National Guard activations in 2020 climbed amid crises and a fatal F-16 crash that remains under investigation, but stocks keep soaring anyway after recovering from an early-year market drop.
The National Guard activations in 2020 surged in response to the COVID-19 pandemic, destructive hurricanes, devastating wildfires and civil disturbances in cities across the country. However, investors still found reason to look months ahead to when the crises of 2020 might end to justify bidding up many stocks and taking them to record highs.
The National Guard’s historic homeland service is highlighted by its members logging more than 8.4 million days on active duty in their communities during fiscal year 2020 ended Sept. 30. Whether on the front lines of the COVID-19 pandemic, aiding in hurricane recoveries, rescuing hundreds of people trapped by wildfires in the West, quelling record-high civil disturbances or deploying overseas, members of the Army and Air National Guard took visible roles in serving their fellow citizens.
Members of the National Guard, which celebrated its 384th anniversary on Dec. 13, keep providing significant homeland response contributions and its 2020 domestic operations helped to document what its spokesman Wayne Hall called “The Year of the National Guard.”
COVID-19 Pandemic Response Spurred Surge in National Guard Activations in 2020
While the pandemic response spanned most of 2020, National Guard members in 23 states and the District of Columbia were activated by the end of May to respond to civil unrest. Guard members primarily assisted local law enforcement and first responders, when needed.
By early June, more than 86,000 National Guard members were performing a record number of domestic missions by answering the call of their governors. It marked the largest activation for homeland service since Hurricane Katrina hit the Gulf Coast in 2005.
In early September, pilots and crew members with the California Army National Guard’s 40th Combat Aviation Brigade braved treacherous conditions to rescue nearly 400 people inside the Sierra National Forest. Limited visibility from the heavy smoke, while flying at night, turned the mission precarious.
A California Army National Guard UH-60 Black Hawk flies into heavy smoke at night to help rescue some of the 400-plus campers who were trapped by fire in California’s Sierra National Forest on Sept. 5.
Photo courtesy of the California National Guard.
National Guard Airman Makes the Ultimate Sacrifice on U.S. Soil
The National Guard basically is on the front line of service in the United States and faces danger and risk, even if not from enemy fire on battlefields in foreign lands. The ultimate sacrifice of one’s life can occur at any time and it did at about 8 p.m. on Dec. 8 for Capt. Durwood “Hawk” Jones, 37, of Albuquerque, New Mexico, a pilot in the 115th Fighter Wing of the Wisconsin Air National Guard.
He died when the F-16 jet he was flying on a training mission crashed in Michigan’s Upper Peninsula. Col. Bart Van Roo, commander of the 115th Fighter Wing, which is stationed at Truax Field Air National Guard Base, Madison, Wisconsin, announced after the accident that all flights from the unit would be grounded indefinitely. He voiced the need to look for the cause slowly and deliberately, then assess when it is safe to fly again. The investigation could take close to a year, he added.
Capt. Jones, survived by a wife and two young children, was a seasoned airman who joined the Air National Guard in 2011, graduated from its F-16 basic qualification training in 2015 and became a decorated combat veteran in deployments to Japan in 2015 and to Korea in 2017. He next deployed in 2019 to support Operation Freedom’s Sentinel to Afghanistan.
Capt. Durwood “Hawk” Jones Served as an F-16 Pilot in Afghanistan During 2019
More than 200 members of the Air National Guard’s 115th Fighter Wing and 378th Fighter Squadron return to Truax Field in Madison, Wisconsin, on November 9, 2019, after a four-month tour in Afghanistan supporting Operation Freedom Sentinel. Among them is Capt. Durwood “Hawk” Jones, who died December 8, 2020, when his F-16 crashed during routine nighttime flight training.
Photo courtesy of the Wisconsin National Guard.
Capt. Jones, who graduated from Northwestern University in 2005 with a degree in mathematics before joining the National Guard, received two Air Medals with combat “C” devices, which are awarded to individuals who personally have been exposed to hostile action or significant risk of hostile action.
Colorado Air National Guard Previously Found Cracks in F-16C Fighting Falcons
A fleet-wide investigation of F-16C Fighting Falcon aircraft already had been underway well before the Dec. 8 crash after the Colorado Air National Guard’s 140th Wing Aircraft Structural Maintenance and Non-Destructive Inspection section detected some slight cracks in the aircraft that could have catastrophic consequences.
Even minor cracks in an aircraft structure that are not visible to the naked eye can cause extensive damage and “possible loss of life,” if not detected and corrected early enough, Air Force Lt. Col. Jason Kneuer, 140th Aircraft Maintenance Squadron commander, said in an interview for the Colorado National Guard website.
In 2016, structural maintenance team members noticed a trend of loose or sheared fasteners on the bulkheads of F-16 aircraft where the wing attaches. Further inspection of all accessible areas of the bulkhead revealed additional cracks on two separate aircraft, indicating a possible fleet-wide issue. The flaw is regarded as a potential “safety-of-flight issue” and currently is one of the top priorities for the worldwide F-16 fleet, according to the Colorado National Guard.
The investigation has not announced any preliminary results from its initial probe of the Dec. 8 accident, but caution is likely to continue until the cause is determined and the aircraft are found to be safe to resume flying.
Louisiana Faced Unparalleled Need for National Guard Activations in 2020
The Louisiana National Guard faced an unprecedented year in 2020 between COVID-19 response efforts, its busiest hurricane season since 2005 and a series of overseas military deployments that combined for the largest emergency response effort in the state’s history. Its soldiers and airmen operated up some 25 medical testing sites and eight food banks, while also providing more than 300,000 COVID tests, packaging more than 21 million pounds of food and delivering more than 56 million items of personal protective equipment (PPE).
Storms ravaged Louisiana, with three tornadoes hitting Rapides Parish in April that caused nearly 600 loads of debris that the state’s National Guard cleared. The soldiers and airmen also packed more than 700 boxes of food a day for residents in need after the governor’s stay-at-home order.
Hurricane season started in June and required relief following hurricanes Laura, Delta and Zeta, as well as four named, but less severe storms, Cristobal, Marco, Sally and Beta. More than 400 generators were put into action; 5,745,937 meals served; 7,878,028 liters of water provided; 1,431,350 bags of ice and 267,431 tarps distributed; 439 people and 35 pets evacuated; and 2,662 miles of road and 210 municipal facilities cleared.
Louisiana Members Served Amid Hurricane Laura Among National Guard Activations in 2020
More than 3,000 members of the Louisiana National Guard responded to Hurricane Laura, the 10th-strongest U.S. hurricane landfall by wind speed on record. The storm killed 42 people in the United States and caused an estimated $14 billion in damages in southwestern Louisiana and southeastern Texas near the Gulf of Mexico.
The number of Louisiana National Guard members supporting COVID and hurricane relief efforts simultaneously topped 6,200 by the end of August 2020. In November, more than 2,000 members of the state’s National Guard deployed in support of Operation Spartan Shield, Operation Inherent Resolve, Operation Freedom’s Sentinel, Operation Atlantic Resolve, the European Deterrence Initiative and the Southwest Border Mission. Additional deployments by the 241st Military Public Affairs Detachment, the 1023rd Engineer Company, 922nd Engineer Company, and the 214th Engineering and Installation Squadron also occurred during 2020.
Some 2,000 members of the Louisiana National Guard take part in a deployment ceremony in Lafayette, Louisiana, Nov. 10, before heading to the Middle East to support U.S. Central Command operations.
Photo courtesy of Master Sgt. Toby Valadie and the Louisiana National Guard.
Buy Power Generator Stock, Advises Investment Guru and Former Army Paratrooper
“The must-own product, and the must-own stock, for any emergency that involves a power outage is Generac Holdings Inc. (NYSE:GNRC),” said Jim Woods, editor of Successful Investing and Intelligence Report, as well as the leader of the Bullseye Stock Trader advisory service.
The maker of standby generators for residential, industrial and commercial use is an earnings powerhouse, according to Woods, whose research shows that Generac’s earnings increases over the past several quarters and several years has put it in the top 6% of all publicly traded companies in terms of earnings per share (EPS) growth.
“If you want to prepare for an emergency, get a generator,” said Woods, who previously served as a U.S. Army infantryman and spent a number of years in the National Guard. “And if you want to make money in stocks, buy GNRC.”
GNRC shares were jumped 120.07% in 2020 through Dec. 29, topping the average return of 14.17% for its sector during the same time span.
Chart courtesy of www.stockcharts.com
The company’s price-to-earnings (P/E) ratio of 47.92, well above the P/E of 27.29 for its index, according to Morningstar. Investors need to be content with the company’s share price growth, since the stock currently does not pay a dividend.
Paul Dykewicz meets with former National Guard member Jim Woods before the COVID-19 crisis.
3M Looks Undervalued, Despite Strong Demand for Its Products Amid Emergencies
3M (NYSE:MMM) is a diversified manufacturer that produces many products that the National Guard uses or distributes in disasters, said Bob Carlson, chairman of the Board of Trustees of Virginia’s Fairfax County Employees’ Retirement System with more than $4 billion in assets. Carlson, who also heads the Retirement Watch investment newsletter, described 3M as an undervalued stock worth buying.
“3M’s performance was pretty good in 2020,” Carlson said. “Earnings will be down about 10% from 2019 and are likely to recover to 2019’s levels in 2021. But the stock’s price hasn’t matched its fundamental performance.”
The company’s stock is basically unchanged for 2020, putting it behind the S&P 500 and Dow Jones Industrial Average (DJIA), Carlson continued. The stock also is trading below the market P/E ratio, even though it usually trades at a 15% premium to the S&P 500, he added.
Pension fund Chairman Bob Carlson answers questions from Paul Dykewicz in an interview before social distancing became the norm after the COVID-19 outbreak.
“It’s a solid company that is performing well and benefits from disasters but is selling at a discount to the market,” Carlson consulted.
3M’s price-to-earnings (P/E) ratio of 20.38 trails the 27.29 of its index, according to Morningstar. Income investors should like the stock’s current dividend yield of 3.38%.
As Carlson counseled, 3M’s stock is up a modest 1.88% so far in 2020 through Dec. 29, compared to 14.17% for its sector and 20.43% for its index.
Chart courtesy of www.stockcharts.com
Water Purification and Home Battery Supply Stocks Are Buys, Money Manager Says
“Looking back at what turned into an unprecedented year for the Guard, all the pandemic response, civil unrest, fires and storms add up to one huge vote of confidence in American disaster resilience,” said Hilary Kramer, host of a national radio program, “Millionaire Maker,” and head of the GameChangers and Value Authority advisory services. “The world keeps throwing curve balls at our best laid plans. Together we recover and pick up where we left off.
“There will always be storms. There will always be fires. And every time in our history, we’ve had the will to rebuild bigger and better. For investors, 2020 was the perfect reminder that the shocks are part of the process. We don’t know where or how they’ll strike, but as long as the Guard and other recovery organizations are around, stocks will ultimately keep getting back to work.”
The past year showed that some of the stocks that revolved around accelerated Guard activity gained buzz because certain investors thought unsettled times would be “good for business,” Kramer commented. That outlook just did not pan out in some cases, with the stocks going nowhere, she added.
Chart courtesy of www.stockcharts.com
The lack of lift in those stocks revealed the long-term clockwork of provisioning emergency organizations in good years and bad, Kramer said. She mentioned still loving companies like CACI International Inc. (NASDAQ:CACI), which handles payroll for the National Guard, but due to its “dynamism across the disaster cycle,” not because of any particular headline, Kramer added.
“Instead, the stocks that do best when emergencies pile up are actually the ones that step in after the disaster to minimize the impact next time,” Kramer continued. “Out of all the companies we talked about this year in relation to the Guard, Hawkins Chemical Inc. (NASDAQ:HWKN) and Bloom Energy Corp. (NYSE:BE) were the clear winners. They don’t supply emergency organizations. But demand for their water purification products and home batteries accelerates every time families see a deployment on the news or feel the flood or fire firsthand. When they rebuild, they’ll have more resilient, next-generation plumbing and power. Find these companies and you’ll surf the storms in 2021 and beyond.”
Chart courtesy of www.stockcharts.com
Hawkins Chemical has a P/E of 20.38, below the 27.29 P/E of its index. The stock also offers a current dividend yield of 1.79% and is up 16.20% so far this year through Dec. 29, just below the average 17.92% gain of its sector and 20.01% return of its index through the same period.
Chart courtesy of www.stockcharts.com
Bloom Energy has a 52-week low of $3.00 and a high of $31.58 but it has tapered off recently to close at $27.82. It has an astronomical P/E of 526.32 and does not pay a dividend. Its share price has jumped 272.42% between the start of 2020 through Dec. 30. Its sector has a comparatively subpar return of 24.16%, while its index has an average return during the same time of 20.01%.
Cyberattacks Gain Attention of During National Guard Activations in 2020
In some states, National Guard units provided cyber help with election security during 2020. Cyberattacks, unfortunately, are becoming increasingly common and perpetrated by a hostile governments or non-governmental entities that can be anywhere in the world.
Cyber Shield 2020 provided cyber skills training for the National Guard that emphasized teamwork. Such drills help establish a framework for future responses to cyberattacks on critical infrastructure, communities, states and the country.
The COVID-19 pandemic has not prevented the rise of most cybersecurity stocks during 2020.
Space Mission Soars During Jump in National Guard Activations in 2020
The National Guard’s space mission also soared in 2020. Early in the year, the Counter Communications System Block 10.2, an electronic warfare system used by some Air National Guard units in support of the United States Space Force, achieved operating capability. The achievement highlights the Air Guard’s unique ability to tap civilian talent.
An advantage of the National Guard’s unique relationship of citizen-airmen working full-time in industry with mission partners allows the U.S. military to create a continuous feedback loop between system operators and contractors — providing an effective counter communications system. Examples are not a challenge to find.
In May, National Guard members in Alaska and Hawaii provided search and rescue support as NASA launched its first manned space mission since 2011. Further support of U.S. space operations is on the horizon.
National Guard Activations in 2020 Support American Homeland, Guard Spokesman Says
The investment that America has made to ensure the National Guard is ready for its warfighting mission is “paying dividends in our homeland response,” said Hall, a National Guard Bureau spokesman.
National Guard’s continuing “significant homeland response” missions in 2020 are led by its support of COVID-19 response efforts across the 50 states, three territories and the District of Columbia, Hall said. As of Nov. 26, 2020, the National Guard has been “instrumental” in its COVID-19 efforts by logging more than 6.9 million days in 2020 and sanitizing 2,300 facilities. Its other contributions include:
∙ 387 million masks, gloves, gowns and other personal protective equipment.
∙ 584 million meals packaged, served or delivered by Guard members.
∙ 9.3 million people tested or screened for COVID-19 virus by Guard members.
Col. Roy Bassett, state surgeon for the Florida National Guard, receives his first round of the COVID-19 vaccination at Camp Blanding Joint Training Center on Wednesday, Dec. 23. Photo courtesy of U.S. Army Pvt 1st. Class Orion Oettel and Florida National Guard.
National Guard Activations in 2020 Reach Many Peaks
2020 National Guard Homeland Response Single-Day Peak Numbers include:
∙ 120,091: Guard members engaged worldwide (June 6)
∙ 86,400: Domestic Operations support (June 8)
∙ 47,100: COVID-19 support in 50 states, three territories and Washington, D.C. (May 12)
∙ 43,351: Civil disturbance support in 34 states and Washington, D.C. (June 8)
∙ 8.4 million: Days supporting domestic operations in fiscal year 2020 ended September 30, 2020.
Civil Disturbance: Guard members from 38 states have logged 596,400 days supporting law enforcement agencies in 2020. At the peak day of June 8, more than 43,350 Guard soldiers and airmen were conducting civil disturbance missions.
Severe Weather: Guard members from 22 states logged 171,300 days supporting 22 severe weather events in 2020 — rescuing 435 people and delivering 5.7 million Meals-Ready-to-Eat, 7.9 million liters of water and 1.5 million bags of ice. They also cleared 2,660 miles of road to assist recovery efforts.
A WC-130J Super Hercules, of the 53rd Weather Reconnaissance Squadron, takes off Dec. 15 from Keesler Air Force Base, Mississippi. The squadron, known as “Hurricane Hunters,” provides weather reconnaissance services during the winter storm season that starts on Nov. 1 each year.
Photo courtesy of U.S. Air Force 2nd Lt. Christopher Carranza and the Mississippi National Guard.
National Guard Activations in 2020 Aid with Hurricane Relief and Wildfire Fighting
Even after hurricane season ends, the National Guard still will fly over water where there are limited resources to help forecasters gather and put data into weather models to aid prognostications. The purpose of collecting data through weather reconnaissance services is the same for both winter storms and tropical disturbances. In contrast to weather reconnaissance of tropical systems where the flights go right into the storm at altitudes ranging from 500-10,000 feet, the aircrews navigate their WC-130J aircraft to collect data at around 30,000 feet by flying in front of the system.
Wildfires: Guard members from 19 states logged more than 129,200 days supporting wildfire missions in 2020. C-130 crews, equipped with Modular Airborne Fire Fighting Systems (MAFFS), flew 470 sorties and logged 549 flying hours while dropping more than 1.3 million gallons of fire retardant. Air National Guard fixed wing and remotely piloted aircraft crews also logged 2,274 hours to provide real-time fire mapping; evacuation route identification; and new fire/hot spot detection.
North Carolina National Guard Documents its 2020 COVID-19 Response with Images
The North Carolina National Guard spent much of the past year responding to the COVID-19 crisis in many critically important ways. It took a break from its COVID-19 intervention between July 2 and Sept. 22 when demand for its service waned based on statewide needs. However, it responded when a new surge in the virus began to occur in September.
The North Carolina National Guard started up again on Sept. 23 with food bank operations and COVID-19 testing support. Plans currently are underway for vaccine support based on the assessments of state agencies.
At the beginning of COVID response early March, there were concerns about ensuring North Carolina Emergency Management’s information technology (IT) systems remained secure to allow common operating pictures across response agencies and data security. Former U.S. Secretary of Defense Mark Esper, who served from July 2019 to November 2020, cautioned that U.S. adversaries are increasingly resorting to undermining U.S. security in the cyber domain. Just as on land, at sea and in the air, the Defense Department must use its forces in cyberspace to protect its citizens, he advised.
New York National Guard Rushes to Initiate COVID-19 Aid from March Until Year End
The New York National Guard’s soldiers and airmen were among the first in the country to be called up to respond to the COVID-19 pandemic on March 10 and it became one of the first two state units to begin administering a vaccine to its troops in December. Since 300 Guard members mobilized to help contain a coronavirus outbreak in New Rochelle, New York, last March, the unit has activated 5,066 soldiers and airmen, along with members of the New York Guard and New York Naval Militia, to provide additional help.
At the mobilization’s peak in April, 3,646 personnel responded to the COVID-19 crisis. As 2020 winds down, 1,682 National Guard personnel remain on duty in the state for Operation COVID-19.
The New York National Guard received 975 doses of the vaccine developed in a partnership between Pfizer Inc. (NYSE:PFE), of New York, and BioNTech SE (NASDAQ:BNTX), of Mainz, Germany, on Dec. 16 that were administered by Dec. 20 to fellow soldiers and airmen working in health care or on the COVID-19 task force. In the effort, New York participated in the Department of Defense effort to administer 44,000 vaccine doses worldwide.
As of Dec. 30, the New York National Guard in 2020 had collected 14,269 antibody tests; conducted 2,179 COVID-19 tests at nursing homes; recovered 2,882 human remains in New York City, Long Island and Westchester; distributed 112,707 gallons of hand sanitizer; fielded 278,162 calls about COVID-19; prepared 444,987 meals; tested the fit of N-95 masks for 1,889 personnel; and cleaned 907,000 square feet at 22 locations.
COVID-19 Crisis Drives National Guard Activations in 2020
Despite the COVID-19 pandemic not stopping the rise of many stocks, the virus has caused severe economic fallout and huge job cuts. A recent surge in cases ensnared President Trump, who was hospitalized between Friday, Oct. 2, and Monday, Oct. 5. The overall weekly hospitalization rate is at its highest point in the pandemic, with steep jumps in individuals aged 65 years and older, according to the Centers for Disease Control and Prevention (CDC).
Spc. Austin Dycha and Sgt. Nikole Clark, members of the New York National Guard Military Funeral Honors Team, drape the U.S. flag across the casket of U.S. Army Air Force Cpl. Raymond Kegler, at his May 14 funeral in Lackawanna, New York. Dycha and Clark wore cloth face masks as part of precautions adopted for 2020 military funerals to prevent the spread of COVID-19. Photo courtesy of Army National Guard Capt. Avery Schneider and the New York National Guard.
National Guard Activations in 2020 Do Not Stop Trend of Reduced Military Funerals
One area of service that has declined in 2020 due to COVID-19 is the number of military funeral honors guard teams that have been asked to participate in the services of veterans, according to the New York National Guard. People increasingly seem to be heeding warnings to social distance, wear masks and avoid indoor gatherings.
COVID-19 cases have totaled 19,515,430 and led to 338,632 deaths in the United States, along with 82,051,958 cases and 1,791,251 deaths worldwide, as of Dec. 30, according to Johns Hopkins University. America has the dubious distinction of suffering the most cases and deaths of any nation.
A surge in National Guard activations in 2020 has allowed governors across the country to call up their military reservists whenever any some of the crises of the last year occurred. For investors and concerned citizens alike, stocks that offer emergency responses during such crisis are looking like buying targets as the market seems likely to trend up during 2021.
Paul Dykewicz, www.pauldykewicz.com, is an accomplished, award-winning journalist who has written for Dow Jones, the Wall Street Journal, Investor’s Business Daily, USA Today, the Journal of Commerce, Seeking Alpha, GuruFocus and other publications and websites. Paul, who can be followed on Twitter @PaulDykewicz, is the editor of StockInvestor.com and DividendInvestor.com, a writer for both websites and a columnist. He further is editorial director of Eagle Financial Publications in Washington, D.C., where he edits monthly investment newsletters, time-sensitive trading alerts, free e-letters and other investment reports. Paul previously served as business editor of Baltimore’s Daily Record newspaper. Paul also is the author of an inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a foreword by former national championship-winning football coach Lou Holtz. The book is great as a holiday gift and is endorsed by Joe Montana, Joe Theismann, Ara Parseghian, “Rocket” Ismail, Reggie Brooks, Dick Vitale and many others.