What: Shares of industrial contractor Oshkosh Corporation jumped as much as 12% early in trading today after it announced a new contract.
So what: The U.S. Army awarded Oshkosh a $6.7 billion fixed-price contract to build the Joint Light Tactical Vehicle. During the contract, Oshkosh says it expects to build 17,000 vehicles starting at a low rate of production for the first three years and then ramping to full production over the final five years of the contact.
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Now what: This is a huge win and could be a major financial boost for a company that's seen revenue slip in the last couple of years as military spending declined. It's also a major contract for a company worth $3.2 billion even after today's pop.
Given the stock's current P/E ratio of 13 and the long-term stability a contract like this provides, I think long-term investors are getting a solid value even after today's spike in the stock.
The article Why Shares of Oshkosh Corporation Popped 12% Today originally appeared on Fool.com.
Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.