HARTFORD, Conn. (AP) -- Shares jumped Monday at two companies that could benefit from a Pentagon decision on the supplier of mine-protected vehicles for U.S. troops.
Analyst James McIlree of Collins Stewart said in a note to investors Monday he believes Force Protection Inc., BAE Systems and Ultralife Corp. could be the leading candidates, and the selection could be as early as Tuesday.
"We believe the likely selection is between Force Protection and BAE Systems, although it would be foolhardy to count anyone out," he said.
The Obama administration in April asked Congress to approve $2.7 billion to buy 1,000 mine-resistant vehicles for Afghanistan.
McIlree said the Army may award a single contract to one company while encouraging subcontracting so all vendors participate in production. Such a move could eliminate or reduce the likelihood of a company protesting the Army's decision, he said.
"We continue to believe the risk/reward for Force looks attractive as a win could propel the stock into the mid-teens, while a loss could result in downside of a few dollars per share," McIlree said.
"Ultralife is also highly leveraged to the procurement," he said.
Shares of Force Protection rose 45 cents, or nearly 5 percent, to $9.44 in morning trading and Ultralife added 30 cents, or 4.7 percent, to $6.71.
BAE Systems Inc. is the U.S. subsidiary of London-based BAE Systems PLC.