For many investors, the U.S. government seems a black box. Taxes go in, spending comes out — but with the exception of the occasional headline-grabbing megacontract, where the spending goes, and how much goes to whom, remains very much a mystery.
But if you look very carefully (and know where to look), you can sometimes get a glimpse at where the money is going. Believe it or not, one of the easiest places to spy on government spending is… the U.S. Pentagon.
Northrop Grumman (just about) sweeps the field
According to the Department of Defense’s latest daily update, the Pentagon handed out $549 million in new contracts Monday. Defense contractor Northrop Grumman (NYSE:NOC) won both the most contracts — and the most contract dollars, too, landing awards for:
– $145.4 million, the day’s largest award, to provide the U.S. Air Force with “Battlefield Airborne Communication Node Joint Urgent Operational Need (BACN JUON) payload operations and support”
– $39 million more to correct “deficiencies” in the air-to-air radar subsystem design on its new MQ-4C Triton maritime unmanned aerial vehicle
– and finally, $35.7 million to perform engine maintenance and overhaul on Air Force KC-10 aerial refueling tankers.
In total, Northrop took home $220.1 million worth of contracts, or 40% of the money on offer.
Other significant contracts awarded Monday included:
$68.6 million awarded to Lockheed Martin (NYSE:LMT) to pay for engineering work and parts related to the automatic backup oxygen supply systems aboard F-22 Raptor stealth fighter jets
$38.8 million awarded to United Technologies‘ (NYSE:UTX) Sikorsky unit, funding “the procurement of critical parts and associated support for two CH-53K system demonstration test article aircraft.” The CH-53K “King Stallion” is a new heavy-lift cargo helicopter that UTC is developing for the U.S. Marine Corps.
Insider trading notes
According to Form 4 filings with the SEC, insider trading activity at Northrop Grumman has been mixed, with more purchases than sales reported, but more total shares sold than bought over the past three months.
Meanwhile, and as previously noted, insider transactions at Lockheed Martin have been purely negative, with more sells than buys recorded, and more shares sold than bought during the same period.
United Technologies, meanwhile, has seen no insider buying whatsoever over the past three months. Both transactions reported to the SEC, albeit small in size (just 5,900 shares total), were sales.
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