Government Spending Cuts Will Hurt These 11 Stocks

Joint Select Committee on Deficit Debt Reduction John Kerry

Cutting $1.5 trillion from the nation’s budget over 10 years is proving no easy feat. In private, the Joint Select Committee on Deficit Reduction has been hammering out details of its coming bipartisan recommendations to little avail.

J.P. Morgan (NYSE:JPM) sees education, electronic equipment and aerospace and defense firms taking the brunt of the spending hit. According to their research, $280 billion in annual sales are at risk at publicly traded companies on the S&P 500 (NYSE:SPY).

If the Supercommittee is unable to come to a consensus before its November deadline, automatic cuts of $1.2 trillion will take effect. This trigger is acting as an impetus for the 12 leaders to come to some agreement.

#11: Coventry Health Care Inc. (NYSE: CVH)

#11: Coventry Health Care Inc. (<a target=

 

Percent of Sales to Gov’t: 57% Market Cap: $4.3 billion

Sub-Industry: Managed Health Care

Source: J.P. Morgan Chase & Co.

#10: DaVita Inc. (NYSE: DVA)

#10: DaVita Inc. (<a target=

 

Percent of Sales to Gov’t: 66% Market Cap: $4.3 billion

Sub-Industry: Health Care Services

Source: J.P. Morgan Chase & Co.

#9: Harris Corp. (NYSE: HRS)

#9: Harris Corp. (<a target=

Percent of Sales to Gov’t: 72% Market Cap: $4.2 billion

Sub-Industry: Communications Equipment

Source: J.P. Morgan Chase & Co.

#8: General Dynamics Corp. (NYSE: GD)

#8: General Dynamics Corp. (<a target=

General Dynamics Abrams M1A1 Main Battle Tank

Percent of Sales to Gov’t: 72% Market Cap: $20.1 billion

Sub-Industry: Aerospace & Defense

Source: J.P. Morgan Chase & Co.

#7: Humana Inc. (NYSE: HUM)

Percent of Sales to Gov’t: 76% Market Cap: $12.7 billion

Sub-Industry: Managed Health Care

Source: J.P. Morgan Chase & Co.

#6: Apollo Group Inc. (NASDAQ: APOL)

Percent of Sales to Gov’t: 80% Market Cap: $5.8 billion

Sub-Industry: Education Services

Source: J.P. Morgan Chase & Co.

#5: L-3 Communications Holdings Inc. (NYSE: LLL)

#5: L-3 Communications Holdings Inc. (<a target=

 

Percent of Sales to Gov’t: 83% Market Cap: $6.5 billion

Sub-Industry: Aerospace & Defense

Source: J.P. Morgan Chase & Co.

#4: Lockheed Martin Corp.

#4: Lockheed Martin Corp.

 

Percent of Sales to Gov’t: 84% Market Cap: $24.6 billion

Sub-Industry: Aerospace & Defense

Source: J.P. Morgan Chase & Co.

#3: Raytheon Co. (NYSE: RTN)

#3: Raytheon Co. (<a target=

 

Percent of Sales to Gov’t: 88% Market Cap: $14.2 billion

Sub-Industry: Aerospace & Defense

Source: J.P. Morgan Chase & Co.

#2: SAIC Inc. (NYSE: SAI)

#2: SAIC Inc. (<a target=

 

Percent of Sales to Gov’t: 89% Market Cap: $4.1 billion

Sub-Industry: IT Consulting & Other Services

Source: J.P. Morgan Chase & Co.

#1: Northrop Grumman Corp. (NYSE: NOC)

#1: Northrop Grumman Corp. (<a target=

Northrop Grumman’s B2-Spirit stealth bomber

Percent of Sales to Gov’t: 92% Market Cap: $14.4 billion

Sub-Industry: Aerospace & Defense

Source: J.P. Morgan Chase & Co.

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