(Updated with comment from Versar over contract details, fresh stock quote and volume move.)
SPRINGFIELD, Va. (TheStreet) -- Versar (VSR) shares climbed 35% Wednesday on heavy volume after the technical services provider said it was among several companies awarded a $3 billion government contract.
Versar said it is one of sixteen small businesses awarded a five-year, $3 billion contract by the Department of the Air Force's Center for Engineering and the Environment, or AFCEE. The five-year contract will have an eight-year performance period and be worldwide in geographic scope, the company said. Since December 2003, Versar has completed more than $35 million of work for the AFCEE.
Versar shares were rallying sharply higher on big volume, rising $1.27, or 34.5%, to $4.95. Earlier, the stock touched an intraday high of $5.70. More than 1.2 million shares changed hands in the first three hours of trading Wednesday, compared to the stock's three-month average daily volume of 16,290, according to Yahoo! Finance.Versar has a 6.8 million-share float with a small short interest float of only 0.1% as of Aug. 11, according to Yahoo! Finance. Nearly 19% of the company's shares are held by insiders and another 33% is held by institutions. While some argued Versar is still undervalued, most investor posts on Internet message boards expressed concern with the way the company's press release was written. Traders said the release was confusing whether Versar was awarded one of several $3 billion contracts, or whether it would split one contract with 15 other companies. "The $3 billion is the contract capacity for all 16 companies," said Michael Abram, Versar's senior vice president told TheStreet.com. "So all 16 companies will be part of that, assuming the Air Force allocates the whole $3 billion over the eight-year ordering period." Other investor posts argued that the relatively small float means daytraders could push the stock price even higher. Read more about today's high-volume stocks like Terrestar in earlier "Pump Up the Volume" posts. -- Written by Robert Holmes in New York.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $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
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV