Federal Contract Recompete Risk
In plain terms
When a big government contract is about to end and no renewal has landed yet, the contractor stock often drifts down on recompete risk.
How it works
Federal contract within 90 days of period-of-performance end without a follow-on award (>= 25% of expiring amount) creates recompete-cliff downside risk.
Data dependencies
- Federal contracts
A data feed this strategy reads, refreshed on its normal schedule.
- Daily prices
Adjusted-close OHLCV for every US-listed ticker; primary price feed.
Expected edge
- Reported return
- None documented for this signal (original thesis). Related Belo-Gala-Li 2013 finding: firms in high government-spending-exposure industries earn ~6.9%/yr more during Democratic presidencies (cross-sectional LONG factor, no contract-level mechanism).
- Reported Sharpe
- n/a (original thesis; the previous ~0.7 was not a finding of any cited paper)
- Tested over
- n/a (original thesis; the related paper documents presidential-term regime returns, not a T+1..T+90d event window)
Original Alphactor thesis: large unrenewed contract exposure near period-of-performance end creates recompete-cliff downside. Belo-Gala-Li 2013 JFE motivates the premise that government-spending exposure prices equity returns but contains no recompete / follow-on-award mechanism.
Example tickers where this is likely to fire
Illustrative only, the signal fires based on the live data, not a fixed list.
Related families
Big federal contract wins quietly preview revenue beats 1-2 quarters out. Long the ticker the day after a top-decile award.
When government contract flow surges in a NAICS sector, we go LONG firms in that sector (excluding the direct prime contractor) as subcontractor beneficiaries.
Explore Federal Contract Recompete Risk on alphactor.ai
See which tickers this family is currently firing on, with live signals and rankings.