r/stocks
BAH, LDOS, BWXT, PSN, AVAV - Defence contractor research.
Author backtested mid-cap defense stocks using congressional trading and DoD contract data, finding significant alpha over SPY post-awards.
- Mid-cap defense stocks show significant alpha over SPY following large DoD contract awards based on 3-year backtesting.
- Insider and congressional buying (STOCK Act filings) precede major contract announcements, providing a predictive edge.
- Large-cap defense stocks are avoided as their major contracts are already priced in, making mid-caps more attractive.
I’ve been tracking Congressional STOCK Act filings, executive branch OGE Form 278-T disclosures, USASpending.gov contract awards, institutional ETF flows. All public data. The idea is to spot trends in the data and then research the tickers that are coming up. I’ve been avoiding large cap defence stock as past back testing had indicated that large contracts for the likes of LMT/NOC/RTX are mostly priced in.
Instead, I’ve been focusing on mid cap defence stocks that are likely to get tailwinds from large amounts of US spending. All back testing was carried out on all DoD contracts over $50,000,000 within the last 3 years
Here are my findings for BAH, LDOS, BWXT, PSN and AVAV
BAH – Trump bought March 25^(th) – Contract awarded $7.5B June 8^(th) – likely alfa over SPY after contract:
|Ticker|Events|T+30 alpha|T+30 hit%|T+90 alpha|T+90 hit%|Rating|
|:-|:-|:-|:-|:-|:-|:-|
|BAH|494|\+4.6%|100%|\+4.0%|86%|★★ MODERATE|
LDOS - Trump bought March 30^(th) – Congress were selling regularly but this stoped Oct 2025– Contract awarded $10.5B June 8^(th) – likely alpha over SPY after contract:
|Ticker|Events|T+30 alpha|T+30 hit%|T+90 alpha|T+90 hit%|Rating|
|:-|:-|:-|:-|:-|:-|:-|
|LDOS|492|\+5.0%|100%|\+9.4%|100%|★★★ STRONG|
BWXT – Khanna, Delaney and McClain bought between March and April – Contract awarded $5.8B June 8^(th) – likely alpha over SPY after contract:
|Ticker|Events|T+30 alpha|T+30 hit%|T+90 alpha|T+90 hit%|Rating|
|:-|:-|:-|:-|:-|:-|:-|
|BWXT|351|\+3.4%|69%|4.9%|12%|★★ MODERATE|
PSN – No Presidential or Congressional buys – Contract awarded $1.3B June 8^(th) – Likely alpha over SPY after contract:
|Ticker|Events|T+30 alpha|T+30 hit%|T+90 alpha|T+90 hit%|Rating|
|:-|:-|:-|:-|:-|:-|:-|
|PSN|471|\+2.1%|64%|7.1%|83%|★★ MODERATE|
AVAV \- Cisneros 4× BUY Oct 25–Mar 26 - COO Robert Smith: 1,800 shares, $349.9K, 21 Apr 2026 - CAO Brian Shackley: 707 shares, $149.4K, 19 Mar 2026 – Contract awarded $1B June 8^(th) \- Likely alpha over SPY after contract:
|Ticker|Events|T+30 alpha|T+30 hit%|T+90 alpha|T+90 hit%|Rating|
|:-|:-|:-|:-|:-|:-|:-|
|AVAV|159|\+4.5%|53%|\+1.1%|54%|★★ MODERATE|
So, to summarise, all of these companies show alpha over SPY on back test when they receive a DoD contract. They all received a contract of a fairly large amount 2 days ago. They all show buying signals from either the President, Congress or company insiders, sometimes several of these at the same time.
Disclosure – I hold 527 shares in PSN – I do not hold shares in any of the other tickers mentioned, however that may change soon.
This is not meant to be financial advice. I am not a financial professional. Please do your own research.
Ldos is a buy here
Been holding BWXT since November of last year. PEG is high but it's a solid company that had great earnings recently and their latest acquisition increases their exposure to thermal management. Also has nuclear medicine in their portfolio.
If you like the nuclear route, check out MIR. Just start a position today, should have waited till now since it's under $16/share which I didn't think would happen. More growth oriented than anything, but they have a huge moat on safety sensors for nuclear everything pretty much.
Just ran MIR through my back test. Looks better at 90 days. I'd guess because its smaller so analysts are less likely to be tracking contract awards.
|Ticker|Events|T+30 alpha|T+30 hit%|T+90 alpha|T+90 hit%|Rating|
|:-|:-|:-|:-|:-|:-|:-|
|MIR|57|\+5.5%|52.6%|\+18.9%|72%|★★ MODERATE|
Been watching BAH for a while, just been scared to jump in tbh
BHA is really interesting. It plummeted earlier in the year when Treasury Department cancelled all of its contracts after a former Booz Allen contractor had pleaded guilty to stealing and leaking President Trump's personal tax records to the press. By March it was trading around $80 and thats when Trump bought in. Now its just had a $7.5 billion in new Department of Defense contract! Normaly back testing shows it should beat SPY by 4.6% over the next 30 days. Given the dip earlier this year that could push up considerably.
Not financial advice. Please do your own research.