Insider information trading analysis of Defense companies prior to major contract awards
insiderinformati00alex.pdf (2.685Mb)Abstract
The purpose of this thesis is to examine government contractor stock activity prior to contract award announcements to determine if insider information inequalities may have occurred. The stock price data of four defense companies for the 30 days prior to a contract award is analyzed. The Capital Asset Pricing Model was utilized to determine if abnormal returns were present. When abnormal returns are found, all available news related items were investigated to find possible explanations. Abnormal returns were not found in two of the four companies analyzed. The abnormal returns of the other two companies appeared correlated to a surprise positive earnings announcement and a strong sector rally rather than directly to the contract award. The contract award process within the defense industry appears to be effective in these cases with no apparent flaws within the information flow. The current regulations regarding trading based on insider information monitored by the Securities and Exchange Commission also appears to be effective
Rights
This publication is a work of the U.S. Government as defined in Title 17, United States Code, Section 101. Copyright protection is not available for this work in the United States.Collections
Related items
Showing items related by title, author, creator and subject.
-
Corporate consolidation an event study of historic stock prices in the defense aerospace industry
(Monterey, California. Naval Postgraduate School, 2009-12);P 500 index while considering two areas of primary focus. The first area of focus is to determine how quickly the market absorbs the corporate consolidation announcement by examining the absolute maximum return on the day ... -
A framework for measuring the impact of the Monterey Navy Corporate Business Course on the Navy
(Monterey, California. Naval Postgraduate School, 2009-09-30); NPS-HR-09-143The need exists to improve the Navy Corporate Business Course (NCBC) evaluation procedures, which have evolved on a rather ad hoc basis. There may be redundancies as well as gaps in the current system. Further, as with all ... -
Defense industry mergers and monopoly power : analysis of abnormal earnings using the Edwards-Bell-Ohlson model
(Monterey, California. Naval Postgraduate School, 1997-12);Recent defense industry consolidation has created several large defense firms. As a result of merger activity with their suppliers and competitors, these firms account for an increasing percentage of sales to the Department ...
