In the spirit of the Fourth of July last week, the Department of Defense (DoD) reinvested in their defense spending. They spent over $9.2 billion in the four free days last week. Their spending the prior week was $4 billion.
The number of contracts reached 90 for the week, ranging from weapons and vehicle development to night vision set replacement across different branches of the military.
The company realizing some of the largest contracts is Boeing (BA). The DoD agreed to pay Boeing $500 million to transition into post production of the C-17 jet because their need was being met. The company is likely still responsible for parts and maintenance for the fleet of C-17s.
Additionally, the DoD paid Boeing $146 million for weapons development, and specifically the Harpoon missile. The missile is an anti-ship cruise missile that the U.S. has sold to many of our allies.
Another major deal was made with Textron (TXT) in the value of $213 million for developing the next generation of troop ferry/landing craft. The Navy is currently using a near-obsolete hovercraft. The contract also includes options that could bring the total to $570 million.
Business Section: Investing Ideas
With some of these major contracts reaching hundreds of millions of dollars, the companies that signed the agreements are likely to see huge revenues. The hard part for them is to reduce their cost of production and grow their margins.
Below is a list of some of the public companies that were listed in the Department of Defense’s contract list. Will these stocks see big returns from these contracts, or will investors frown upon their actions?
List sorted by market cap.
1. Boeing Co. (BA, Earnings, Analysts, Financials): Engages in the design, development, manufacture, sale, and support of commercial jetliners, military aircraft, satellites, missile defense, human space flight, and launch systems and services worldwide. Market cap at $55.45B, most recent closing price at $74.03.
2. Honeywell International Inc. (HON, Earnings, Analysts, Financials): Operates as a diversified technology and manufacturing company worldwide. Market cap at $43.03B, most recent closing price at $55.22.
3. Lockheed Martin Corporation (LMT, Earnings, Analysts, Financials): Engages in the research, design, development, manufacture, integration, operation, and sustainment of advanced technology systems and products in the areas of defense, space, intelligence, homeland security, and government information technology in the United States and internationally. Market cap at $28.32B, most recent closing price at $87.39.
4. Raytheon Co. (RTN, Earnings, Analysts, Financials): Provides electronics, mission systems integration, and other capabilities in the areas of sensing, effects, and command, control, communications, and intelligence systems, as well as mission support services in the United States and internationally. Market cap at $18.78B, most recent closing price at $56.33.
5. Northrop Grumman Corporation (NOC, Earnings, Analysts, Financials): Provides products, services, and solutions in aerospace, electronics, information systems, shipbuilding, and technical service sectors. Market cap at $16.00B, most recent closing price at $63.61.
6. Textron Inc. (TXT, Earnings, Analysts, Financials): Operates in the aircraft, defense, automobile, industrial, and finance businesses worldwide. Market cap at $6.78B, most recent closing price at $24.18.
7. Oceaneering International, Inc. (OII, Earnings, Analysts, Financials): Provides engineered products and services primarily to the offshore oil and gas industry with a focus on deepwater applications. Market cap at $5.42B, most recent closing price at $50.00.
9. Booz Allen Hamilton Inc. (BAH, Earnings, Analysts, Financials): Provides professional services primarily to US government agencies in the defense, security, and civil sectors, as well as to corporations, institutions, and not-for-profit organizations. Market cap at $1.95B, most recent closing price at $14.72.
Written by Danny Guttridge
Use Kapitall’s Tools: Looking for ways to analyze this list?
Use this article snapshot as a launch pad (click here for help): Simply click on the links, and use Kapitall’s tab navigation to browse through the data…
Analyze These Ideas: Getting Started
- Read descriptions for all companies mentioned
- Access a performance overview for all stocks in the list
- Compare analyst ratings for the companies mentioned
- Compare analyst ratings to annual returns for stocks mentioned
- Real-Time Opinion: Scan the latest tweets about these companies (feed will open in a new window)
Dig Deeper: Access Company Snapshots, Charts, Filings
- Boeing Co. (BA, Chart, Download SEC Filings)
- Honeywell International Inc. (HON, Chart, Download SEC Filings)
- Lockheed Martin Corporation (LMT, Chart, Download SEC Filings)
- Raytheon Co. (RTN, Chart, Download SEC Filings)
- Northrop Grumman Corporation (NOC, Chart, Download SEC Filings)
- Textron Inc. (TXT, Chart, Download SEC Filings)
- Oceaneering International, Inc. (OII, Chart, Download SEC Filings)
- Teradyne Inc. (TER, Chart, Download SEC Filings)
- Booz Allen Hamilton Inc. (BAH, Chart, Download SEC Filings)
New to Kapitall?
1. New to the site? Click here to register for a free account, and gain access to more tools and data
2. Looking for more investing ideas like this? Click here to sign up for your free copy of Kapitall Weekly
3. Follow us on SeekingAlpha, Motley Fool, Nasdaq and Twitter
ABOUT KAPITALL WIRE
Kapitall Wire, which is not a broker/dealer, offers free cutting edge investing ideas, lively commentary and timely analysis of companies enhanced by interactive tools. And the Investing 101 section breaks complex concepts down to their basics, offering education to novices that doubles as a refresher course for more seasoned investors.
Kapitall Wire is a division of Kapitall Inc. Securities products and services are offered by Kapitall Generation, LLC, member FINRA/SIPC . Kapitall Generation, LLC is a wholly owned subsidiary of Kapitall, Inc.