Stanley Inc. (NYSE: SXE) provides information technology services and solutions to U.S. defense and federal civilian government agencies. The firm offers its customers systems integration solutions and expertise to support their mission-essential needs at any stage of program, product development or business life cycle. Services involve systems engineering, enterprise integration, operational logistics, business process outsourcing, and advanced engineering and technology. The company employs more than 2,800 and operates at over 100 locations worldwide.

Stanley pleased investors last week when it announced fiscal Q2 EPS of 27 cents and revenues of $150.2 million. Analysts had been expecting 24 cents and $135.8 million. Management also guided Q3 EPS to 27-29 cents (24-cent consensus), Q3 revenues to $152-$162 million ($134.75M consensus), FY08 EPS to $1.05-$1.10 (96-cent consensus) and FY08 revenues to $590-$610 million ($541.75M consensus). Stifel Nicolaus subsequently reiterated its "buy" recommendation. SXE shares popped on the news and then moved into a bullish "pennant" consolidation pattern. Prices frequently exit pennants moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.

Altogether, brokers now recommend the issue with seven "strong buys" and one "buy." Analysts see a 22% average annual growth rate through the next five years. The SXE Price to Sales ratio (1.43), Sales Growth rate (53.01%) and EPS Growth rate (80.00%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 65% of the outstanding shares. Over the past 52 weeks, the stock has traded between $13.41 and $33.69. A stop-loss of $27.75 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.