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.
Thursday at the Pentagon
The Pentagon awarded 17 new defense contracts worth a combined $442 million on Thursday. Mega-contracts were largely lacking in this day’s news, but here are a few of the larger awards handed down:
– Boeing (NYSE:BA) was awarded a $34.4 million “definitization” (fixing the final value) on a previously awarded contract to repair “field failures” and manage “parts obsolescence” on U.S. Army radar systems. With this definitization, the total value of the contract in question is fixed at $98.6 million.
– Raytheon (NYSE:RTN) was awarded an $18.4 million contract modification to perform depot-level diagnostics and repair of major PATRIOT missile system parts for the Army.
– General Dynamics (NYSE:GD) will receive an extra $17.1 million on a foreign military sales contract to supply the governments of Oman and Taiwan with upwards of 6,100 MK-82 and MK-84 General Purpose Bomb Bodies.
– and in a separate foreign military sales contract, United Technologies’ (NYSE:UTX) Sikorsky division won an extra $11.3 million to supply Jordan with one new UH-60M Black Hawk helicopter.
Insider trading notes
Insider trading trends among these companies have been decidedly mixed. At Boeing, for example, only four transactions (one insider buy, three sells) have been recorded over the past three months. In contrast, there have been a much larger number of transactions reported at Raytheon — but even so, insider sales are outrunning insider purchases 3-to-1.
General Dynamics has seen 21 insider buys, versus only three insider sales the past three months — but a whopping 171,729 more shares sold than bought.
Finally, it’s at United Technologies that insider transactions have been fewest and farthest between. Although there have been no insider purchases reported in the past three months, there have been only two insider sales reported, both relatively small in size.
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