r/wallstreetbets
Defence Contractor Research — BAH, LDOS, BWXT, PSN, AVAV
Tracks congressional trades and DoD contracts to find mid-cap defense stocks with high post-contract alpha; LDOS is the top pick.
- Mid-cap defense stocks are likely to benefit from significant US government spending.
- Backtesting shows strong historical alpha and high hit rates for these stocks following major contract awards.
- Congressional and executive branch buying patterns align with subsequent contract awards, indicating informed momentum.
https://preview.redd.it/wle8sdd31i6h1.png?width=468&format=png&auto=webp&s=de4dd5e4a34e04161ffb80b000f40cff21a22b04
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.
TLDR... OP is tracking insider trading on publicly traded government contractors and using that behavior to buy/sell shares.
American shocked other countries exist.
I'm a Brit. We spell it with a c
Defence and defense are two spellings of the exact same noun, meaning protection, a legal plea, or a sports tactic. The choice simply comes down to regional spelling rules: defence (with a "c") is standard in British English (UK, Australia, Canada), while defense (with an "s") is used in American English
my bad, puts on US literacy
No worries and to be fair my spelling is usually shocking
Its funny because there's not a literate English speaker in the commonwealth who's not aware of American spelling differences.
That’s why I love Reddit. The inbuilt spell check!
Soooo...are we going to address your use of "alfa" for "alpha"?
I'd buy PSN because I have a PlayStation
Solid advise here gents. Its our next meme stock.
Been following some of these defense names for while now and this data is pretty solid. LDOS especially caught my attention since those congressional selling patterns stopping is usually good indicator something brewing. The timing with all these contracts dropping June 8th definitely not coincidence.
One thing I learned from tracking defense stocks is that mid cap ones like these tend to have more volatile moves when contracts hit compared to the big boys. Your backtesting confirms what I've seen - LMT and RTX barely move anymore on contract news since everyone expects them to win everything anyway. But these smaller players can really pop when they land something significant.
PSN looks interesting even without the political buying signals - that T+90 performance in your data is pretty compelling. BWXT worries me bit though with that low hit rate on longer timeframe, might be more of quick swing play. Defense sector overall has been getting lot of tailwinds lately so timing seems right for this kind of strategy.
Defense stocks will never get the same tech stock spike because their old school CEOs are banking on dividends and not pump and dump dilution schema. You might as well throw your money into power utilities for better AI infrastructure returns
That's definitely true for the big names but less true on the mid caps. I can get SPY + 9.4% over 90 days. Sell and look at something else
Defense stocks are among the best performing of all industries. Slightly beating the broader Industrials sector, IIRC.
Can you send a link showing where you found 🥭 buying BAH? I’ve been digging around and can’t find any evidence of that. Would be really interesting considering he got the Treasury to sever ties with BAH over them leaking his tax records
it was from this 278T filed by Trump
494 events with a 100% T+30 hit rate is statistically implausible for any real signal.
AVAV down 15% this week :/
Yep, there are definitely some issues there. Missed earnings and a potential securities fraud lawsuit.
Where are you seeing these June 8th contracts? I'm not finding them in USASpending.gov
They are all pulled from DoD website. https://www.war.gov/News/Contracts/ Full details of the contracts are:
|LDOS|$10.5B|DoD IT, intelligence systems|
|:-|:-|:-|
|BAH|$7.5B|DoD consulting/analytics (new awards post-Treasury cancellation)|
|BWXT|$5.6B|Naval nuclear propulsion ($1.4B May 7 alone)|
|PSN|$1.3B|Infrastructure/engineering|
|AVAV|Ongoing|Tactical UAS (Switchblade, Puma)|
KBR
Any reason why? I can insiders buying and a new $95m contract, but no political action and their back test looks horrible. Every time they've won a gov contract in the last three years, their stock price has gone down.
Great stuff!