Lockheed Martin is trading around all time highs after a strong run, driven by higher defense spending expectations and renewed geopolitical risk. Structurally, the business looks solid with a large backlog, long term government contracts, and strong cash generation. Defense budgets also seem likely to remain elevated regardless of the political cycle.
That said, growth is still modest, margins remain under pressure from program execution issues, and a lot of the recent upside appears to be driven by headlines. At current levels, the stock is no longer obviously cheap on a value basis, and future returns may depend more on sustained geopolitical tension than on fundamentals.
I am up about 25% and hold a large position relative to my portfolio. I like the business and would prefer to own it long term, but the level of concentration is making me uncomfortable. Given the stock is close to all-time highs, I am considering trimming 20–30% of the position to reduce exposure while keeping a core holding for the long term.
Curious how other value-oriented investors think about trimming strong performers versus holding through cycles when valuation and position size start to matter more than conviction.