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 has more money, but Booz will make you happier
The work week started slow at the Pentagon, with DoD contractors netting only $172 million in contracts Monday. The three largest contracts awarded to publicly-traded companies, in reverse order, were:
- $55.6 million — to Textron (NYSE:TXT), to provide technical advice and maintenance and logistics support on Bell helicopters operated by the Iraqi military.
- $29.9 million — to Jacobs Engineering (NYSE:JEC), to provide project management, engineering services, and technical support to the U.S. Army Corps of Engineers working at the New Bedford Harbor Superfund Site in New Bedford, Mass.
- and $12.4 million — another foreign military sales contract, this one going to Booz Allen Hamilton (NYSE:BAH), which will provide training and engineering, technical and management support to the Royal Saudi Naval Forces.
Insider trading notes
From an insider transactions perspective, it’s the last of these companies that looks most interesting. Whereas SEC Form 4 filings show more insider sales than purchases at Textron — and many more at Jacobs Engineering — over the past three months, at Booz Allen the opposite is true.
Nine insider purchases have been reported to the SEC over the past three months by Booz insiders, versus just eight insider sales. Perhaps more importantly, insiders have bought nearly twice as many Booz shares as (other) insiders have sold, with total insider purchases net of sales standing at 51,600 shares over the past 90 days.
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