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AeroVironment, Inc. (AVAV) Message Board

  • charleslusten charleslusten Feb 11, 2013 10:23 AM Flag

    Thoughts on a takeover

    This equity is trading toward the low end of it's range...no debt...progressive technology...small takeover size...any thoughts?

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    • AVAV only has 817 employees. Why buy the whole company when you can hire away their key R&D/engineering employees for a fraction of what it would cost to buy the whole company? Out of 817 employees, AVAV can't have more than 100 key R&D/engineering employees.

    • I've been investing in small cap stocks about 25 years and I'd just about guarentee it. I'd guess it happens within 1-2 years and at a price of around $23-25. One of the big defense guys will buy them and shut down those money losing charging subsidiaries. This is a really cheap way for one of the big guys to add growth AND immediate profitability. Profitable, $7 /share cash and no debt. No Brainer!

      I just took my first small position in the afterhours market a little above $16.

    • AVAV has all most all of the military business of small drones. Defense cuts to the large companies, like BA, RTN, LMT, and TXT (to name a few) will mean they will be looking for other ways to increase their business. One way is through M&A. I agree with GS saying that AVAV is an M&A candidate, with price target or take out price of $36. I think either BA or TXT will buy AVAV, somewhere in the $35 to $40 price. Bothe BA and TXT stock prices are near their 12 month highs. TXT is at 12 month high and BA, even with Dreamliner problems, is still near its 12 month high. A purchase by any large defense company would have no negative impact to their bottomlines, PLUS, don't forget...that AVAV has over $6 a share in cash (over $135 Million) and no debt. I have no doubt that its not a matter of if AVAV is going to be bought, but, when and by whom. I think whoever buys AVAV will pay in the area of $1 Billion. This is a rounding error for most large defense players. AVAV is inexpensive.

      Sentiment: Strong Buy

    • Back in February 2012, Goldman cited AVAV as an M&A candidate with a price target of $36. If I remember correctly, that announcement pumped the stock price from $28 to $31. Where are we now?

      Any small company can be a subject of takeover speculations (check other small cap stocks on Y-boards). Relying on takeover assumptions to own a stock is risky. Just consider a possible takeover as a nice unexpected bonus added to your stock pick based on fundamentals.

      As far as AVAV goes, a takeover will be much more probable after Congress approves use of commercial drones.

      Sentiment: Hold

 
AVAV
30.02-0.42(-1.38%)Sep 22 4:00 PMEDT

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