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.
Nurses ‘R’ U.S.
According to the Department of Defense’s latest daily update, the Pentagon awarded $380 million in new contracts Wednesday. The largest of these by far was a $200 million contract to hire privately held government staffing firm Global Dynamics LLC to supply the U.S. Army with “registered nurse services for the San Antonio Military Health System through September 2020.
In contrast, contracts awarded to publicly-traded military contractors Wednesday were significantly smaller in size. Among the notable awards:
Cubic Corporation (NYSE:CUB) won $76.1 million to “support” the Joint Readiness Training Center Operations Group at Ft. Polk, Louisiana.
Northrop Grumman (NYSE:NOC) won $19.9 million for “pre-planned product improvement” of the Army’s Joint Tactical Ground Station system in Colorado Springs, and in Azusa, California.
And in the day’s only Air Force contract awarded, General Electric (NYSE:GE) was awarded $12 million to supply USAF with 17 individual F110 Service Life Extension Program (SLEP) kits to upgrade the F110-100 engines that power Air Force F-16 fighter jets.
Insider trading notes
According to Form 4 filings with the SEC, no insider transactions — neither buys nor sells — have been recorded at Cubic Corporation over the past three months.
As we’ve mentioned previously, 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.
In contrast, the highest-profile stock mentioned in Wednesday’s contracts report — General Electric — also shows the most propitious-looking insider transactions trends. In a reversal of trends seen over the past year, the most recent three months have seen more insider purchases (four) than insider sales (one) at GE. Additionally, shares bought by insiders outnumber shares sold by a net of 82,010 shares.
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