With Washington moving toward a stopgap funding bill that keeps federal money flowing to December, investors are watching how this short extension of the status quo could affect companies tied to government work. A temporary funding runway can keep certain revenue streams steadier than headlines suggest, which creates both comfort and urgency. This article walks through three stocks exposed to this news and explains why their stories deserve a closer look at this point.
The three stocks below are just a small sample of the idea, and the full screen surfaced 60 more U.S. federal government exposed companies with equally interesting stories that are not covered here. If you want to identify and analyze the highest conviction plays tied to federal work, head straight to the U.S. Federal Government-Exposed Stocks screener.
Liquidity Services (LQDT)
Overview: Liquidity Services runs online auction marketplaces that help U.S. federal agencies and other government bodies sell surplus assets, alongside platforms that liquidate excess goods for retailers and list used industrial equipment globally. The company earns fees and service revenue from managing these sales, from surplus management and asset valuation through to online marketing and transaction processing.
Operations: Liquidity Services generates most of its roughly US$489 million in revenue from the Retail Supply Chain Group at about US$331 million, with additional contributions from GovDeals at about US$93 million, the Capital Assets Group at about US$44 million, Machinio and software solutions at about US$22 million, and the majority of revenue coming from the United States at about US$441 million.
Market Cap: US$1.3b
Investors looking at federal government exposure can pay attention to Liquidity Services because its GovDeals marketplace is tightly linked to U.S. federal and public sector surplus sales, which depend on day to day government operations rather than new spending programs. The likely extension of current funding levels supports continuity in those asset flows, while recent records in gross merchandise volume and EBITDA indicate the model can scale across both government and retail channels. At the same time, a relatively high P/E multiple and recent insider selling mean expectations are not low and sentiment can turn if surplus volumes soften. For investors who want federal exposure through a digital, asset light platform instead of a traditional contractor, the full story on Liquidity Services may warrant closer inspection.
Liquidity Services is scaling government and retail surplus flows through the same asset light engine, yet the real story sits in how growth expectations stack up against that premium P/E. Get the analyst forecasts for Liquidity Services
Graham (GHM)
Overview: Graham Corporation designs and manufactures critical fluid, power, heat transfer, and vacuum systems that sit inside U.S. defense and space programs, including submarine propulsion equipment, torpedo ejection systems, rocket propulsion components, and life support hardware, while also serving energy, chemical, and industrial customers globally. That direct link to federally funded defense and space projects is why Graham appears in a U.S. Federal Government Exposed Stocks screen rather than as just another industrial supplier.
Operations: Graham generates about US$261 million in revenue from designing and manufacturing heat transfer and vacuum equipment, with most sales in the United States at about US$228 million and smaller contributions across Asia, Canada, the Middle East, South America, and other regions.
Market Cap: US$1.0b
Graham provides targeted exposure to long running U.S. defense and space programs at the equipment level, supported by a record backlog of federally tied orders and exposure to niches such as submarines and rocket propulsion that often extend over multiple years. The company has been investing in automation, new facilities, and ERP systems to improve margins and support that backlog, while also expanding into areas such as small modular nuclear reactors and cryogenics. However, a rich valuation and reliance on external borrowing mean there may be limited flexibility if contracts are delayed or budgets change. For investors tracking federal spending as a theme, Graham is a stock where both the potential associated with its positioning and the risk associated with high expectations are important considerations.
Graham’s backlog tied to defense and space programs suggests a story that could be stronger than many investors assume. Get the full context on margins, contracts, and valuation in the analysis report for Graham.
Globalstar (GSAT)
Overview: Globalstar provides mobile satellite services that keep phones, sensors, and emergency devices connected when regular networks are unavailable, which is especially relevant for government, defense, and public safety users that need reliable communications in remote or crisis situations. Its network and devices support everything from emergency alerts and field communications to tracking critical assets for sectors such as energy, transportation, and forestry.
Operations: Globalstar generates essentially all of its about US$281 million in revenue from its Mobile Satellite Services business, covering voice, data, IoT connectivity, and related equipment.
Market Cap: US$10.6b
Globalstar gives you a pure play on satellite connectivity that directly links into government, defense, and emergency communications, at a time when a stopgap U.S. funding deal points to near term budget stability for those customers. The company is leaning into higher margin opportunities such as spectrum licensing and private 5G networks such as XCOM RAN, while rolling out new IoT modules and expanding its satellite constellation. At the same time, the stock carries a rich valuation relative to current sales, relies heavily on external borrowing, and remains exposed to long sales cycles and powerful rivals in both satellite and terrestrial wireless. If you are comfortable weighing those risks against the potential of a growing federal and enterprise customer base, Globalstar is a story worth tracking more closely.
Globalstar’s push into spectrum licensing and private 5G makes the growth story feel only half written. Get the analyst forecasts for Globalstar while a key gap between expectations and balance sheet risk still looks underappreciated
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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