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.
Small fish, smaller pond
Speaking of which, Tuesday was a slow day at the Pentagon, with the U.S. Department of Defense awarding only four contracts worth a total of just $87.6 million. And yet, the small volume of contracts available just made tiny project management firm Tetra Tech’s (NASDAQ:TTEK) wins look bigger by comparison.
The biggest “name” company winning a contract Tuesday was Microsoft (NASDAQ:MSFT), which received $9.1 million in additional funding to pay for its providing “Microsoft Premier Support” and “Microsoft Custom Support” services for U.S. Navy users of Windows XP, Office 2003, Exchange 2003, and Server 2003. Tetra Tech’s wins dwarfed that award, as the company took home:
- a piece of a six-party, $48 million contract to perform environmental services and perform environmental construction work at U.S. Air Force bases around the world; and
- all of a $20.9 million funding increase on a contract task order to perform sediment dredging and capping work at “Site 19” of the former Derecktor Shipyard located at Coddington Cove, Naval Station Newport in Rhode Island.
Insider trading notes
Tuesday’s contract wins notwithstanding, recent insider trading trends at Tetra Tech have not been encouraging. Over the past three months, only one such transaction has taken place — a sell order for 15,950 shares. Over the past year, insider sales have significantly outpaced insider purchases, and the volume of Tetra Tech shares sold has exceeded the volume bought by 335,658 shares.
Similar trends are evident at Microsoft, with more sales transactions than buys recorded over both the past three- and 12-month periods, and with shares sold outweighing shares purchased by more than 8 million and more than 85 million shares, respectively.
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