Investors were at no loss for interesting news to ponder last week.

We started off with a shocker of an announcement that Bank of America's (NYSE:BAC) Ken Lewis is on his way out, and ended with the news that gold is back in. In between-times, Boeing (NYSE:BA) delayed delivery of its new 747-8 air freighter (big surprise) and Gannett (NYSE:GCI) received the dreaded walk of shame for its inability to adjust to changing consumer habits.

Meanwhile, the embattled defense sector just kept plugging along, booking new contracts, yet watching its market cap fall farther behind a surging market regardless:

Company

Starting Price*

Recent Price

Total Return

General Dynamics (NYSE:GD)

$51.24**

$65.28

27.4%

Raytheon (NYSE:RTN)

$41.99**

$45.59

8.6%

Lockheed Martin (NYSE:LMT)

$77.69**

$73.00

(6%)

AeroVironment

$29.96

$28.46

(5%)

iRobot

$11.49

$11.52

0.3%

Force Protection (NASDAQ:FRPT)

$4.57

$6.15

34.6%

AVERAGE RETURN

 

 

10%

S&P Spyder

$87.75**

$106.61

21.5%

DIFFERENCE

 

 

(11.5)

Source: Yahoo! Finance.
*Tracking began on July 10, 2009. Portfolio is equal-weighted, with "recent price" being set at market close on the Thursday preceding publication, and adjusted for stock splits and dividends.
**Adjusted for dividends.

Lockheed has its warplanes, Raytheon its rockets, AeroVironment and iRobot their hi-tech mech-warriors, but none of these companies fared well last week. To the contrary, last week's biggest winners were the "grunts" of the portfolio -- ground warfare dominators General Dynamics and Force Protection.

General Dynamics takes command
Of the two, General D captured by far the most ground last week. On Monday, the tank maker won a $430 million tank engineering contract from the U.S. Army's Tank Automotive Research, Development and Engineering Center. It followed this up the next day with a double-header at-sea -- $320 million to perform further engineering work on the U.S. Navy's nuclear submarine fleet; and another $140 million to perform IT work for the U.S. Coast Guard.

But General Dynamics gets more done by week-end that most companies accomplish all year long -- and it wasn't finished yet. Fast-forward a few more days, and we found the General marking its biggest success of the week, inking a deal to sell 352 of its Stryker armored personnel carriers to the military for nearly $650 million. When you add it all up, that makes ...

Pencils down
... more than $1.5 billion in new contracts that the General captured last week. Not bad for five days' work, huh?

Meanwhile, as General Dynamics was busy landing $1.5 billion of new business and reaping nearly 5% in market-cap gains for its efforts, tiny sometimes-rival-sometimes-partner Force Protection was rewarding its shareholders for doing ... nothing.

Apparently. At least for now.

Force projections
Search all you like, and you won't find a word on Yahoo! Finance about new contract wins for tiny Force Protection. So what explains the company's startling 12% rise in stock price last week?

The answer, it would appear, is that rumors are starting to swirl concerning the company's much-ballyhooed Ocelot modular armored truck. As we discussed last month, Force developed the Ocelot to compete in the U.K. Ministry of Defense's Light Protected Patrol Vehicle contest. There's a bullish sentiment on Force's chances of winning a contract here -- despite all past history to the contrary. That hope alone seems to have undergirded Force's surprising rush forward last week.

Foolish takeaway
A few words of caution may be in order here. Analysts have made bullish prognostications concerning Force in the past, only to be let down -- and to let investors down -- when big contracts were ultimately awarded. Force's spotted history of success in big armored vehicle competitions argues in favor of adopting a cautious stance on the Ocelot's chances.

That said, with the stock selling for just 10 times trailing earnings -- earnings projected to grow at 20% annually over the next five years -- Force Protection seems to offer a fairly wide margin of safety. If you're game to throw the dice on this one, I couldn't blame you. Fact is, I'm pretty tempted myself.

AeroVironment and iRobot are Motley Fool Rule Breakers recommendations. General Dynamics is a Motley Fool Inside Value selection. Fool contributor Rich Smith already owns shares of Force Protection -- and of Boeing and AeroVironment, too. And we should also point out that no matter how much he likes the stock, he cannot trade it for at least 10 days after this column is published. Why do we tell you this? Because The Motley Fool has a bulletproof disclosure policy, that's why.