Republican Scott Franklin's investment in General Dynamics follows major $1.3 billion navy deal

Scott Franklin, the Republican Representative who represents the 15th congressional district of Florida, is making headlines after disclosing a buy transaction in the stock of General Dynamics (NYSE: GD).

General Dynamics is a major defense contractor and Scott Franklin sits on the Appropriations Subcommittee on Military Construction.

His role on the committee has prompted many to ask if it is ethical for him to be buying this stock.

How much did Scott Franklin invest in General Dynamics?

Scott Franklin bought $1,000 to $5,000 worth of GD stock on the 2nd of August.

This transaction came just a day after the company secured a $174 million contract from the US Army.

The deal involved work related to the retrofit and repair of Stryker vehicles.

It was part of the Army's ongoing efforts to maintain and upgrade its fleet and the work is expected to continue till 2029, giving the company a steady stream of revenue.

This particular purchase was also interesting because just a few days later, the company scored a massive $1.32 billion deal with the Navy.

The deal was signed by General Dynamics Electric Boat, a business unit of the company.

It involved the procurement of materials for the Virginia Class Block VI submarines.

The work on this contract is expected to be completed by September 2025.

A day after this deal, Scott Franklin sprung into action and bought a bigger chunk of the stock, this time totaling between $50,000 to $100,000.

Scott Franklin wants a piece of the success and thanks to his background and political involvement in military matters, he probably knows the stock is a good buy now.

Another week later, the company announced a partnership with Lockheed Martin to produce solid rocket motors.

There is currently a supply chain issue plaguing the industry, causing hindrances in missile production capability. It is quite likely Scott Franklin not only knew of this issue but also knew who was involved in finding a solution for it.

As a result of the above partnership, GD will start producing thousands of solid rocket motors in its Arkansas manufacturing facility, exclusively for Lockheed Martin.

Tim Cahill, an executive at Lockheed Martin, emphasized the importance of a new partner to solve the supply chain issues. He said the company had looked both at home and abroad to find a suitable partner and in the end settled for General Dynamics.

Rating upgrade for General Dynamics

Amid all these developments, the stock also received a boost through a rating upgrade.

Morgan Stanley upgraded the stock to Overweight from Equal Weight and increased its price target to $345.

The bank said that a strong quarterly report and general improvements in the supply chain meant the stock was more attractive now than before.

Boosting a strong balance sheet and becoming an even bigger player in the defense industry after the Lockheed Martin deal, GD stock is now prime for upside.

Judging by how Scott Franklin is trading the stock, it won't be a bad idea to just follow his lead and add this stock to your portfolio.

The stock has underperformed the S&P 500 this year so far but could easily catch up in the second half of the year.