Any thoughts that the start of 2016 would be smooth sailing for U.S. government contracting stocks and financial markets have quickly been cast aside as volatility from 2015’s second half carried into the new year.
The GovCon Index — our composite index of 30 large contractor stocks — has recorded movements of at least a full percentage point up or down in two trading days from four and sat at a loss of 3 percent for the week as of midday Friday.
GovCon stocks appear to be getting swept in with investor fears over a potential economic slowdown in China, the world’s second largest economy and a central hub of raw material manufacturing.
One GovCon Index stock has held firm against the negativity so far in the form of rocket and ammunition maker Orbital ATK with that company’s shares up nearly 2 percent for the week as of midday Friday.
Dulles, Virginia-based Orbital ATK was the Index’s top gainer in 2015 to the tune of 65 percent — more than double the rate of second-ranked Leidos — as investors appear to bet that the combination of Orbital Sciences and ATK’s aerospace and defense groups will generate returns.
The merger closed in February 2015 and Orbital ATK has exceeded Wall Street’s earnings forecasts in all three quarters since it entered the market as a combined entity.
THE WEEK’S TOP GOVCON STORIES