Israeli defense company Elbit Systems Ltd. last month announced that demand from Asia and Latin America has pushed its backlog of orders to $6.3 billion by last December, an 8 percent hike from 2013, Bloomberg reported.
The stock has climbed another 13 percent since, peaking at $74.55 in NY April 7.
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The U.S. accounted for 28 percent Elbit’s of sales last year, making it the company’s biggest single country in demand, including Israel, according to Bloomberg. But Elbit’s other business is in in emerging markets, with niche products and services like improving aircraft and cyberwarfare systems.
Last year marked the firsat time Elbit’s combined sales in Asia and South America surpassed sales in the U.S., and the company expects defense spending in the Asia-Pacific region to grow five percent annually, to reach $820 billion between 2014 and 2018, compared with 0.2 percent growth in North America.
And then there are the drones.
Elbit CFO Yossi Gaspar told investors in a mid-March conference call that demand for drones, homeland security and electronic warfare systems from Latin America and land fire control systems from Asia is pushing these two areas’ share of company revenue.
“They’re gaining traction in what is the biggest growth market for defense spending, ” Bruce Schoenfeld, who brokers investments in Israeli companies, told Bloomberg. “It’s reasonably valued and they operate in the sweet spot.”
The Haifa-based Elbit’s rise has been supported by the Bank of Israel intervention, starting last summer, to depreciate the Israeli shekel, bringing its value down to about 4 shekels to the dollar.