Executive Mosaic’s GovCon Index retreated Friday in the final trading session of 2016 to close a negative December but but a positive year on a boost to defense stocks in the post-election rally that has swept through U.S. markets.
The GovCon Index closes 2016 with a year-to-date gain of 16.73 percent as the U.S. stock bellwether S&P 500 composite index has added 9.33 percent over 12 months.
Friday’s close also put the GCI at only its second weekly decline since the Nov. 8 election upset win by Donald Trump as investors are betting on deregulation, tax cuts and increases to defense and infrastructure spending.
GovCon Index decliners outnumbered gainers by a 3-to-1 ratio in a light volume session Friday as none of the GCI’s 11 S&P 500 companies registered a gain with co-listed McKesson Corp. (NYSE: MCK) the overall largest net laggard.
McKesson’s decline coincided with the S&P healthcare index’s decline of nearly 0.4 percent.
On a yearly basis, 25 out of 30 GovCon Index companies advanced with Navistar International (NYSE: NAV) the largest percentage gainer overall on Volkswagen‘s investment in the heavy truck manufacturer disclosed in November.
L-3 Communications (NYSE: LLL) led percentage gainers for GovCon Index stocks also included in the S&P 500 and seventh out of the overall 30, while of 11 co-listed companies rose for the year with McKesson the largest decliner in the GCI.
Investors retreated from health shares after the election as Trump made a repeal of Obamacare legislation a cornerstone of his campaign.
Government technology services contractors Science Applications International Corp. (NYSE: SAIC) and ICF (Nasdaq: ICFI) finished second and third respectively with ManTech International (Nasdaq: MANT) in fifth.
Military shipbuilder Huntington Ingalls Industries (NYSE: HII) closed fourth for year-to-date percentage gainers as investors view HII as a beneficiary of Trump’s goal to increase the U.S. Navy‘s fleet size during his term in office.
Orbital ATK (NYSE: OA) closed second-lowest for percentage decliners as the latter is in the process of restating three years of financial results on accounting errors related to a large U.S. Army production contract.
BAE Systems PLC (over-the-counter) and KBR (NYSE: KBR followed in second- and third-worst.
Maximus (NYSE: MMS) registered the GCI’s fifth-largest percentage loss for 2016 in a retreat as the company is a major contractor for the Obamacare implementation effort.
Leidos Holdings (NYSE: LDOS) added 23.15 percent in a year that saw the company announce on Jan. 26 its merger into the former Lockheed Martin (NYSE: LMT) information technology segment in a deal that closed Aug. 16 and created the largest GovCon services player at $10 billion in annual sales.
Lockheed in turn climbed 14.94 percent year-to-date as its flagship F-35 program moved forward and figures to continue as the focal point of investor attention in 2017 after Trump’s various Twitter criticisms of the fighter jet’s costs.
Market Summary for 2016
| Index | Value | % Change | |
|---|---|---|---|
| GovCon Index | 87.977 | +16.73% | |
| S&P 500 | 2, 238.83 | +9.33% | |
| Dow Jones Industrial Average | 19, 762.60 | +13.23% | |
| NASDAQ | 5, 383.12 | +7.29% |
| Advancing GovCon Index Issues | 25 |
| Declining GovCon Index Issues | 5 |
| Unchanged GovCon Index Issues | 0 |
Top GovCon Index Percentage Performers for 2016
| Symbol | Company | $ Current Price | % Change | |
|---|---|---|---|---|
| NAV | Navistar International | 31.37 | +254.07% | |
| SAIC | SAIC | 84.30 | +84.88% | |
| ICFI | ICF | 55.20 | +55.37% | |
| HII | Huntington Ingalls Industries | 184.19 | +45.14% | |
| MANT | ManTech International | 42.25 | +39.52% |
Lowest GovCon Index Percentage Performers for 2016
| Symbol | Company | $ Current Price | % Change | |
|---|---|---|---|---|
| MCK | McKesson Corp. | 140.45 | -28.81% | |
| OA | Orbital ATK | 87.73 | -1.78% | |
| BAESY | BAE Systems PLC | 29.03 | -1.41% | |
| KBR | KBR | 16.69 | -1.39% | |
| MMS | Maximus | 55.79 | -0.92% |
Friday Market Summary
| Index | Value | Net Change | % Change |
|---|---|---|---|
| GovCon Index | 87.977 | -0.308 | -0.349% |
| S&P 500 | 2, 238.83 | -10.43 | -0.46% |
| Dow Jones Industrial Average | 19, 762.60 | -57.18 | -0.29% |
| NASDAQ | 5, 383.12 | -48.97 | -0.90% |
| Advancing GovCon Index Issues | 7 |
| Declining GovCon Index Issues | 23 |
| Unchanged GovCon Index Issues | 0 |
Lowest GovCon Index Net Performers
| Symbol | Company | $ Current Price | Net Change –¾ | % Change |
|---|---|---|---|---|
| MCK | McKesson Corp. * | 140.45 | -1.33 | -0.94% |
| CACI | CACI International | 124.30 | -1.00 | -0.80% |
| LLL | L-3 Communications * | 152.11 | -0.86 | -0.56% |
| OA | Orbital ATK | 87.73 | -0.73 | -0.83% |
| COL | Rockwell Collins | 92.76 | -0.69 | -0.74% |
Lowest GovCon Index Percentage Performers
| Symbol | Company | $ Current Price | Net Change | % Change –¾ |
|---|---|---|---|---|
| NAV | Navistar International | 31.37 | -0.42 | -1.32% |
| KBR | KBR | 16.69 | -0.17 | -1.01% |
| MCK | McKesson Corp. * | 140.45 | -1.33 | -0.94% |
| OA | Orbital ATK | 87.73 | -0.73 | -0.83% |
| CACI | CACI International | 124.30 | -1.00 | -0.80% |
Top GovCon Index Net Performers
| Symbol | Company | $ Current Price | Net Change –´ | % Change |
|---|---|---|---|---|
| ICFI | ICF | 55.20 | +0.35 | +0.64% |
| GIB | CGI Group | 48.03 | +0.31 | +0.65% |
| MMS | Maximus | 55.79 | +0.23 | +0.41% |
| CUB | Cubic Corp. | 47.95 | +0.20 | +0.42% |
| CAE | CAE | 13.97 | +0.06 | +0.43% |
Top GovCon Index Percentage Performers
| Symbol | Company | $ Current Price | Net Change | % Change –´ |
|---|---|---|---|---|
| GIB | CGI Group | 48.03 | +0.31 | +0.65% |
| ICFI | ICF | 55.20 | +0.35 | +0.64% |
| CAE | CAE | 13.97 | +0.06 | +0.43% |
| CUB | Cubic Corp. | 47.95 | +0.20 | +0.42% |
| MMS | Maximus | 55.79 | +0.23 | +0.41% |
