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Buy Allied Motion Technologies as Defense Spending Soars

Louis Navellier

Allied Motion Technologies (NASDAQ:AMOT) is a very interesting company that doesn’t get a lot of coverage.

Part of the reason it stays below the radar is it has an interesting niche across a number of industries and the bigger players in the various sectors get more press. That’s partly thanks to its market cap of around $450 million — it’s not a huge company.

But AMOT has been around for 56 years at this point and continues to find opportunities in its established markets as well as developing ones.

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What’s more, as a small stock, it is in the sweet spot right now for growth. Smaller companies perform better when the economy is expanding simply because they can grow faster than larger companies in these market conditions.

For example, if you’re a steering wheel maker for SUVs, you’re going to post much stronger numbers than a car company if SUVs start selling really well because the car company has other models that aren’t selling well and that balances their bottom line.

Granted, when there’s a downturn, smaller companies get hit first. But this is how portfolio managers rotate in and out of sectors as the economy shifts.

AMOT Stock’s Business

So, AMOT makes motors. Small brush and brushless DC motors, motor drives, motion controllers and a number of similar types of equipment.

Its key customers are in the aerospace and defense sectors. AMOT’s motors do things like an aircraft emergency fuel boost pump. Propeller-driven airplanes need a pump that can deliver consistent fuel when cruising, but surges in fuel for landing and taking off. AMOT has them covered.

The one thing about AMOT that should be noted here is that it has become a go-to supplier of motors in some of the most rigorously tested and zero-tolerance industries on the planet. This is a very big deal.

Contractors want to make sure they’re delivering quality components to their customers. If a plane falls out of the sky because the fuel pump malfunctioned, that is bad news for everyone. The same goes for the defense industry. AMOT equipment are part of mid-range missile guidance systems, robots that dispose of IEDs, remotely operated weapons systems and many more.

The fact is, AMOT is going to be a big winner as the military becomes more automated and reduces personnel in dangerous roles and replaces them with hardware.

And there’s another big growth opportunity for AMOT: robots. Whether it’s driverless cars, or bionic arms or legs, or robotic surgical equipment, AMOT has already established itself as a major player.

Again, with its long reputation of quality and reliability, it has a head start on other firms looking to get into the game.

AMOT stock is up 93% in the past 12 months, but it’s still trading at a price-to-earnings ratio of 39. With all the potential growth laid out ahead of it, AMOT is still a decent value with a lot of potential across a number of growing industries.

Louis Navellier is a renowned growth investor. He is the editor of four investing newsletters: Growth Investor, Breakthrough StocksAccelerated Profits and Platinum Growth. His most popular service, Growth Investor, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.

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