Applied Signal Technology is ignoring the recession

Posted Jun 22nd 2009 5:40PM by Joseph Lazzaro

It goes without saying that the tech-based intelligence, surveillance, and security systems sector is favored here, and with the aforementioned in mind Applied Signal Technology (NASDAQ: APSG) is worth a review.

In general, analysts expect strong demand for Applied's broadband communications equipment and its new Model 680 Raider product to continue.

Meanwhile, new orders remain impressive, up 19% in the first half, and up 17% in Q2, compared to the same periods a year ago. In addition, royalty revenue from licensing intellectual property in commercial satellite communications markets also aided the top line in Q2. The First Call FY2009/FY2010 EPS estimates for APSG are $1.09 to $1.16.

Technically, the stock gapped-up from $21 to about $27 after reporting Q2 earnings results that beat analysts' consensus estimates. The pull-back has since provided a nice entry point: $22-24.

Stock Analysis: Applied Signal Technology is a moderate-risk stock. Consider buying a 25% position in APSG now; then buy another 25% in four months. Under any circumstance, don't buy more than 50% of your APSG position before October 2009. Sell/Stop Loss if you were to buy shares in this company: $11.

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Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.

Tags: Applied Signal Technology, APSG, commercial satellite, CommercialSatellite, security, security software, SecuritySoftware

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Reader Comments (Page 1 of 1)

7-15-2009 @ 9:29AM

Johnny said...

Its great that intelligence, surveillance, and security systems sector is favored here,n general, analysts expect strong demand for Applied's broadband communications equipment and its new Model 680 Raider product to continue..........
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