War Babies

DEFINITION of 'War Babies'

A name given to securities in companies that are defense contractors. These securities are called war babies because they are viewed as securities of firms that produce the majority of their revenues from war-time circumstances, including firms that operate in security and defense sectors. Also known as "defense stocks."

BREAKING DOWN 'War Babies'

An example of securities from firms that would be described as war babies are companies that build aircrafts and ammunition. When a war is imminent, these stocks tend to outperform the market because of the potential for increased business and national defense contracts and revenues.

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RELATED FAQS
  1. What other sectors besides utilities are known as defensive?

    See why certain sectors, other than utilities, are considered defensive and therefore more resistant to the downturns of ... Read Answer >>
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    Utility stocks are known as defensive stocks for investors due to the fact that consumer demand will remain high even when ... Read Answer >>
  3. What are defensive stocks?

    The term defensive stocks is synonymous to non-cyclical stocks, or companies whose business performance and sales are not ... Read Answer >>
  4. What are the most popular ETFs that track the aerospace sector?

    Learn more about the risks involved with investing in the aerospace and defense industry. Find out more about popular exchange-traded ... Read Answer >>
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    All the events and news that happen around the world can have a great impact on the stock market. Very often, if a war breaks ... Read Answer >>
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