AeroVironment (NASDAQ:AVAV) has struggled along with the rest of the market, but it is well-positioned to snap back. While budget cuts are an issue for many defense-related firms, it is highly unlikely we will see cuts in spending on unmanned aircraft.
AVAV is an innovator in this field, and these types of aircraft are highly popular with the military thanks to their usefulness in combat and surveillance. Management is confident it can increase sales in divisions of the military it does not currently serve, and the company is experiencing strong growth right now from its PumaAE model, an “all environment” aircraft that can land in air and water. Domestic use of unmanned aircraft is also set to increase.
AVAV is not scheduled to report fiscal fourth-quarter results until late June, but earnings are expected to grow from $1.17 a year ago to $1.31, and then advance further to $1.46 in its 2013 fiscal year.
The stock sells at 17X April 2013 estimates – an attractive valuation made all the more appealing by the company’s $181 million of net cash on its balance sheet, which is equal to $8.30 a share.
I'm sure the CEO will help himself to the $8.30/sh in cash before he rides off into the sunset.
This company needs a shakeup. They have some old, senile guy as the Chairman and CEO collecting an outrageous salary and benefits package for substandard results. At the very least, put someone else in as Chairman. It would be better if the old fart, Conver, moved into Chairman and someone else tok over as CEO.