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Weekly Roundup June 27 – July 1 2016: Defense Prime Stocks Soar Post-Brexit & more

June 27 – July 1 2016

A Note From Our President & Founder Jim Garrettson

As massive the selloff was in global financial markets in the wake of June 23’s “Brexit” vote in the U.K., so was the reversal in equities after investors took a deep breath to more fully gauge what Britain’s departure from the European Union means.

The U.S. stock bellwether S&P 500 composite index plunged 5.3 percent Friday June 24 and Monday into negative territory on a year-to-date basis but has risen 5.2 percent over the past three full trading sessions and today’s as of 12:30 p.m. to go back above the YTD gain line.

In conjunction, Executive Mosaic’s GovCon Index of 30 defense and government contracting stocks fell 4.7 percent over the first two post-Brexit trading days then has swung back up 5.2 percent from Tuesday’s open into midday Friday.

On a year-to-date basis, the GCI has climbed 10.6 percent on investor confidence in the long-term stability of defense and government spending worldwide and belief activity in the sector will increase in a heightened global security environment.

Many of the usual prime suspects have led the GCI’s charge this week with Lockheed Martin, General Dynamics, Northrop Grumman, shipbuilder Huntington Ingalls Industries and medical supply contractor McKesson as among the Index’s top net gainers.

Newport News, Virginia-based Huntington Ingalls hit new 52-week highs during intraday trade both Wednesday and Thursday, while Lockheed and Northrop reached that benchmark Thursday, as did the government services contractor Vectrus that spun out of Exelis in September 2014.

TheStreet.com’s Lou Whiteman argued this week that the defense and GovCon sector is also place of refuge due to relative long-term stability of U.S. military spending and other factors here:

“Most all big-ticket defense items sold overseas are priced in U.S. dollars, further minimizing defense exposure to ‘Brexit’ ramifications, and any economic decline in the region could arguably necessitate higher U.S. government European defense spending, offsetting any order weakness.”

In other words, defense can be a very good offensive play for your investments.


Arlington Capital Partners Buys Analytics, Cloud Platforms Provider EOIR Technologies
EOIR represents the private equity firm’s third major M&A transaction in the GovCon market within the past year.
FLIR Systems Buys Night Vision Tools Provider Armasight
San Francisco-headquartered Armasight makes thermal weapon sight technologies and scopes for military and law enforcement customers.
Booz Allen Vet Kevin Cook to Join Alion Science as Finance Chief
Cook has held the CFO role at Booz Allen for two years and led the consulting services contractor through its initial public offering in 2010.
Aerojet Rocketdyne to Consolidate 6 Business Units Into Defense, Space Organizations
Huntsville, Alabama will host the propulsion technology maker’s defense business unit and Rocket Shop defense program.
Pat Blevins on The New General Dynamics IT Cloud & Data Analytics Org and Disruptive Tech’s Evolution
Blevins overviews goals of the contractor’s “Solutions Engineering Organization” in Q&A with ExecutiveBiz.
Navy Awards 21 Spots on $750M Command-and-Control Equipment Supply IDIQ
Twenty-eight proposals were submitted for the potential five-year contract vehicle to provide the Navy tools such as imagery and video systems.
Army Grants 4 Firms $480M Counter-Narcoterrorism Support Contract
DoD’s Counter-Narcoterrorism Technology Program office works with other federal agencies on initiatives to counter global narcotics trade.
ASRC Federal Unit to Provide Test Operations, Technical Personnel Under $208M AF Contract
AS and D — the company’s space and defense segment — will perform work over 10 years at the Air Force Research Laboratory.
Navy Adds 608 Contractors to SeaPort-e IDIQ
Close to 5, 000 total companies now hold positions on the vehicle that includes R&D, engineering and IT-related services over a three-year ordering period.
GSA Starts $50B Alliant 2 IT Vehicle Solicitations; Mary Davie Comments
Proposals for the 10-year governmentwide information technology acquisition program are due to GSA by Aug. 29.

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