There's no shortage of geopolitical tensions in the world - and military actions to combat them - but the reality is that global real-term defence spending has fallen in each of the past three years. In response to austerity measures introduced by governments in the western world, many companies serving the sector have been hard at work restructuring their operations; including branching into niche growth markets or simply cutting costs to keep profit margins steady. Those initiatives, together with the added allure of share buybacks, have pushed valuations up from about 10 times forecast earnings in 2012 to around the 15 mark today.
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