Yes, the bump will last for the following reasons:
1. They have beaten estimates by $.02 each quarter this year. Eventually they will beat for the year, probably coming in within the range $.22-.24.
2. Not only did they beat, they announced the second new contract in a week. They have some real momentum going.
3. With the contracts they have in hand already they will double over the next two years, unless, of course, some don't get funded. One contract alone, FBCB2, will account for over $50 million in sales in FY04, nearly their entire sales for FY02.
4. The only negative is their highly leveraged balance sheet which was nearly devoid of tangible book value just 6 quarters ago, thanks to doing several acquisitions for cash, and borrowing money to do it, plus a stock buyback program. They just put a huge dent in the debt, paying off over 1/4 of it. They will be completely out of debt within two years unless they do more acquisitions.
What's not to like about this company? I should add that management believes in the company, too. They have been buying shares for years, and never selling any.
Carl |
