Pentagon Insider: Guess Who Just Won a $1.56 Billion Defense Contract?

The Pentagon awarded $1.9 billion in new defense contracts Thursday — almost all of which went to one single company, winning one single contract. The lucky winner: Lockheed Martin (NYSE:LMT).

In the day’s biggest award by far, Lockheed Martin netted a foreign military sales contract worth $1.56 billion, to supply the nations of Korea, Qatar, Saudi Arabia, Taiwan, and the United Arab Emirates with an unspecified number of Patriot surface-to-air missiles and equipment and spare parts needed to operate same. With an estimated delivery date of June 30, 2018, this contract promises to deliver more than half a billion dollars annually to Lockheed Martin, over the next three years.

Naturally, with Lockheed sucking all the oxygen (and money) out of the room, the day’s remaining contracts were much smaller in size. But even so, they weren’t exactly “small.” Polaris Defense (NYSE:PII) won an $83.1 million contract to supply lightweight tactical all-terrain vehicles to U.S. Special Operations Command. And seven separate energy firms received contracts to supply the Defense Logistics Agency with aviation fuel. Among publicly traded companies, these included:

– Chevron (NYSE:CVX) — $24.9 million

– Western Refining (NYSE:WNR) — $30.9 million

– Valero (NYSE:VLO) — $34.5 million

– Par Petroleum (NYSE:PARR) subsidiary Hawaii Independent Energy — $40.3 million

Insider trading notes
As is usual among publicly-traded companies, where stock compensation can form a large part of total compensation — but must be sold to be converted to cash — the majority of these firms exhibit negative trends in insider trading, i.e. more sales transactions than purchases.

In three instances, however, insider trading looks intriguingly positive. At Par Petroleum, insiders have filed Forms 4 with the SEC indicating eight insider purchases in the past three months, versus just one sale by an insider. At Valero, more insiders are selling than are buying, but the total numberof shares bought by insiders slightly exceeds the total number of shares sold.

Finally, and most optimistically, Chevron insiders have reported a full dozen insider purchases in the last three months, buying a total of 203,958 shares in non-open market transactions — with not a single share sold.

 

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