Munger Mode rating: 2 out of 5 — Sell. Our own rating from the research report below, on business quality first: moat durability and management, with price separating the top three.
We have spent our lives looking for businesses that can raise prices without losing customers, that earn high returns on capital without begging anyone's permission, and that compound owner earnings decade after decade. Lockheed Martin is a magnificent institution and an average investment. It possesses one of the most visually impressive fortresses in American industry — sole-source positions on programs that will run into the 2070s, a $230 billion backlog, security clearances no entrant can replicate. But look closer and you find the fortress belongs to the customer. The U.S. government is a monopsonist that audits Lockheed's costs, negotiates its margins down to roughly 11%, forces it to bear unlimited downside on fixed-price development work, and captures nearly all the surplus the moat generates.
Recent filings analysed: 8-K (2026-07-23), 10-Q (2026-07-23), 8-K (2026-05-13), 8-K (2026-04-23).
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