Profit From Anarchy With These 7 Military Defense Stocks

Defense Stock #1 -
Sturm Ruger & Co. (RGR)

For almost 60 years, Sturm Ruger & Co. (RGR) has been one of the nation's leading manufacturers of high-quality firearms. Ruger guns include pistols, revolvers, rifles and shotguns. RGR produces products for both the commercial and military markets.

This gun stock is seeing booming sales right now — and not just from the military. In 2004, a comprehensive weapons ban passed under the Clinton administration expired because it couldn't find support in Washington. But with a Democratic majority and Barack Obama as president, many fear the ban will be reinstated. The result is a rush to snatch up guns that could be prohibited soon. That means massive sales for Sturm Ruger and big profits for investors.

Defense Stock #2 -
DynCorp (DCP)

DynCorp (DCP) works behind the scenes to support the U.S. military and diplomatic efforts on the front lines. Its contracts with the government to train police officers overseas are the company's biggest source of business, second only to interpreting and translating services. The Department of State and the U.S. Department of Defense are DynCorp's largest customers — meaning DCP's revenue stream isn't impacted by weak consumer spending.

One of the biggest challenges in Afghanistan involves training and equipping local police and soldiers to make the country self-sufficient. DynCorp has an active role in nation-building undertakings like this and is seeing revenues soar as a result.

Defense Stock #3 -
Emergent Biosolutions (EBS)

Emergent Biosolutions (EBS) develops drugs that treat or protect against infectious diseases and bio-agents such as typhoid, strep and hepatitis. But most importantly, Emergent is the U.S. government's only supplier of BioThrax, an FDA-approved anthrax vaccine.

In the last 10 years, the company has sold 30 million dosages. And with rising tensions around the world, it looks like even more vaccines could be ordered in the future. In the past year alone, Emergent has signed two large contracts with the departments of Defense and Health and Human Services to deliver more than 33 million additional dosages of the BioThrax vaccine over the NEXT three years. The government's long term commitment to anthrax vaccines means guaranteed money for Emergent… and shareholders!

Defense Stock #4 -
Smith & Wesson (SWHC)

Smith & Wesson (SWHC) was founded in 1852 and is famous for its revolvers, most notably Dirty Harry's .44-caliber pistol. With more Americans out of work or losing their homes, people are more concerned with self-defense than ever before. That makes an iconic handgun company like SWHC a great buy, as pistol sales soar.

The FBI recently released numbers showing the number of background checks for firearms surged 12% over last year. Background checks are a good gauge of sales, since they are the first hoop most prospective gun owners must jump through. What's more, the number of guns actually sold is likely higher due to private transfers and gun show "loopholes" excluded from the survey. Smith & Wesson is primed to really cash in from this peaking demand.

Defense Stock #5 -
Elbit Systems (ESLT)

Israel's Elbit Systems (ESLT) is the driving force behind the military of this Middle Eastern country. ESLT supplies defense electronics for military operations on land, water and air. The company's contracts include work on such iconic war machines as the F-15 and F-16 fighters, the Comanche helicopter and the Bradley Fighting Vehicle. Its products also include helmet-mounted vision systems, weapon navigation systems and unmanned airborne vehicles.

Israel and the U.S. account for more than one-third of the company's sales. And with Iran making a fuss over its pursuit of nuclear weapons, it stands to reason that Israel will be ramping up its military spending in response. That makes ESLT a great buy right now.

Defense Stock #6 -
ArcSight (ARST)

Modern threats don't have to come from a gun or a bomb. Digital security is increasingly important as hackers and computer viruses continue to get more aggressive in the 21st century.

That's what makes ArcSight (ARST) such a great buy right now. This software company helps protect businesses through digital security and virus safeguards. ArcSight counts Cisco Systems, IBM and McAfee among its strategic partners in digital security, showing that this is no bargain-basement software program. Those Fortune 500 companies wouldn't leave their network security to just anyone.

ArcSight is an industry leader in digital security and a great buy right now.

Defense Stock #7 -
Cubic Corp. (CUB)

Cubic Corp. (CUB) engages in the design and production of defense electronics that include military optical systems, firearm simulation programs, communications gear and surveillance equipment. It also offers services to the military that include mission support, computer simulation training and field maintenance.

In today's high-tech military, Cubic is a key player in making sure that our troops stay in touch with each other and with their commanders. The company also helps prepare the military before deployment into harm's way to ensure our soldiers get the very best training before they put their lives on the line. CUB is a great buy as Obama considers ramping up engagement in Afghanistan.