DynCorp Could Gain on Blackwater's Loss

Last week, Blackwater Worldwide received the bad news that the U.S. Government could not renew its contract after the Iraqi government refused to renew its license to operate in their country. The decision stems from the 2007 incident where Blackwater security guards fired on and killed 17 Iraqis in a disputed who-shot-first incident.

But their bad news could be investors' gain.

Including Blackwater, the State Department uses three separate security contractors in Iraq. The only competition for the coveted security contracts now rests with Triple Canopy and DynCorp International (NYSE: DCP). For investors, DynCorp is the only publicly listed company of the three.

Before you think a few extra security guards in Iraq can’t be that expensive, consider that there are thousands of private security contractors in Iraq. They protect everything from government personnel to corporate executives and buildings, earning thousands a day. Blackwater’s contract in Iraq was worth nearly $2 billion – despite its poor performance reviews.

And Iraq isn’t the only hotspot these companies operate in. There are dozens of other hotspots around the world for private security contractors to “clean up” in – like Afghanistan’s reconstruction.

Comments

[DaveBrit:]

The US will be gone from Iraq soon anyway. There will be little to protect except the Embassy people. This is a non issue, hardly worth investment advice in an article like this. Glad Blackwater is getting its comeuppance though....

Feb 03 07:44 PM

[zeronimo:]

blackwater today, DCP tomorrow. in the new administration, there will be a substantial decrease in spending in Iraq. i agree with the previous comment by DaveBrit. this should be a non-issue.

Feb 03 11:46 PM

[maelstrom:]

The Dem's are not a pro merc bunch.

Feb 04 04:04 AM

[delta21:]

I think that with a demorcratic president the need for private security guards should go up. Demorcrats dont like to spend on the military, but the need for security is still there. So it just makes good sense to have a private security company doing the bad stuff.

Feb 04 04:23 AM