Bernstein believes that a further decline in U.S. defense stocks after the onset of sequestration would provide a buying opportunity. The firm expects sequestration to affect contracted services first, and it believes that product-oriented companies will be impacted minimally in 2013. Bernstein believes that most of the impact from sequestration is already reflected in the stocks, and it thinks that Raytheon (RTN) and General Dynamics (GD) have the least risk from sequestration.