Executive Mosaic’s GovCon Index failed to reverse its steep morning decline Friday despite a significant gain by the S&P 500 as a record intraday plunge by Vectrus (NYSE: VEC) on a large contract loss weighed on the GCI against a 2-to-1 ratio in favor of green stocks.
Six of the GovCon Index’s 11 S&P 500 companies advanced with McKesson Corp. (NYSE: MCK) the top gainer for both the GCI and co-listed stocks as the S&P 500 climbed back to positive on a monthly basis.
McKesson was the U.S. stock bellwether’s 31st-best net gainer Friday as the S&P healthcare index added 1.03 percent.
Friday’s close puts the GovCon Index at a loss of 1.13 percent for September to register its second consecutive monthly decline but the GCI remains in positive on a year-to-date basis at 6.2 percent for three quarters so far compared to the S&P’s 6.3-percent gain over nine months.
Shares in Vectrus plummeted as deep as 50 percent in the first half-hour of trade Friday to a 52-week low of $12.50 after a joint venture of KBR (NYSE: KBR) and Triple Canopy unseated incumbent Vectrus and three other bids to win a one-year, $117.8 million contract for security support services to the U.S. Army in Kuwait.
Colorado Springs-based government services provider Vectrus generated one-third of its 2016 first half revenue from the Kuwait Base Operations and Security Support Services contract and will transition out of the program Dec. 28, when KBR-Triple Canopy LLC will fully take over the successor K-BOSSS 2.0 contract after a four-month phase-in period.
This loss combined with another earlier in September of an Army logistics services contract in Kuwait and Qatar has sent shares in Vectrus down 54.86 percent for the month, while the stock has declined 26.81 percent on a year-to-date basis and 30.63 percent over 12 months.
KBR ended Friday as the GovCon Index’s second-best percentage performer and Vectrus’ stock traded at a volume of 2.51 million shares versus the three-month average of 1.59 million.
Vectrus spun out of former parent Exelis in September 2014 to become an independent services-oriented contractor as the latter company refocused on products prior to its $4.75 billion acquisition by Harris Corp. (NYSE: HRS) in May 2015.
Harris ended second for GCI net advancers Friday and Huntington Ingalls Industries (NYSE: HII) finished third after the military shipbuilder was chosen for a potential five-year, $400 million submarine repair contract by the U.S. Navy.
A sharp reversal by Deutsche Bank’s stock to recover Thursday’s losses and related 1.5-percent gain by the S&P financial sector lifted U.S. stocks Friday after AFP reported the Germany-based company was near a $5.4 billion settlement with the U.S. Justice Department.
The above figure is one-third lower than the $14 billion settlement figure widely reported that DOJ first sought from Deutsche in negotiations.
Market Summary
| Index | Value | Net Change | % Change |
|---|---|---|---|
| GovCon Index | 80.575 | -0.187 | -0.232% |
| S&P 500 | 2, 168.27 | +17.14 | +0.80% |
| Dow Jones Industrial Average | 18, 308.15 | +164.70 | +0.91% |
| NASDAQ | 5, 312.00 | +42.85 | +0.81% |
| Advancing GovCon Index Issues | 20 |
| Declining GovCon Index Issues | 10 |
| Unchanged GovCon Index Issues | 0 |
Lowest GovCon Index Net Performers
| Symbol | Company | $ Current Price | Net Change –¾ | % Change |
|---|---|---|---|---|
| VEC | Vectrus | 15.23 | -12.40 | -44.88% |
| LMT | Lockheed Martin * | 239.72 | -2.62 | -1.08% |
| GD | General Dynamics * | 155.16 | -0.45 | -0.29% |
| RTN | Raytheon * | 136.13 | -0.41 | -0.30% |
| LDOS | Leidos Holdings | 43.28 | -0.20 | -0.46% |
Lowest GovCon Index Percentage Performers
| Symbol | Company | $ Current Price | Net Change | % Change –¾ |
|---|---|---|---|---|
| VEC | Vectrus | 15.23 | -12.40 | -44.88% |
| LMT | Lockheed Martin * | 239.72 | -2.62 | -1.08% |
| BAH | Booz Allen Hamilton | 31.61 | -0.19 | -0.60% |
| CSRA | CSRA * | 26.90 | -0.16 | -0.59% |
| LDOS | Leidos Holdings | 43.28 | -0.20 | -0.46% |
Top GovCon Index Net Performers
| Symbol | Company | $ Current Price | Net Change –´ | % Change |
|---|---|---|---|---|
| MCK | McKesson Corp. * | 166.75 | +2.33 | +1.42% |
| HRS | Harris Corp. * | 91.61 | +1.00 | +1.10% |
| HII | Huntington Ingalls Industries | 153.42 | +0.89 | +0.58% |
| OA | Orbital ATK | 76.23 | +0.78 | +1.03% |
| BA | Boeing * | 131.74 | +0.71 | +0.54% |
Top GovCon Index Percentage Performers
| Symbol | Company | $ Current Price | Net Change | % Change –´ |
|---|---|---|---|---|
| NAV | Navistar International | 22.89 | +0.64 | +2.88% |
| KBR | KBR | 15.13 | +0.22 | +1.48% |
| MCK | McKesson Corp. * | 166.75 | +2.33 | +1.42% |
| CUB | Cubic Corp. | 46.81 | +0.59 | +1.28% |
| ICFI | ICF | 44.32 | +0.56 | +1.28% |
