Iran–Israel Tension Returns to the Headlines — Could Helios and MTM Benefit as the US Hunts for Home-Grown Supply?

In mid-June 2025, the simmering tensions between Iran and Israel reignited in a dramatic escalation. On 13 June, Israel launched air strikes targeting Iranian nuclear and military facilities. Iran swiftly retaliated with missile fire. Around 22 June, the United States joined the escalation by striking multiple Iranian nuclear sites with bunker-buster bombs. Energy prices spiked as traders fretted over potential disruptions in the Strait of Hormuz, a strategic chokepoint through which roughly 30 per cent of global seaborne oil passes each day.

On 13 June, Brent crude jumped as much as 13 per cent intraday and finished the session roughly 7 per cent higher—up US$4.87 at US$74.23 a barrel—after Israel’s strikes on Iranian sites were confirmed, while early market reactions signalled that if Iran managed to close or even threaten the Strait of Hormuz, prices could rocket to US$120–130 per barrel. By 16 June, markets were still volatile. While Iran had signalled potential interest in talks, this did not lead to substantial market cooling.

Brent crude initially spiked but by 16 June had fallen back to settle at about US$73.38 a barrel—squarely inside the US$71–74 range that briefly emerged after the escalation. The FTSE 100 rallied near its record highs, and other global indices moved higher. Around mid-June, U.S. officials suggested that President Trump would decide on deeper military involvement within a fortnight—a decision that materialised with the U.S. strikes on 22 June.

For investors, this cycle of tension offers more than headline-driven momentum in oil or gold. The disruption adds urgency to the U.S. policy agenda around domestic supply chains across energy, defence and advanced industrial sectors. We believe this reopening of geopolitics-driven risk maps could be precisely the catalyst that elevates select “regional champions” such as Helios Technologies (HLIO) and MTM (Metal Technologies, Inc.) as the United States green-lights localisation.

 

Why Localisation Has Gained Momentum

When geopolitics rattles energy markets, policy inevitably responds. The U.S. Congress has a long history of reacting to supply shocks with incentives—tax breaks, grants or procurement mandates—to foster domestic resilience. The latest spike in oil and freight-insurance costs underscores the fragility of global logistics and underlines the appeal of shortening supply chains through on-shore manufacturing.

Markets have already priced in some of this tension. While oil trended lower as diplomacy emerged, futures remain above pre-June levels. Analysts warn that any future escalation could push Brent crude up by US$5–12 per barrel or more, depending on the severity of disruptions, particularly around the Strait of Hormuz. In the background, defence budgets often swell after geopolitical shocks, funnelling funds into missile defence, cybersecurity, naval assets, and precision engineering.

The scenario presents a meaningful opportunity. While investors usually lean on energy majors for inflation plays, mid-tier industrial tech firms offering strategic alignment with U.S. policy shifts look undervalued. In our view, this sets the stage for Helios and MTM to emerge as structural beneficiaries of localisation.

 

Helios Technologies: Steady Execution, Localisation Advantage

Helios Technologies (NYSE: HLIO) makes advanced motion-control and electronic systems. Their components power applications spanning construction and agriculture to defence and medical equipment. The Q1 2025 report shows a company leveraging discipline and adaptability amid headwinds.

In the quarter ended 29 March 2025, Helios delivered US$195.5 million in net sales, down 8 per cent year-on-year but still ahead of guidance by US$5 million. Management highlighted an improving sequential margin, with non-GAAP EPS of US$0.44 (diluted GAAP EPS at US$0.22), and operational cash flow of US$19 million, up 7 per cent. The company reduced total debt by 15 per cent year-on-year and achieved a net-debt/EBITDA ratio of just 2.7×.

Particularly notable is Helios’ “in-the-region, for the region” manufacturing mantra. Facing 145 per cent U.S. tariffs on certain Chinese imports (plus retaliatory duties), Helios shifted to building capacity near key end markets. That vision aligns neatly with any U.S. strategy underpinned by localisation, and the company can deploy share buy-backs as part of its confidence play.

 

MTM: Private Player, Public Opportunity

MTM operates in precision metallic components and assemblies, supplying both defence contractors and industrial OEMs. While it remains private, MTM’s underlying thesis is comparable: U.S. procurement emphasises trusted domestic sources for high-quality subsystems. As U.S. policy shifts toward localisation, MTM is well-positioned to win contracts in defence and aerospace supply chains.

For investors, MTM offers a compelling contrast. It lacks public trading liquidity, but is ripe for deal-flow—either through direct exposure in client companies, private-equity interest, or through tender wins disclosed via federal procurement platforms. Monitoring its progress on SAM.gov or Department of Defence announcements could reveal catalytic contract wins that boost valuation or trigger M&A interest.

 

Risks to Keep in Mind

We aren’t calling for a one-way rally. Markets frequently overshoot on geopolitical news. Administrators from firms such as Allianz and Wellington caution investors that oil markets may be pricing in too much escalation. Iran has yet to threaten permanent closure of transit routes, and OPEC believes it can offset short-term supply shocks elsewhere.

Additionally, domestic manufacturing decisions take time. Legislators might sign localisation incentives this year, but contracts won’t be awarded until late 2025, with ramp-ups into 2026. This extends the horizon for the thesis.

Still, we see value in early positioning: any pullback after de-escalation phases could offer more attractive entry points. The broader narrative—inflation risks, freight costs, supply resilience—likely remains intact.

 

Strategic Signals to Watch

Investors contemplating a position in Helios or MTM should focus on several key watch points:

• Track U.S. policy developments: “Buy American” procurement clauses, localisation grants, Federal acquisition memos. Passage of these will directly benefit regional manufacturers.
• Follow Helios’ contract pipeline: look for increases in U.S. government orders discussed on earnings calls or disclosure platforms.
• Monitor MTM (or similar private firms) in DoD tender wins; early contract awards could pivot their growth trajectory.
• Keep tabs on oil futures and freight-cost indices. Persistent Brent strength tends to accelerate support for energy independence.
• Watch valuation gaps: Helios trades on a mid-teens P/E with a ~1.2 per cent yield, leaving scope for re-rating if localisation policy gains momentum.

 

Bigger Picture: Beyond Energy Prices

It pays to look past spot-crude moves. Freight-insurance costs, disruptions to input materials (such as fertilisers), and regional downgrades in investment flows all highlight fragility in global supply chains. That is when industrial strategies redirect capital toward onshore manufacturing. Never mind energy shocks: the real story is structural supply-chain resiliency.

Helios and MTM lie at the nexus of that transition. They provide critical subsystems rather than commodities, making them less exposed to broad-based volatility, but highly sensitive to policy support and contract flows. These companies represent the kind of hidden leverage investors seek in periods of rising geopolitical risk and government activism.

 

Conclusion: A Strategic Allocation in an Unsettled World

The renewed Iran–Israel tensions highlight how markets respond swiftly to geopolitics. Oil volatility surged, and some investors shifted into gold and bonds. But there is a subtler, more strategic play in industrial-tech firms aligned with localisation and supply security.

Helios Technologies, with its niche precision-control expertise, disciplined execution, and U.S.-centric manufacturing footprint, has clear potential to outperform if localisation policies or contract flows accelerate. MTM, though private, also presents an attractive asymmetric opportunity—less visible, but potentially valuable as a contract-driven beneficiary of the same policy tailwinds.

For Australian investors seeking diversification away from standard banking, resources and tech exposures, these names offer structural optionality: upside tied to geopolitical and policy catalysts, backed by solid industrial fundamentals.

 

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Frequently Asked Questions (FAQs)

• What impact does the Iran–Israel conflict have on global markets?

  Geopolitical tensions between Iran and Israel typically lead to spikes in oil prices, heightened market volatility, and increased demand for safe-haven assets like gold and U.S. bonds. Investors tend to reallocate funds to sectors that benefit from supply security, such as defence and domestic manufacturing.

• Why are companies like Helios and MTM relevant to these developments?

  Helios Technologies and MTM produce essential components for industrial, defence and infrastructure systems. As the United States moves to reduce dependence on foreign supply chains, companies like these stand to gain through federal contracts and localisation strategies.

• How can Australian investors get exposure to Helios or MTM?

  Helios (HLIO) is listed on the NYSE. Australian investors can access it via international trading platforms that offer U.S. equities. MTM is currently a private company, so exposure may come through funds or private-equity vehicles focused on U.S. defence or industrial infrastructure.

• Are these stocks high risk due to geopolitical speculation?

  While geopolitical catalysts can create momentum, both Helios and MTM have underlying industrial fundamentals. Helios, for instance, has a 27-year dividend track record and solid cash flows, making it a fundamentally sound investment with added upside from policy shifts.

• What is the outlook for localisation in the U.S.?

  The Biden and Trump administrations alike have pushed for domestic manufacturing, especially in strategic sectors such as defence, semiconductors and infrastructure. Legislative support has included tax credits, grants and procurement requirements. We believe this trend is accelerating amid global instability.