I've recently taken a good long look at this company and have taken a significant position in this company. They principally design systems for pointing mobile satellite dishes at satellites while a vehicle is in motion.These are used on ships, tanks, airplanes etc. Over the last year, they have received a number of military contracts (Swedish Navy - U.S. Army) and last week announced a collaboration with NASA to develop the ACTS satellite into a high bandwidth comunication system that will allow 400,000 users at speeds of 400 kb/sec and up. KVHI will be developing tracking dishes designed for the police, ambulance, aircraft etc to maintain the high bandwidth communication while on the move.|
As an investment
1) Current P/E is 25 although recently announced earnings grew at 300% earnings 12 cents for the quarter as opposed the 3 cents despite a higher tax base and a larger number of shares due to the IPO
2) Two analysts covering in First Call rate them a 1.0 (highest rating).
3) Growth of 96 over 95 should be 57% despite increase in taxes and number of shares
4) First Call estimates 45% growth of 97 over 96, but this will be higher if the ACTS satellite system is completed this year.
Even at this conservative estimate, this would give KVHI a fair value in the low 20s by end of 97 (current price is 7.25 which is just above the IPO price despite meeting or beating all earnings estimates)
5) Stock recently fell from 11 to current price of 7.25 when KVHI announced that a continuation of the orders for the Tracphones was not guarenteed through the end of 97. Analysts estimated that this COULD result in a 8% loss in earnings in 97 if order by American Mobile Satellite is not continued (but stock fell 40% on this news). I talked to CFO (Dick Forsythe) and he is still hoping to see the order continued once the Tracphone becomes better known.
6) KVHI recently hired NASAs engineer principally involved with the ACTS satellite system. The have an exclusive licensing agreement with NASA.
7) According to www.stocksmart.com, there are a number of institutional investors. T. Rowe Price New Horizons is registered as owning 14% of the outstanding shares (300,000 shares).