If this gives you a chill, look at the bright side. It gives you the opportunity to be an entirely new type of war profiteer. No longer must you make money merely in the bloodless tailwind of mega-cap equipment vendors such as Lockheed Martin ( LMT) and General Dynamics ( GD). You've now got a chance to make a few bucks off the men and women who actually shoot to kill. It's a capitalist version of 24, without the commercial breaks. The most interesting and potentially lucrative of the bunch, in my opinion, has the deliciously bland name of DynCorp International ( DCP). Really, it's like giving the name Spot to a vicious Doberman, or meeting a mobster with the name John Smith. DynCorp has been around for five decades, starting as a U.S. Air Force logistics and mission support provider in California and then progressing through a series of mergers into an international provider of defense and aerospace services. In 2003, the company was acquired by major Pentagon information technology provider Computer Services ( CSC), but then it was, in rapid succession, sold to the defense-focused private equity firm Veritas Capital and then spun out as a separate company in an initial public offering last May.
Back Where We Started
The market shot the IPO full of holes after an abrupt management change, and shares sank from $15 to around $8.75 in three months. Yet before executives had a chance to retaliate by sending a brigade of employees on a mission to fire back at Wall Street, DynCorp won a couple of large and lucrative contracts and rather quickly doubled in value to $16.50.