RE: still need new contractsI agree with you tennessee-jed, FIRM orders (not intentions to place orders) are required to truly get this stock above the $4.xx to $5xx price range. Personally, I would prefer solid order numbers rather than IDIQ. I work in the defence industry and can tell you from personal experience that IDIQ's can be a blessing or a curse. The problem is that you never know at the time that you accept the contract if you are dealing with a blessing or a curse! Let's hope that some solid orders come in soon.
In the meantime, I like what I see in terms of the operational results and debt reduction... not bad for a company that just made a large acquisition. Gross margins appear to be in the 43% range across business units. If it wasn't for the acquisition and financing-related charges, we would be looking at earnings of around $44M rather than $7M. I like their aggressive targets for retiring the long term debt (see note 6 on financial statement). As I have said before, however, the payback will not come overnight for investors.
In case anyone is interested, our old buddy Neil Linsdell from Versant has been quoted in the Ottawa Business Journal today. Here are his comments along with a link to the full article:
"Versant Partners analyst Neil Linsdell wrote in an e-mail that the company's results were better than expected, beating his expectations of two cents in per-share earnings on revenues of $126.2 million.
Mr. Linsdell, who expects the company's stock to reach $10.50 this year, wrote, "Investors should be more comfortable that financial targets are achievable... Still need new orders to help lift the stock solidly into the $6 to $8 range though - expect contract announcements online in March/April."
https://www.ottawabusinessjournal.com/291003352410210.php
As always, I am interested in everyone's comments and analysis.
-K