What are 155mm howitzer shells and why are they important?

155mm howitzer shells are standard artillery ammunition used by NATO countries. They're fired from artillery guns called howitzers and are crucial for ground combat operations. The Ukraine conflict has highlighted their importance as artillery has played a major role in the war, with both sides firing thousands of shells daily. This has depleted Western stockpiles and created urgent demand for increased production capacity.

Why is Poland investing so much in artillery production?

Poland is investing $663 million to quintuple its artillery shell production for several reasons: it borders Ukraine and feels directly threatened by potential Russian aggression; NATO countries have depleted ammunition stocks by supporting Ukraine; and Poland wants greater self-sufficiency in defense. This investment creates new manufacturing capacity and reduces dependency on other suppliers while strengthening NATO's eastern flank.

How does this investment theme differ from general defense stocks?

This investment theme is more targeted than general defense stocks because it focuses specifically on companies involved in artillery production and the supporting supply chain. It includes not just major defense contractors, but also companies providing raw materials, components, propellants, and targeting systems specifically for artillery. This offers investors focused exposure to a specific area of defense spending that's seeing rapid growth due to the Ukraine conflict.

What does "rearmament" mean in the investment context?

Rearmament refers to the process of rebuilding and expanding military capabilities, typically through increased defense spending. In investment terms, it represents a long-term trend of higher government spending on weapons systems, ammunition, and military equipment. This creates sustainable revenue growth opportunities for defense companies as countries like Poland and other NATO members commit to multi-year procurement programs to restore depleted stockpiles and modernize their forces.

What are propellants and why are they mentioned with these stocks?

Propellants are the materials that create the explosive force needed to fire artillery shells from guns. They're a critical component in ammunition manufacturing that requires specialized chemical expertise to produce. Several companies in this stock group specialize in propellants and energetic materials. As artillery shell production increases, demand for these specialized chemicals also rises significantly, creating business opportunities throughout the supply chain.

16 handpicked stocks

Poland's Artillery Ambition

Poland is investing $663 million to dramatically increase production of artillery shells, creating ripple effects across the defense industry. These carefully selected stocks represent companies throughout the supply chain poised to benefit from this strategic shift in defense spending.

Han Tan | Market Analyst

Updated 2 days ago | Published at जुलाई 1