Saab AB: Incoming New Dynamics Capacity Will Lead To Scalable Growth, Margin Improvements

Valkyrie Trading Society Investing Group Leader Follow Summary Saab AB benefits from heightened European defense demand, NATO accession, and a strong backlog. Significant capacity expansions in dynamics, especially for NLAW, support scalable growth and margin improvement as automation increases. Big orders in naval should turn around segment margins, and the Gripen continues to gain traction as a more budget option but still a capable platform. The dynamics and surveillance revenue mix lift is also lifting group gross margins. The company is delivering ahead of peers in terms of sales CAGR, and the scope for margin lift is pretty significant, but this is reflected in a premium-to-comp multiple. Looking for a helping hand in the market? Members of The Value Lab get exclusive ideas and guidance to navigate any climate. Learn More » guvendemir/iStock Unreleased via Getty Images Saab AB ( SAABF )( SAABY ) continues to be an interesting pick in the defense spread, and it has indeed benefited in these past years as part of the more polarised European picture, including after This article was written by Valkyrie Trading Society 5.6K Followers Follow The Valkyrie Trading Society is a team of analysts sharing high conviction and obscure developed market ideas that are downside limited and likely to generate non-correlated and outsized returns in the context of the current economic environment and forces. They are long-only investors.They lead the investing group The Value Lab where they offer members a portfolio with real time updates, chat to answer questions 24/7, regular global market news reports, feedback on member stock ideas, new trades monthly, quarterly earnings write-ups, and daily macro opinions. Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.