AeroVironment (NASDAQ: AVAV) is
engaged in the design, development, and production of unmanned aircraft systems (UAS) and electric energy technologies for various industries and governmental agencies. The company's small aircraft are used by U.S. Department of Defense customers to deliver real-time reconnaissance, surveillance, and target acquisition to tactical operating units. Its electrical products include recharge systems for industrial vehicle batteries and power processing test equipment. Ford Motor (NYSE: F) and Delta Air Lines (NYSE: DAL) are on the company's commercial customer list. Lockheed Martin (NYSE: LMT) is a major competitor.
The firm pleased investors last week, when it reported fiscal Q1 EPS of 22 cents and revenues of $53.6 million. Analysts had been expecting 18 cents and $49.9 million. Management also maintained its FY09 guidance for year over year revenue growth of 20%-25%, with an operating income margin of 12%-14%. The CEO noted, "Winning the All Environment Capable Variant competition with our Puma AE earned us the fourth Department of Defense program of record for small UAS."
The stock
popped on the news and then began defining a bullish "flag" consolidation pattern. Stocks often leave flags moving in the same direction they were traveling on entry. In this case, that would be to the upside.
Brokers recommend the shares with four "strong buys", one "buy" and six "holds". Analysts see a 19% growth rate, through the next year. The AVAV EPS Growth rate (22.22%), Operating Margin (14.02%) and Return on Assets (10.36%) compare favorably with industry, sector and S&P 500 averages. Institutions hold about 50% of the outstanding shares. Over the past 52 weeks, the stock has traded between $18.44 and $35.63. A stop-loss of $30.45 looks good here.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold positions in any of the stocks mentioned above.
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Reader Comments (Page 1 of 1)
9-19-2008 @ 3:12PM
Ann Schauer said...
LOCKHEED IS WINNING CONTRACTS LIKE CRAZY BUT THE SHAREHOLDER CONTINUES TO FEEL THE HURT PART. WHY??????????????????????????????