Executive Mosaic’s GovCon Index closed in narrow range Tuesday despite a majority of the session in positive as declines by aerospace and defense primes offset gains by Harris Corp. (NYSE: HRS) on news of a pending divestiture and Engility Corp. (NYSE: EGL) after quarterly earnings that exceeded Wall Street’s expectations.
GovCon Index decliners outnumbered advancers at a 2-to-1 ratio and three of its 11 S&P 500 stocks closed green with co-listed Harris the best performer in the GCI overall followed by Engility and pharmaceutical services company McKesson Corp. (NYSE: MCK).
U.S. stocks also declined on the month’s first trading session as the election continued to loom over markets and the Federal Reserve started its two-day policy summit with current investor expectations of no interest rate hike.
Harris climbed after the military radio maker said it will sell its CapRock maritime communications business to SpeedCast International for $425 million as part of an ongoing portfolio review to look at businesses not part of what CEO Bill Brown described to analysts Tuesday as a strategy focused on “technology differentiation.”
Jana Partners gained two mutual board of directors appointments in August after the Barry Rosenstein-founded activist hedge fund became one of Harris’ 10 largest shareholders.
Melbourne, Florida-based Harris also reported fiscal year 2017 first quarter earnings and revenue above analyst forecasts and held to full-year financial guidance.
Government services contractor Engility topped Wall Street’s estimate on earnings with revenue short of what analysts expected and also reiterated its full-year financial outlook.
CEO Lynn Dugle and Chief Financial Officer Wayne Rehberger subsequently updated investors in Engility’s third quarter earnings call on the contractor’s strategy shift to “best-value” program versus lowest-price, technically acceptable work.
Volume in Harris shares totaled 1.4 million shares traded to double the three-month average, while Engility’s stock also exceeded that 90-day benchmark two-fold at 280, 085 shares.
CACI International (NYSE: CACI) ended as the GovCon Index’s fourth-best net performer after the company was awarded a potential five-year, $1.77 billion task order to support the Defense Department‘s Joint Improvised-Threat Defeat Organization.
Fairfax, Virginia-based contractor ICF (Nasdaq: ICFI) was scheduled to report second quarter financial results after markets close Tuesday.
Houston-based KBR (NYSE: KBR) closed as the GovCon Index’s fourth-lowest percentage mover after it reported a third quarter net loss.
Aerospace electronics maker Rockwell Collins (NYSE: COL) ended its five-day gain streak to close as the GCI’s largest lagger with other aerospace-and-defense stocks Raytheon (NYSE: RTN) and Lockheed Martin (NYSE: LMT) at second and third as all closed down by at least $1.00 each.
Rockwell Collins’ volume totaled 2.3 million shares at twice the three-month average as the stock has entered a period of active trading since its Oct. 23 announcement of the B/E Aerospace (Nasdaq: BEAV) acquisition.
All 11 S&P 500 sectors closed lower with real estate as the worst-performing sector.
Market Summary
| Index | Value | Net Change | % Change |
|---|---|---|---|
| GovCon Index | 78.977 | -0.044 | -0.056% |
| S&P 500 | 2, 111.72 | -14.43 | -0.68% |
| Dow Jones Industrial Average | 18, 037.10 | -105.32 | -0.58% |
| NASDAQ | 5, 153.58 | -35.56 | -0.69% |
| Advancing GovCon Index Issues | 8 |
| Declining GovCon Index Issues | 22 |
| Unchanged GovCon Index Issues | 0 |
Lowest GovCon Index Net Performers
| Symbol | Company | $ Current Price | Net Change –¾ | % Change |
|---|---|---|---|---|
| COL | Rockwell Collins | 82.49 | -1.83 | -2.17% |
| RTN | Raytheon * | 135.08 | -1.53 | -1.12% |
| LMT | Lockheed Martin * | 244.98 | -1.40 | -0.57% |
| MMS | Maximus | 51.09 | -0.97 | -1.86% |
| GD | General Dynamics * | 149.98 | -0.76 | -0.50% |
Lowest GovCon Index Percentage Performers
| Symbol | Company | $ Current Price | Net Change | % Change –¾ |
|---|---|---|---|---|
| COL | Rockwell Collins | 82.49 | -1.83 | -2.17% |
| MMS | Maximus | 51.09 | -0.97 | -1.86% |
| MANT | ManTech International | 38.19 | -0.64 | -1.65% |
| KBR | KBR | 14.57 | -0.24 | -1.62% |
| ACM | AECOM | 27.42 | -0.43 | -1.54% |
Top GovCon Index Net Performers
| Symbol | Company | $ Current Price | Net Change –´ | % Change |
|---|---|---|---|---|
| HRS | Harris Corp. * | 92.73 | +3.52 | +3.95% |
| EGL | Engility Holdings, Inc. | 31.79 | +3.06 | +10.65% |
| MCK | McKesson Corp. * | 129.27 | +2.10 | +1.65% |
| CACI | CACI International | 99.45 | +1.60 | +1.64% |
| NAV | Navistar International | 23.01 | +0.71 | +3.18% |
Top GovCon Index Percentage Performers
| Symbol | Company | $ Current Price | Net Change | % Change –´ |
|---|---|---|---|---|
| EGL | Engility Holdings | 31.79 | +3.06 | +10.65% |
| HRS | Harris Corp. * | 92.73 | +3.52 | +3.95% |
| NAV | Navistar International | 23.01 | +0.71 | +3.18% |
| MCK | McKesson Corp. * | 129.27 | +2.10 | +1.65% |
| CACI | CACI International | 99.45 | +1.60 | +1.64% |
