Defense Deals Are Far From Over

Smaller contractors are linking up like crazy--and many are undervalued

The big defense contractors may all have paired off, but defense linkups continue apace. Instead of the melding of behemoths such as Lockheed and Martin Marietta, the action is now in smaller, high-technology concerns catering to the federal government. These information-technology services companies provide the Pentagon and other federal agencies with everything from knitting together old and new computers and software to averting year-2000 computer snafus. But unlike their high-technology brethren that cater to the broad business market, these firms are often overlooked and undervalued in the stock market.

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