Ahead Of The Bell: Defense Contractors
HARTFORD, Conn. (AP) ¿ A large increase in Pentagon orders for off-road military vehicles would not only be a boon for several defense contractors, but could lead to new and more-lucrative orders, an analyst said Friday.
Analyst James McIlree of Collins Stewart said an advisory council to the Joint Chiefs of Staff has approved an increase in military all-terrain vehicles from 2,080 to 5,244.
The potential could become much larger if the all-terrain vehicle eventually is transformed into the newer joint light tactical vehicle program, he said. It would yield revenue for the company that wins the contract to more than $2 billion to $2.5 billion for 3,700 vehicles designed to protect troops from bomb blasts, he said.
Suppliers of equipment for the all-terrain vehicles is a "lower risk way to play what could be a winner-take-all game," he said.Companies that have won previous contracts "are positioned to again be winners this cycle," McIlree said. Contract winners before that McIlree said could receive contracts again are Ultralife Corp., Harris Corp., Comtech Telecommunications Corp., Axsys Technologies Inc. and FLIR Systems Inc. McIlree said he believes the field of companies that could win the vehicle contract has been narrowed to Force Protection Inc., Oshkosh Corp., BAE Systems and Navistar International Corp.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV