ASEI Earnings Opportunity
It's just as well that I chose to split my buying of ASEI into a few parcels, since I clearly have no talent for making short term predictions.
American Science and Engineering released earnings this morning, and the market again was wildly disappointed -- a little deja vu from last quarter. The earnings per share number of .41 was a bit depressed by a very high tax bill and the options expensing, but sales were down by something on the order of 20% from the year-ago quarter.
I may be coating this with too much optimism, but I'm not terribly worried. I took advantage of a too mercurial market to fill out my position a little bit more this morning at $37.45, so my cost basis has now been lowered to about $44. That doesn't look so good today, but I think it will in the years to come.
The good news from ASEI is that the orders keep piling in -- lots more international orders for the vans, some indications that the orders for the bigger gantry scanning machines are starting to come in, and new products for package and personal scanning that have large markets to address ... all of which should help lessen their dependence on the US government. The upshot of that is that they reported a big increase to the backlog, which now stands at $63 million.
ASEI may keep going down, but I think the fundamentals of the business and the industry point to a much rosier future in the long run, even if the nature of big ticket government purchasing means that progress from quarter to quarter will be very lumpy, indeed.
More detail on my past analysis of ASEI here, here and here.
American Science and Engineering released earnings this morning, and the market again was wildly disappointed -- a little deja vu from last quarter. The earnings per share number of .41 was a bit depressed by a very high tax bill and the options expensing, but sales were down by something on the order of 20% from the year-ago quarter.
I may be coating this with too much optimism, but I'm not terribly worried. I took advantage of a too mercurial market to fill out my position a little bit more this morning at $37.45, so my cost basis has now been lowered to about $44. That doesn't look so good today, but I think it will in the years to come.
The good news from ASEI is that the orders keep piling in -- lots more international orders for the vans, some indications that the orders for the bigger gantry scanning machines are starting to come in, and new products for package and personal scanning that have large markets to address ... all of which should help lessen their dependence on the US government. The upshot of that is that they reported a big increase to the backlog, which now stands at $63 million.
ASEI may keep going down, but I think the fundamentals of the business and the industry point to a much rosier future in the long run, even if the nature of big ticket government purchasing means that progress from quarter to quarter will be very lumpy, indeed.
More detail on my past analysis of ASEI here, here and here.
This article posted by One Guy @ 8/09/2006 10:14:00 AM 0 comments
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