Executive Mosaic’s GovCon Index rose Monday in an attempt to close above the 80-point barrier for the first time since Sept. 12 on gains by large defense primes and services-oriented companies.
The GCI’s positive movement contrasted activity in U.S. financial markets as stocks turned south in the final hour of trade and closed mixed ahead of the Federal Reserve‘s two-day policy meeting set to start Tuesday.
GovCon Index gainers outnumbered laggers 9-to-1 with McKesson Corp. (NYSE: MCK) as the GCI’s only S&P 500-listed company to end red in conjunction with the S&P healthcare index’s decline of nearly one-quarter a percent.
Lockheed Martin (NYSE: LMT) led all GCI net performers after the defense contractor’s stock was upgraded by Wells Fargo to “Outperform” from “Market Perform” with a price target boost to $275-$280 from $255-260.
Wells Fargo said in a note to investors Lockheed could see earnings per share grow at a 20-percent compound annual growth rate through 2020 and EPS could rise above $20 by then on higher U.S. defense spending and F-35 growth.
Third quarter earnings could be “messy” for Lockheed with a potential 2016 EPS forecast cut due to factors such as the services segment divestiture and subsequent merger of that business into Leidos Holdings (NYSE: LDOS) in August.
Engility Holdings (NYSE: EGL), CACI International (NYSE: CACI), General Dynamics (NYSE: GD) and Science Applications International Corp. (NYSE: SAIC) rounded out the top five.
Chantilly, Virginia-based Engility was the top percentage gainer along with Vectrus (NYSE: VEC), CSRA (NYSE: CSRA), Maximus (NYSE: MMS) and Booz Allen Hamilton (NYSE: BAH).
ICF International (Nasdaq: ICFI) hit a new 52-week high during intraday trade Monday shortly before 12:00 p.m. Eastern time.
Military shipbuilder Huntington Ingalls Industries (NYSE: HII) ended as the GCI’s worst net performer.
The S&P’s financial index climbed 1.18 percent as traders largely expect the Federal Reserve to leave U.S. benchmark interest rates unchanged this month and the Bank of Japan to hold its borrowing costs at current levels.
Futures markets have priced in 15 percent odds for a U.S. rate hike in September and a 56.5 percent chance for a move in December, according to Reuters.
Gains by bank and other financial stocks were offset by declines in the telecommunications sector at nearly three quarters of a percent.
Market Summary
| Index | Value | Net Change | % Change |
|---|---|---|---|
| GovCon Index | 79.457 | +0.500 | +0.633% |
| S&P 500 | 2, 139.12 | -0.04 | -0.00% |
| Dow Jones Industrial Average | 18, 120.17 | -3.63 | -0.02% |
| NASDAQ | 5, 235.03 | -9.54 | -0.18% |
| Advancing GovCon Index Issues | 26 |
| Declining GovCon Index Issues | 3 |
| Unchanged GovCon Index Issues | 1 |
Top GovCon Index Net Performers
| Symbol | Company | $ Current Price | Net Change –´ | % Change |
|---|---|---|---|---|
| LMT | Lockheed Martin * | 240.88 | +3.43 | +1.44% |
| EGL | Engility Holdings | 31.21 | +1.68 | +5.69% |
| CACI | CACI International | 98.52 | +1.44 | +1.48% |
| GD | General Dynamics * | 152.17 | +1.42 | +0.94% |
| SAIC | SAIC | 67.85 | +1.00 | +1.50% |
Top GovCon Index Percentage Performers
| Symbol | Company | $ Current Price | Net Change | % Change –´ |
|---|---|---|---|---|
| EGL | Engility Holdings | 31.21 | +1.68 | +5.69% |
| VEC | Vectrus | 27.69 | +0.66 | +2.44% |
| CSRA | CSRA * | 26.20 | +0.51 | +1.99% |
| MMS | Maximus | 56.70 | +0.95 | +1.70% |
| BAH | Booz Allen Hamilton | 30.15 | +0.49 | +1.65% |
Lowest GovCon Index Net Performers
| Symbol | Company | $ Current Price | Net Change –¾ | % Change |
|---|---|---|---|---|
| HII | Huntington Ingalls Industries | 154.67 | -1.69 | -1.08% |
| MCK | McKesson Corp. * | 165.00 | -1.16 | -0.70% |
| I | Intelsat | 2.70 | -0.11 | -3.91% |
Lowest GovCon Index Percentage Performers
| Symbol | Company | $ Current Price | Net Change | % Change –¾ |
|---|---|---|---|---|
| I | Intelsat | 2.70 | -0.11 | -3.91% |
| HII | Huntington Ingalls Industries | 154.67 | -1.69 | -1.08% |
| MCK | McKesson Corporation * | 165.00 | -1.16 | -0.70% |
