What: Shares of industrial contractor Oshkosh Corporation (OSK -0.77%) jumped as much as 12% early in trading today after it announced a new contract.
So what: The U.S. Army awarded Oshkosh a $6.7 billion fixed-price contract to build the Joint Light Tactical Vehicle. During the contract, Oshkosh says it expects to build 17,000 vehicles starting at a low rate of production for the first three years and then ramping to full production over the final five years of the contact.
Now what: This is a huge win and could be a major financial boost for a company that's seen revenue slip in the last couple of years as military spending declined. It's also a major contract for a company worth $3.2 billion even after today's pop.
Given the stock's current P/E ratio of 13 and the long-term stability a contract like this provides, I think long-term investors are getting a solid value even after today's spike in the stock.
