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.
Oshkosh wins, B’Gosh!
The Pentagon closed out its contracts-awarding week with a bang on Friday, awarding $1.27 billion in new work to its many contractors. Chief among these was Wisconsin truckmaker Oshkosh (NYSE:OSK), which won half of all funds awarded with one single, $780.4 million contract to:
– “recapitalize” (i.e. tear down and rebuild) 1,363 Heavy Expanded Mobility Tactical Trucks (HEMTTs) and 435 palletized load systems (PLS) for the U.S. Army, and to furthermore
– supply 1,022 new palletized load system trailers, plus provide kits, support, and related products and services.
The Army expects Oshkosh to complete work on this contract by Feb. 18, 2022.
Oshkosh consumed the bulk of the day’s contract funds, but where were still other notable winners. Chief among them:
Fluor Corporation (NYSE:FLR) which was awarded a $45.4 million option exercise to provide “base operations support services” at various U.S. Navy installations in the Southeast.
KBR (NYSE:KBR) won part of a $49.9 million contract to perform “real property repair and renovation associated environmental work, force protection work, and construction services” for the government of Israel.
And Boeing (NYSE:BA) which won a financially small, but nonetheless interesting contract worth $11.5 million to maintain the U.S. Air Force’s new Space Based Space Surveillance System and Red Local Area Network. This will be a new constellation of U.S. military satellites tasked with detecting and tracking objects in orbit around the Earth.
Insider trading notes
Friday’s big contract win notwithstanding, insider trading trends at Oshkosh have been mixed, at best, of late. According to Form 4 filings with the SEC, insiders have placed 11 purchase orders versus only six sales orders over the past three months. The net volume of shares traded, however, works out to 67,430 more shares sold than bought.
Fluor has seen more sales transactions than buys reported during the same period, and more shares insider-sold than bought; while Boeing has reported three sales and no insider purchases.
The only stock named above that’s showing modestly positive trends in insider buying, in fact, is KBR. There, sales by insiders outnumber insider purchases 11-to-three. However, the number of shares bought by insiders outweighs the number of shares insider-sold — by 14,119 shares.
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