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The Misfits: Maximus, Inc. (MMS)
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The Misfits: Maximus, Inc. (MMS)

Yet another government contractor producing market smashing returns, but in some of the most unconventional government contracts.

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Misfit Alpha
Feb 10, 2024
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The Misfits: Maximus, Inc. (MMS)
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Saint Roch (patron saint of the sick and invalids), Francesc Ribalta, between 1600 and 1610, oil on canvas (Museu de Belles Arts de Valencia)

Whenever you hear the term “government contractor”, the first thing that comes to your mind is probably defense-related. Whether it be the behemoth suppliers to the Pentagon, the National Security Agency’s “Information Technology consultants” (typically a euphemism for online tracking and cybersecurity), or amorphously named security specialists who are often portrayed as the bad guys in movies.

Another reason defense companies are on the front of mind for so many people is because defense has been a spectacular industry for long-term returns. All but one (Leidos) of the companies listed on the chart below have outperformed the S&P 500 over the past 30 years (or since going public if they IPO’d more recently).

Government contracting goes way beyond just the defense industry, though. Every agency or department has a group of contractors it frequently relies on to perform many basic government functions and services. Identifying these companies is a little harder, though. Most are either private or are part of a much larger company where their government contract work isn’t a significant part of the business. 

There are a couple of publicly traded government service providers, though, and a few of them have been good investments in their own right. Maximus, Inc. (NYSE: MMS) is an example of such a company. Since going public in 1997, it has more than doubled the return of the S&P 500.

And yet, I’m incredibly torn about this company because of some unique challenges it has faced in the past several years and what (or who) is to blame for a few years of mediocre performance. 

Let’s dig in…


Shoutout to Koyfin for their data and charts. Koyfin has become an integral part of how I screen for, track, and analyze companies. It has made the analysis process much faster thanks to having a decade of data at my fingertips instead of manually going through stacks of quarterly and annual filings.

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