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.
Textron sweeps in $11 million
The Pentagon opened up the week Monday with 18 contract awards totaling $491 million in value. Among the more interesting contracts awarded:
Lockheed Martin (NYSE:LMT) claimed the day’s biggest contract by dollar value, a $119.2 million award to perform contractor logistics support for Iraqi F-16 fighter jets based at Balad Air Base, Iraq.
Caterpillar (NYSE:CAT) was another big winner, landing a $38.4 million contract to supply parts, technical support, and supply chain management services required for remanufacturing Caterpillar engines installed in U.S. Army Family of Medium Tactical Vehicle (FMTV) trucks, Mine-Resistant, Ambush-Protected (MRAP) armored trucks, Heavy Expanded Mobility Tactical Trucks (HEMTT), and Heavy Equipment Transporters (HET).
And in what was perhaps the day’s single most interesting (albeit not most lucrative) award, Textron (NYSE:TXT) subsidiary AAI Corp. was awarded $11 million in additional funds on its “Unmanned Influence Sweep System (UISS)” contract. UISS is described as a system used by Navy Littoral Combat Ships for their minesweeper missions, targeting acoustic, magnetic, and magnetic/acoustic combination mines. The Navy describes UISS as providing “a high area coverage rate in a small, lightweight package with minimal impact on the host platform.”
Insider trading notes
From an insider trading perspective, transactions at Lockheed Martin over the past three months have been anything but positive — four insider sales versus just one insider buy, and total shares sold outweighing shares bought by more than 73,000.
Trading at Caterpillar has been negative, but less so. Although a dozen insider sales have been recorded in the past three months, versus (again) only one insider purchase, sales at Caterpillar outweigh purchases by only 8,059 shares.
Finally, trading at Textron is at a near standstill. No insider purchases have been notified to the SEC in the past 90 days. There has been only one insider sale, however, and that for a mere 481 shares.
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