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March was a good month for the stock market and a very strong month for the Global Security Fund which was up 10.1 percent and 10.3 percent respectively for share classes R and S, which was better than both the benchmark index MSCI World TR (+6.97 percent) and the Swedish Stock Exchange (+9.87 percent). For just over a year, the market has strongly favored growth stocks, but we have recently seen a clear shift towards value stocks, which has benefited the fund.
Cyclical companies were the month's winners. Boeing rose 24.4 percent and was the fund's best performing holding, contributing 1.6 percent to the fund's return. Boeing reported sales figures for February, which showed higher figures than rival Airbus and for the first time in fourteen months the company had more orders than cancellations. Boeing's share price fell almost 80 percent during the Covid pandemic, and at one point the company traded at just under $100. We wrote in September's monthly newsletter that a series of strategic cost reductions together with a turning point in the airline industry at the time could very well be the turning point for the airline's share price. Since then, the rate has risen by roughly 60 percent, which is 3 times the benchmark index. The company is well positioned for a continuation of the cyclical recovery and also has a large exposure to the space and defense industry.
Defense company Lockheed Martin was the month's second best performing holding with a contribution of 1.3 percent. The company, which was up 15.7 percent during the month, is trading today at a PE ratio of 12.6, and in our opinion, this is a confirmation that there are still great opportunities for a revaluation. In the latest quarterly report, the company was cautious about sales growth in the short term. but we believe that the company will likely beat the expectations that the market now has.
Northrop Grumman, one of the traditional defense companies with solid exposure to the space industry, was the month's third best performing holding with a 1.2 percent contribution. The company, which was up 14.8 percent, is traded today at a PE ratio of 13.6. The market's focus is on sales expectations, which the company has turned down in the near future, but we believe the company's exposure to the space and defense industry will help to mitigate the short-term downside risk.
L3 Harris Technologies was also a strong performing holding with a contribution of 1.2 percent. The company's sales growth is subdued for the coming years, but like most traditional defense companies, there is a large order backlog, a fundamental strength with a strong operating margin. Aircraft carrier maker Huntington Ingalls Industries also performed well, contributing 1.1 percent. The company was up 21 percent in March.
There were few losses in March, the exceptions being Crownstrike, Palo Alto Networks and SAIC which were the fund's worst performing holdings with negative contributions of -1.9 percent, -0.5 percent and -0.2 percent.
Cybersecurity firm Crowdstrike, which reported in March, posted strong numbers that again beat expectations. Sales growth was 5.8 percent better than market expectations, resulting in earnings per share of 50.6 percent, also higher than market estimates. The company is growing with new customers and several products have good opportunities to continue the impressive growth journey. Despite this, the company's share price was down 12.2 percent in March, which can be explained by the fact that the company is in a consolidation phase after an extremely strong rise. Palo Alto Networks, another cybersecurity company, also showed a decline in March (6.9 percent). Although the company beat market expectations in the latest quarterly report, the company has expanded its operations through acquisitions and the market's focus is on the cost of the expansion.
The consulting service company SAIC with a focus on communications and cyber security, which mostly has the US government as a client, released its quarterly report in March. The company had somewhat weaker sales growth, which missed by 3.8 percent, but beat profit expectations by more than 16 percent. It was the company's focus on future growth that scared the market, and which now looks to be around zero in 2022. A series of acquisitions to broaden the business has increased the indebtedness in the company and the decisive thing going forward is that the company can grow relative to this indebtedness. However, the company has a unique position in the market and a modernization of the US government's IT system and a focus on cyber security will benefit the company, even if there is a short-term decline in growth.
The rotation to value stocks from growth has benefited the fund over the past six months and our assessment is that a continuation of the trend will benefit a number of the fund's holdings which are stable value companies with low valuations and strong cash flows. The fund also has a large allocation to growth companies in cyber security and the space industry that are not dependent on value rotation and the composition of the portfolio offers a unique exposure to global security, an area with strong growth over a long period.