Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Defense News Roundup: Lockheed's Aegis Missile Defense Award Approaches the $1.8 Billion Mark

The U.S. military has a reputation as a somewhat secretive organization. But in one respect at least, the Pentagon is one of the most "open" of our government agencies. Every day of the week, rain or shine, the Department of Defense tells U.S. taxpayers what contracts it's issued, to whom, and for how much -- all right out in the open on its website.

So what has the Pentagon been up to this week?

DoD is budgeted to spend about $6.2 billion a week on military hardware, infrastructure projects, and supplies in fiscal 2014. (A further $5.6 billion a week goes to pay the salaries and benefits of U.S. servicemen and servicewomen.) So far this year, the Pentagon has announced contracts worth approximately $39.95 billion, including $3.17 billion awarded through Thursday last week.

 And what did the generals get for their (read "our") money?

"Star Wars" on Earth
In a relatively lucrative week for contractors, small-dollar-value contracts were arguably among the most interesting contracts awarded last week. Among these was a small win for the Navy's Aegis Ballistic Missile Defense system, which over the decades since its creation has morphed from a system primarily dedicated to shooting down hostile aircraft, into a super-system capable of shooting down incoming intercontinental ballistic missiles.

Last week, the Pentagon awarded Lockheed Martin (NYSE: LMT  ) $14 million to "identify technology" to make further upgrades to Aegis BMD (as the robust, anti-ICBM version is called). In total, Lockheed's BMD contract is now worth nearly $1.8 billion. In related news, Lockheed also won $45 million in funding to supply the U.S. Navy with an unspecified number of Aegis Weapon System MK 7 equipment sets.

Couldn't you just wet a finger and hold it up?
Another interesting win for Lockheed came on Tuesday, when the Pentagon awarded the company a $9 million contract to develop an "affordable, rugged, set-and-start" ground-based wind "profiler." When completed next year, Lockheed's new device is expected to precisely measure wind speeds and vectors at supply drop sites. The idea being that this will assist airplanes and helicopters making parachute supply drops to troops at forward operating bases to more accurately time their drops, ideally resulting in deliveries arriving within 50 meters of where they're aimed at.

Anything good on the radio?
Of course, the big news of the week came Wednesday, when the Pentagon announced a $988 million contract to have defense contractors Exelis (NYSE: XLS  ) , General Dynamics (NYSE: GD  ) , Harris Corp (NYSE: HRS  ) , and Thales Defense build it thousands of Soldier Radio Waveform, or SRW, Applique Radio Systems. These single-channel radios will be used by Army Brigade Combat Teams to better communicate with the Army's larger tactical communications network.

Opportunities on the horizon
So much for the contracts that everyone knows about. Now, let's end with one contract that may not yet be incorporated into defense contractors' stock prices.

On Monday, we learned that the U.S. Defense Security Cooperation Agency has notified Congress of plans to sell the Government of South Korea a package of about 100 Sidewinder air-to-air missiles from Raytheon (NYSE: RTN  ) . These will include 24 "CATM" rounds (dummy missiles used on fighter pilots' training missions) and 76 live rounds. DSCA puts the value of this sale at $98 million.

This contract hasn't been officially announced. For now, few investors are factoring it into their valuations of the company. Very few people know about it -- except that now, you do.

Thanks for all the great stock tips, Pentagon!
You don't always have to look far to find good investments. Sometimes, profiting from our increasingly global economy can be as easy as investing in your own backyard -- and the Pentagon's helpful habit of publishing all its contracts daily as they're awarded certainly makes that easier. Want to find more "easy to understand" investments? Read The Motley Fool's brand-new special report, The Motley Fool's 3 Stocks to Own Forever. These picks are free today! Just click here now to uncover the three companies we love. 

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2912458, ~/Articles/ArticleHandler.aspx, 9/2/2015 12:46:26 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Rich Smith

As a defense writer for The Motley Fool, I focus on defense and aerospace stocks. My job? Every day of the week, I'm monitoring the news, figuring out the winners and losers, and tracking down the promising companies for you to invest in. Follow me on Twitter or Facebook for the most important developments in defense & aerospace, and other great stories.

Today's Market

updated 3 hours ago Sponsored by:
DOW 16,058.35 -469.68 -2.84%
S&P 500 1,913.85 -58.33 -2.96%
NASD 4,636.11 -140.40 -2.94%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/1/2015 4:05 PM
GD $138.89 Down -3.14 -2.21%
General Dynamics CAPS Rating: ****
HRS $74.64 Down -2.18 -2.84%
Harris Corp CAPS Rating: *****
LMT $197.62 Down -3.56 -1.77%
Lockheed Martin Co… CAPS Rating: ****
RTN $100.04 Down -2.52 -2.46%
Raytheon Company CAPS Rating: ****
XLS $0.00 Down +0.00 +0.00%
Exelis Inc. CAPS Rating: *****