"Even in a nasty recession some firms generate consistent earnings," says Stephen Leeb, who looks to Argon ST (NASDAQ:STST), a defense stock, in The Complete Investor.

"Adjusting to changing threats, the Pentagon will be focusing less on traditional weapons systems and more on the ability to fight unconventional enemy forces through the use of unmanned drones and satellites for intelligence gathering, surveillance, and reconnaissance.

"One likely beneficiary of this shift is Argon ST. Argon specializes in surveillance and reconnaissance systems used by U.S. and its allies’ military and intelligence customers.

"The company’s signals intercept and processing systems are software-based and can be run on commonly available receivers, computers, and workstations.

"A competitive advantage is that these cost-effective systems offer wide-ranging capabilities and high reliability and can be readily upgraded.

"The company has been awarded several contracts, while platform upgrades along with new programs—especially ones focused on airborne signals intelligence such as the Aerial Common Sensor—should ensure solid long-term growth of better than 15% a year for the next several years."
 

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