Executive Mosaic’s GovCon Index advanced for a third consecutive session Monday on a mix of contributions from large primes and services stocks but a sharp fall by Cubic Corp. (NYSE: CUB) pared the GCI’s gain after the contractor’s guidance missed analysts’ expectations.
GovCon Index gainers outnumbered decliners by a 5-to-1 ratio and seven of its 11 S&P 500 components closed green with General Dynamics (NYSE: GD) the top net performer in the GCI overall and among co-listed stocks.
KBR (NYSE: KBR) led GCI percentage advancers after MKM Partners upgraded the stock to “Buy” from “Neutral” with a $21 price target versus the prior $15 mark as analyst Daniel Scott noted the company’s mix of government services and technology business added this year through acquisitions along with its traditional hydrocarbons business.
MKM Partners analyst Daniel Scott told analysts in a research note the firm expects contract activity in the aerospace, defense and government technology sectors to pick up under incoming President Donald Trump’s administration with a Republican-controlled Congress.
Leidos Holdings (NYSE: LDOS) climbed on a Credit Suisse upgrade to “Outperform” from “Neutral” in a note to investors Monday with a price target lift to $54 from $40.50.
Credit Suisse based its new rating on expectations of upside resulting from cost synergies out of its August merger into the former Lockheed Martin (NYSE: LMT) services segment, according to the Washington Business Journal.
Nine GovCon Index companies added at least $1.00 in Monday trade and four hit new 52-week highs during the session.
Cubic Corp. (NYSE: CUB) weighed on the GCI as its lowest net and percentage performer after the San Diego-based defense and transportation contractor issued full-year earnings and revenue guidance below Wall Street analysts’ expectations.
A 2-percent gain in energy stocks led the S&P 500 to a record high close with all 11 other major sectors higher as investors showed optimism that OPEC is near an agreement on a production cut.
Crude oil futures in New York settled up 3.9 percent to $47.49 and hit a three-week high during the session, according to Reuters.
Market Summary
| Index | Value | Net Change | % Change |
|---|---|---|---|
| GovCon Index | 87.608 | +0.359 | +0.411% |
| S&P 500 | 2, 198.18 | +16.28 | +0.75% |
| Dow Jones Industrial Average | 18, 956.69 | +88.76 | +0.47% |
| NASDAQ | 5, 368.86 | +47.35 | +0.89% |
| Advancing GovCon Index Issues | 25 |
| Declining GovCon Index Issues | 5 |
| Unchanged GovCon Index Issues | 0 |
Top GovCon Index Net Gainers
| Symbol | Company | $ Current Price | Net Change –´ | % Change |
|---|---|---|---|---|
| GD | General Dynamics * | 168.43 | +1.81 | +1.09% |
| CACI | CACI International | 126.10 | +1.40 | +1.12% |
| SAIC | SAIC | 80.88 | +1.39 | +1.75% |
| MCK | McKesson Corp. * | 141.35 | +1.30 | +0.93% |
| GIB | CGI Group | 48.14 | +1.10 | +2.34% |
Top GovCon Index Percentage Gainers
| Symbol | Company | $ Current Price | Net Change | % Change –´ |
|---|---|---|---|---|
| KBR | KBR | 16.78 | +0.53 | +3.26% |
| GIB | CGI Group | 48.14 | +1.10 | +2.34% |
| LDOS | Leidos Holdings | 49.45 | +1.09 | +2.25% |
| BAESY | BAE Systems | 29.935 | +0.625 | +2.132% |
| ICFI | ICF | 52.60 | +1.00 | +1.94% |
Lowest GovCon Index Net Performers
| Symbol | Company | $ Current Price | Net Change –¾ | % Change |
|---|---|---|---|---|
| CUB | Cubic Corp. | 44.20 | -5.05 | -10.25% |
| CSRA | CSRA * | 31.31 | -0.36 | -1.14% |
| MANT | ManTech International | 43.34 | -0.16 | -0.37% |
| LLL | L-3 Communications * | 152.11 | -0.09 | -0.06% |
| EGL | Engility Holdings | 35.00 | -0.01 | -0.03% |
Lowest GovCon Index Percentage Performers
| Symbol | Company | $ Current Price | Net Change | % Change –¾ |
|---|---|---|---|---|
| CUB | Cubic Corp. | 44.20 | -5.05 | -10.25% |
| CSRA | CSRA * | 31.31 | -0.36 | -1.14% |
| MANT | ManTech International | 43.34 | -0.16 | -0.37% |
| LLL | L-3 Communications * | 152.11 | -0.09 | -0.06% |
| EGL | Engility Holdings | 35.00 | -0.01 | -0.03% |
