Buy U.S. government services cos during shutdown - SunTrust Robinson

ICF International

04/01/2019 13:40

** Partial U.S. government shutdown and swooning equity
market creating attractive entry points for commercial and
government IT services cos, writes SunTrust Robinson Humphrey
analyst Tobey Sommer
    ** Sector outperformed broad indices during the '07-'09
recession and traded up 12 pct six months after the last
significant shutdown in 2013 vs. 7.6 pct gain for the S&P 500
 .SPX  - Sommer
    ** Group down 1.3 pct vs. 0.5 pct decline for the S&P 500
since the run-up to the shutdown on Dec. 21 - SunTrust
    ** Rates ICF International  ICFI.O , Leidos Holdings
 LDOS.N , Science Applications International  SAIC.N , Booz
Allen Hamilton Holding  BAH.N , Engility Holdings  EGL.N ,
ManTech International  MANT.O , KEYW Holding Corp  KEYW.O  and
ASGN Inc  ASGN.N  "buy"  
    ** Rates CACI International Inc  CACI.N  and Kforce Inc
 KFRC.O  "hold" 
    ** Timing of shutdown was particularly good, as productivity
is already seasonally low around the holidays and cos are likely
to be able to make up a large portion of work by the end of Q1,
assuming the shutdown lasts weeks, not months - Sommer   
    ** On many contracts govt agencies deem consultants as
mission-essential personnel and hence excluded from the shutdown
- SunTrust
 

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SunTrust on govt. services cos    https://tmsnrt.rs/2RrDMtH
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 (Reporting by Uday Sampath in Bengaluru)
 ((Reuters Messaging:
UdaySampath.Kumar.thomsonreuters.com@reuters.net))