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.
Monday’s most interesting Pentagon contract
Monday was a quiet day at the Pentagon, with just three contracts awarded totaling barely $72 million. One of these went to defense giant Lockheed Martin (NYSE:LMT), a small $14 million order for “software product improvements” on Sikorsky’s MH-60S Seahawk helicopter. But the day’s biggest contract, and its most interesting, went to a small subsidiary of giant British pharmaceutical concern AstraZeneca (NYSE:AZN).
Valued at $47.6 million, the contract hires AstraZeneca subsidiary MedImmune Biologics to supply the Defense Logistics Agency (DLA) with an unspecified number of doses of “influenza vaccine, nasal spray.” This presumably refers to the FluMist flu vaccine that made MedImmune famous when it was still an independent company, and which helped convince AstraZeneca to buy it in the first place.
While relatively speaking, $47.6 million is a small sale for MedImmune’s parent company (which did $25.7 billion in sales last year), Pentagon purchases of flu vaccine from the company have been consistent over the past few years — and may now be set to grow. According to DoD data, the DLA bought $27.2 million worth of vaccine from MedImmune in 2012, $23.3 million in 2013, $23.3 million again in 2014 — but now has more than doubled the pace of its purchasing with its 2015 bulk buy.
Insider trading notes
As a foreign-listed stock that files mainly 6-K and 20-F notifications in the United States, Insider Monkey does not contain information on Form 4-notified insider trading transactions regarding MedImmune parent AstraZeneca.
Insider trading at Lockheed Martin, in contrast, has been decidedly negative, with more sales than purchases recorded over the past three months, and vastly more shares disposed of than acquired.
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