Shares of defense, intelligence, and other government services contracting firm CACI
CACI, caught up along with Titan
These are supposed to be good times for CACI, which only recently celebrated the acquisition of American Management Systems'
On Wednesday, meanwhile, CACI said it expects fiscal first-quarter sales growth of more than 50%, along with net income growth of between 23% and 30%. It also noted an $88 million Navy contract. If the government eventually disqualifies CACI from bidding on federal contracts, however, the good news mentioned above will be moot -- and then some. Heck, fully 92% of the company's revenues came from the government in the fiscal year ended June 30, a large chunk of that coming from the Army. Surely the potential for losing that much business is worth more than an 11% drop? Perhaps, but investors are seemingly betting that won't happen.
That makes sense, given that such a determination from the government would likely destroy the company as we know it today and create potentially costly havoc among its large and highly trained workforce. It's worth adding that this personnel carries with it many thousands of dollars worth of valuable secret and top-secret government credentials needed to perform sensitive work. Whatever the case, a lot of people will be watching this story very closely.
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Fool contributor Dave Marino-Nachison doesn't own any of the companies in this story.