I see two weaknesses in some of the recent posts. The most obvious is the common assumption that the market is efficient, i.e. the stock price reflects the fair value of a company. If the market always reflected the fair value, there would be no chance to beat the market. The market for IBM is not efficient. Why do you expect the market for LMIA to be efficient?
The second is a little more speculative on my part. Many have complained that there are few announcements about new contracts. Since LMIA signs 10 year sole supplier contracts with its customers, could it be because they don't announce new work on those current contracts? I suggest you take a look here for a list of recent new business requiring support from LMIA. http://biz.yahoo.com/n/b/ba.html
If 1998 gives a valid indication of the relationship between Boeing and LMIA, (Revenue comparisons of $56.2B vs $59.2M), we can estimate that over the next 20 years LMI will get about $883M worth of business, just from Boeing.
The $883M is $1.38 Trillion * 50% * 59.2/56200 (ratio of LMIA/BA sales) * 85/70. This crude estimate assumes that LMIA is able to maintain the long term sole source contracts it already has with Boeing and that Boeing continues to increase outsourcing from approximately 70% to 85% per plane.
That translates to an average of only $44M per year, not so great. But the estimate ignores a significant fraction of the current business from Lockheed-Martin, Gulfstream (which actually is LM now), Northrop or any of the other airframers it already works with. It ignores that current potential for future work with Airbus, the JSF, and Bell Helicopter. It may ignore aftermarket opportunities, though the LMIA/BA ratio may account for that indirectly.
For those of you who disagree, please point out errors in my facts and in my logic. It doesn't take a rocket scientist to foam at the mouth and call me stupid.
Jagad, Been waiting to buy into LMIA for several weeks,finally we entered!Volume of trading is very thin on this little gem.I agree with your in depth analysis of LMIA.I think in time we will see more analyst covering this stock as the smallcaps revive into y2k.Lots of positive news in aero industry BA,LMT,NOC all receiving orders for planes.When LMIA went public the aero industry was in a slump but now its in 1stages of recovery.I wouldn't be surprised to have a homerun by 4th qt on LMIA.I like co news too but if management is busy bidding new contracts to build revenues,thats fine with me!
I would strongly suggest that you impress upon LMIA Management to issue soem sort of news release on getting some orders. They must be getting these orders on a regular basis. Their backlog must be increasing. I do no want the shareholders of this little gem (like me) to suffer monetarily due to management inaction. Management must be more responsive to these shareholders. asa