Jeff Yastine Blog | Buy This Navy SEAL-Approved Investment | Talkmarkets - Page 2
Editor, Total Wealth Insider
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Jeff “JL” Yastine is the editor of Total Wealth Insider. He first joined Banyan Hill Publishing as editorial director in 2015, bringing with him more than two decades of experience as a stock market investor and financial journalist at the center of financial world ... more

Buy This Navy SEAL-Approved Investment

Date: Wednesday, November 1, 2017 3:51 PM EDT

The U.S. Air Force recently finished testing the A-29 against competitor planes from L3 Technologies and Air Tractor in New Mexico, and at Edwards Air Force Base in California.

At stake is a potential $1.2 billion in spending, authorized in the proposed U.S. defense budget for “a fleet of light attack/observation aircraft.”

Embraer has been laying the groundwork for a long time, having opened an assembly plant in Jacksonville, Florida, in 2013, in partnership with U.S.-based Sierra Nevada Corp. so it could get in line for the Pentagon “Buy American” procurement contracts.

Sophisticated Weaponry

At only $10 million a plane for the basic version, the A-29 Super Tucano has already proven popular with other militaries that need a plane that can drop sophisticated weaponry — without paying a sophisticated price tag for the delivery vehicle.

Nigeria recently purchased $600 million worth of the planes for use in fighting the Boko Haram militant group. Lebanon has a $460 million contract for the delivery of six modified Super Tucanos. And while the U.S. Air Force hasn’t rendered a decision on its “Light Attack Experiment” flight tests this summer, Afghanistan’s air force already owns more than two dozen of the planes, purchased at the behest of U.S. advisors.

Embraer (NYSE: ERJ)

Embraer is also readying another plane — the KC-390, an $87 million twin-engine jet transport plane that can haul soldiers or military freight, or serve as an airborne refueling tanker.

The plane is still undergoing prototype testing, but Brazil’s air force has already signed a contract to buy more than two dozen KC-390s, while Portugal’s military is in negotiations to buy five of the planes as well.

The aircraft is designed to compete against Lockheed Martin’s venerable propeller-driven C-130 Hercules. Over 2,500 C-130s have been purchased by Western militaries, but with the average C-130 airframe now more than 30 years old, Embraer is betting that more countries will devote substantial budgets to refitting their fleets.

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