 pts | ROE, Net Margin |
| Growth | 2 pts | Revenue & Earnings growth |
| Financial Health | 1.5 pts | Current Ratio, Debt/Equity |
| Dividend | 1.5 pts | Yield, Payout ratio |
| Trend/MAs | 3 pts | vs 50DMA & 200DMA |
| Momentum | 2 pts | % from 52wk high |
| Sweet Zone | 2 pts | 30-70% of 52wk range |
| Volume/Accumulation | 2 pts | Volume ratio, institutional |
| Institutional/Insider | 1 pt | Inst % & insider % |
| **Stage 2 Bonuses** | +varies | Accumulation, Congress, MA50 slope |

**Verdicts:** 15-20 Strong Buy | 11-14 Conditional Buy | 8-10 Watchlist  
**Max 2 stocks per sector | Max 5% position | TP1: +15%, TP2: +25%, TP3: +40%**

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## 🛡️ DEFENSE / AEROSPACE

### 1. BAE Systems (BA.L) — 🇬🇧 LSE — **STRONG BUY CANDIDATE**
- **Price:** ~£18.50 | **MCap:** ~£30B
- **P/E:** ~20 | **Forward P/E:** ~17 | **Div Yield:** ~2.8%
- **1-Year Return:** +48% | **YTD:** +15%
- **Why:** Purest NATO rearmament play. 23/32 NATO members now at 2% GDP spending. BAE wins from European defence budgets, F-35 components, Typhoon, naval ships, cyber. UK-listed = no FX hassle.
- **Catalysts:** European defence spending surge, Ukraine reconstruction, UK nuclear submarines, AUKUS pact
- **Risk:** Moderate valuation (not cheap), US budget uncertainty

### 2. Rolls-Royce Holdings (RR.L) — 🇬🇧 LSE — **CONDITIONAL BUY**
- **Price:** ~£7.80 | **MCap:** ~£26B
- **P/E:** ~25 (compressing fast) | **Forward P/E:** ~18 | **Div Yield:** ~1.5% (restored 2024)
- **1-Year Return:** +52% | **YTD:** +20%
- **Why:** Transformation story under Tufan Erginbilgiç — margins improving from 2% to 13%+. Defence contracts (submarine reactors, military engines), civil aerospace recovery, SMR nuclear. Defence division growing with European rearmament.
- **Catalysts:** Margin expansion continues, European defence contracts, submarine programme ramp
- **Risk:** Still mid-turnaround, debt leverage, execution risk

### 3. RTX Corporation (RTX) — 🇺🇸 NYSE — **CONDITIONAL BUY**
- **Price:** ~$183 | **MCap:** ~$137B
- **P/E:** ~24 | **Forward P/E:** ~20 | **Div Yield:** ~1.8%
- **1-Year Return:** +61% | **YTD:** +5%
- **Why:** Patriot missile defence (dominant system), Tomahawk cruise missiles, Pratt & Whitney engines, Collins aerospace. Will benefit from US DAWG $54.6B autonomous warfare budget. Iran war = Patriot demand surge.
- **Catalysts:** Patriot orders from NATO allies, DAWG drone program, missile defence replenishment
- **Risk:** Large cap (slower growth), some acquisition risk

### 4. Kratos Defense (KTOS) — 🇺🇸 NASDAQ — **SPECULATIVE BUY**
- **Price:** ~$28 | **MCap:** ~$4B
- **P/E:** N/A (near breakeven) | **Forward P/E:** ~40
- **1-Year Return:** +15% | **YTD:** -5%
- **Why:** DIRECT drone warfare play. Makes tactical UAVs (Valkyrie loyal wingman drone, target drones). Positioned for the DAWG $54.6B spend. Small company = massive upside if drone orders flow.
- **Catalysts:** DAWG contract awards, loyal wingman drone orders, Valkyrie production
- **Risk:** Not profitable yet, small cap volatility, contract dependency

### 5. AeroVironment (AVAV) — 🇺🇸 NASDAQ — **CONDITIONAL BUY**
- **Price:** ~$220 | **MCap:** ~$6B
- **P/E:** ~60 | **Forward P/E:** ~35 | **Div Yield:** 0%
- **1-Year Return:** +40% | **YTD:** +25%
- **Why:** MAKES SWITCHBLADE loitering munitions — the most relevant product in the current war. Ukraine uses thousands. $6K-$50K per unit, disposable like ammunition. Direct beneficiary of Iran war and any conflict requiring loitering munitions.
- **Catalysts:** Switchblade orders, Puma drone orders, DAWG funding
- **Risk:** Rich valuation, no dividend, execution risk on ramp

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## 🛢️ ENERGY / OIL

### 6. BP (BP.L) — 🇬🇧 LSE — **CONDITIONAL BUY**
- **Price:** ~530p | **MCap:** ~£85B
- **P/E:** ~9 | **Forward P/E:** ~8 | **Div Yield:** ~5.5%
- **1-Year Return:** +18% | **YTD:** +8%
- **Why:** Classic wartime value play. P/E under 10, div yield 5.5%, benefits directly from Hormuz disruption and $95+ oil. North Sea production, major LNG presence. UK-listed = no FX issues.
- **Catalysts:** Oil above $90, Iran/Hormuz keeps prices elevated, LNG expansion
- **Risk:** Energy transition overhang, debt reduction slower than Shell, legal liabilities

### 7. Shell (SHEL.L) — 🇬🇧 LSE — **STRONG BUY CANDIDATE**
- **Price:** ~£29 | **MCap:** ~£200B
- **P/E:** ~11 | **Forward P/E:** ~9 | **Div Yield:** ~4.0%
- **1-Year Return:** +22% | **YTD:** +12%
- **Why:** Best-in-class integrated energy. LNG leader (critical for Europe's energy independence from Russia). Trading arm profits surge in volatile markets. Debt-to-equity falling. Buybacks of $3.5B/quarter.
- **Catalysts:** LNG demand surge, Hormuz disruption, share buybacks, dividend growth
- **Risk:** Energy transition risk long-term, but wartime = peak earnings

### 8. Harbour Energy (HBR.L) — 🇬🇧 LSE — **SPECULATIVE BUY**
- **Price:** ~270p | **MCap:** ~£2.5B
- **P/E:** ~6 | **Forward P/E:** ~5 | **Div Yield:** ~4%
- **Why:** UK North Sea pure-play. Lowest P/E in the sector. Benefits from Sterling's North Sea policy + UK energy security mandate. Small = leveraged to oil price.
- **Catalysts:** North Sea production expansion, oil price upside
- **Risk:** Small cap, North Sea regulatory risk, production decline curves

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## ☢️ URANIUM / NUCLEAR

### 9. Cameco (CCO.TO / CCJ) — 🇨🇦 TSX / 🇺🇸 NYSE — **CONDITIONAL BUY**
- **Price:** ~C$72 / ~$52 | **MCap:** ~$23B
- **P/E:** ~55 | **Forward P/E:** ~30 | **Div Yield:** ~0.2%
- **1-Year Return:** +136% (with URA) | **YTD:** ~+10%
- **Why:** World's largest publicly traded uranium company. Nuclear renaissance = more reactors = more uranium demand. 30+ countries planning nuclear expansion for energy security. Westinghouse acquisition = now in reactor business too.
- **Catalysts:** Nuclear renaissance (energy security), long-term contract renewals at higher prices, reactor build-outs
- **Risk:** Rich P/E, uranium price volatility, execution risk on Westinghouse

### 10. Yellow Cake (YCA.L) — 🇬🇧 LSE — **SPECULATIVE BUY**
- **Price:** ~£9.50 | **MCap:** ~£1.8B
- **P/E:** N/A (holding company) | **Div Yield:** 0%
- **Why:** UK-listed uranium holding company — literally just holds physical uranium (U3O8). Pure uranium price play. UK-listed, simple, no mining risk. If uranium goes up, YCA goes up 1:1.
- **Catalysts:** Uranium price appreciation, nuclear energy security narrative
- **Risk:** No yield, pure commodity price risk, limited liquidity

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## 🥇 GOLD & SILVER MINERS

### 11. Fresnillo (FRES.L) — 🇬🇧 LSE — **CONDITIONAL BUY**
- **Price:** ~£10.50 | **MCap:** ~£8B
- **P/E:** ~22 | **Forward P/E:** ~16 | **Div Yield:** ~2.5%
- **1-Year Return:** +60%+ | **YTD:** +10%
- **Why:** World's largest primary silver producer + significant gold. Dual beneficiary of gold at $4,776 AND silver at $76. UK-listed. Mexican operations. Margins expanding with metal prices.
- **Catalysts:** Silver outperforming gold in war/inflation, gold at ATH, production growth
- **Risk:** Mexican political risk (mining law changes), operational disruptions

### 12. Endeavour Mining (EDV.L) — 🇬🇧 LSE — **CONDITIONAL BUY**
- **Price:** ~£22 | **MCap:** ~£5.5B
- **P/E:** ~10 | **Forward P/E:** ~8 | **Div Yield:** ~3%
- **Why:** TOP-TIER VALUE. P/E of 10 with gold at $4,776 = massive margin expansion. West Africa's leading gold producer. Free cash flow surging. Div yield 3% with room to grow.
- **Catalysts:** Gold price sustained above $4,500, production growth, dividend increases
- **Risk:** West African political risk (Mali, Senegal), operational complexity

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## 📊 RANKED BY SCORING LIKELIHOOD

Based on our scoring criteria (20-point system), here's how they'd likely score:

| Rank | Stock | Sector | Est. Score | Verdict | Priority |
|------|-------|--------|-----------|---------|----------|
| 1 | **Shell (SHEL.L)** | Energy | 14-15 | Strong Buy | ⭐⭐⭐ |
| 2 | **BAE Systems (BA.L)** | Defence | 13-14 | Conditional Buy | ⭐⭐⭐ |
| 3 | **Endeavour Mining (EDV.L)** | Gold | 13-14 | Conditional Buy | ⭐⭐⭐ |
| 4 | **BP (BP.L)** | Energy | 12-13 | Conditional Buy | ⭐⭐ |
| 5 | **RTX (RTX)** | Defence | 12-13 | Conditional Buy | ⭐⭐ |
| 6 | **Fresnillo (FRES.L)** | Silver/Gold | 11-12 | Conditional Buy | ⭐⭐ |
| 7 | **Rolls-Royce (RR.L)** | Defence | 10-12 | Watchlist/Cond Buy | ⭐ |
| 8 | **AeroVironment (AVAV)** | Drones | 9-11 | Watchlist | ⭐ |
| 9 | **Cameco (CCJ)** | Uranium | 8-10 | Watchlist | ⭐ |
| 10 | **Kratos (KTOS)** | Drones | 7-9 | Speculative | ⚠️ |
| 11 | **Yellow Cake (YCA.L)** | Uranium | 6-8 | Speculative | ⚠️ |
| 12 | **Harbour Energy (HBR.L)** | Energy | 7-9 | Speculative | ⚠️ |

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## 💼 SUGGESTED PORTFOLIO ALLOCATION

**Based on wartime sector rotation strategy, scoring criteria, and max 2 per sector:**

### Core Positions (70% of invested capital)
| Stock | Sector | Allocation | Entry Strategy |
|-------|--------|-----------|---------------|
| **Shell (SHEL.L)** | Energy | 15% | 50% now, 30% on pullback to 200DMA, 20% on breakout |
| **BAE Systems (BA.L)** | Defence | 12% | 50% now, 30% on confirmation, 20% on breakout |
| **Endeavour Mining (EDV.L)** | Gold | 12% | 50% now, 30% on pullback, 20% on breakout |
| **BP (BP.L)** | Energy | 10% | 50% now, add on Hormuz escalation |
| **RTX (RTX)** | Defence | 10% | 50% now, 30% on pullback, 20% on breakout |
| **Fresnillo (FRES.L)** | Silver/Gold | 6% | 50% now, 50% on silver breakout above $80 |
| **Rolls-Royce (RR.L)** | Defence | 5% | Watchlist → buy if score ≥ 11 on next screen |

### Speculative Positions (15% of invested capital)
| Stock | Sector | Allocation | Entry Strategy |
|-------|--------|-----------|---------------|
| **AeroVironment (AVAV)** | Drones | 5% | Small position, add on DAWG contract news |
| **Cameco (CCJ)** | Uranium | 5% | Small position, add on uranium price breakouts |
| **Yellow Cake (YCA.L)** | Uranium | 5% | Pure uranium play, add on nuclear news |

### Cash Reserve (15%)
- Hold for DCA on pullbacks or new opportunities
- Deploy if S&P drops 15%+ into broad market

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## ⚠️ RISK WARNINGS

1. **War escalation risk:** If Hormuz fully closes, oil could spike $120-150 → energy stocks MOON but everything else crashes temporarily
2. **Ceasefire risk:** If Iran ceasefire holds, oil drops $20-30 → energy stocks pull back 15-20%
3. **NATO fracture:** If US exits NATO, European defence stocks could reprice — both risk and opportunity
4. **Valuation:** Some defence stocks (AVAV, RR) are priced for perfection
5. **UK-specific risk:** 4 UK-listed picks = Sterling/FX exposure. If GBP weakens, these benefit further
6. **Max 2 per sector rule:** We're bending slightly with 3 defence picks (BA, RTX, RR) — treat RR as Watchlist, only upgrade if score confirms

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*Report compiled: April 26, 2026 | Skippy Research Division*
*Next step: Run these through the stock screener for exact scores before buying*