Are the Democrats good for ASEI?
American Science and Engineering (FARO) might just get a boost from the Democrats in Congress -- specifically, from their "first 100 hours" push to implement "all" of the recommendations of the 9/11 Commission.
Why is that?
Well, one of the specific recommendations of the Commission was to plug the very serious security hole that exists for virtually all cargo entering the United States -- very little of that cargo is ever physically inspected, which opens up lots of possibilities for terrorists to smuggle weapons (or themselves) into the country. And stories have popped up everywhere today -- from the Christian Science Monitor mentioning port and container security, and the AP on expanded Homeland Security grants to high-risk areas, including ports. Ports and containers seem to be getting a fair share of attention right now, perhaps because there are some clear things that could be done successfully right away, given the money.
And ASEI is one of the significant companies providing products to help with cargo inspection for ports and personal and baggage inspection for site security.
Now, there may not be a material impact on ASEI if and when the bills in question get signed and become law (and I expect they will -- who wants to veto more security?), thanks to the several major competitors who share this space ... but the potential is there.
American Science and Engineering has had a nice six months, recovering somewhat from their difficult quarters when estimates and actual results were quite divorced from one another, and in the wrong direction. Big orders for their flagship product, the Z-Backscatter Van, and contracts for new product development in port security as well as some port orders of their massive container-scanning Omniview Gantry, and the testing of their SmartCheck by the TSA for airport security all have restored some investor confidence in the company.
But the future seems extraordinarily bright to me, much brighter than one would expect from a small company trading at only a modest premium to the overall market (trailing PE of a bit over 20 at the moment).
I've written several times about ASEI in the past, with more detail on the programs mentioned above and their potential (click on the ticker below for all my writeups), and I continue to hold shares. I may buy more if the price continues to be reasonable and Congress continues to push money for increased security.
Why is that?
Well, one of the specific recommendations of the Commission was to plug the very serious security hole that exists for virtually all cargo entering the United States -- very little of that cargo is ever physically inspected, which opens up lots of possibilities for terrorists to smuggle weapons (or themselves) into the country. And stories have popped up everywhere today -- from the Christian Science Monitor mentioning port and container security, and the AP on expanded Homeland Security grants to high-risk areas, including ports. Ports and containers seem to be getting a fair share of attention right now, perhaps because there are some clear things that could be done successfully right away, given the money.
And ASEI is one of the significant companies providing products to help with cargo inspection for ports and personal and baggage inspection for site security.
Now, there may not be a material impact on ASEI if and when the bills in question get signed and become law (and I expect they will -- who wants to veto more security?), thanks to the several major competitors who share this space ... but the potential is there.
American Science and Engineering has had a nice six months, recovering somewhat from their difficult quarters when estimates and actual results were quite divorced from one another, and in the wrong direction. Big orders for their flagship product, the Z-Backscatter Van, and contracts for new product development in port security as well as some port orders of their massive container-scanning Omniview Gantry, and the testing of their SmartCheck by the TSA for airport security all have restored some investor confidence in the company.
But the future seems extraordinarily bright to me, much brighter than one would expect from a small company trading at only a modest premium to the overall market (trailing PE of a bit over 20 at the moment).
I've written several times about ASEI in the past, with more detail on the programs mentioned above and their potential (click on the ticker below for all my writeups), and I continue to hold shares. I may buy more if the price continues to be reasonable and Congress continues to push money for increased security.
Labels: ASEI
This article posted by One Guy @ 1/09/2007 04:17:00 PM 0 comments
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