VSR: Homeland Defense:
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h t t p //finance.messages.yahoo.com/bbs?.mm=FN&action=m&board=22689344&tid=ipix&sid=22689344&mid=78043
###### CHECK REAL COMPANY$$$$$$$$
by: cwtd20042000
Long-Term Sentiment: Strong Buy
04/15/04 02:48 pm
Msg: 78043 of 78063
This is from vsr message boards and check it out.
While the market gloats over IPIX, VISG, MACE, MAGS, and other so called “homeland defense” plays, there is a real homeland defense company that is undiscovered at this point. This company has been in the business since 1969, providing government and the private sector with solutions in infrastructure, facilities management, environmental quality and security needs.
Ladies and Gentlemen, this company is Versar Inc.(VSR) Here are some of the reasons why investors should start paying attention to this stock:
1) Management: The chairman of Versar(VSR) (Mr. Paul Hoeper) was formerly a senior official in the US Department of Defense. Dr. Ted Prociv, President and CEO of VERSAR was the former head of the US Department of Defense chemical and biological program. Versar employs approximately 495 professional and support personnel in 14 locations nationwide. About 65 percent of the staff has degrees in science, engineering, or other technical fields.
2) Contracts & Financials: Verar has $44 Million in funded backlog and the equally impressive $312 Million in unfunded backlog. Versar was recently selected to participate in a 15-Year US Army Dugway Proving Ground contract ($30 million dollars). $38 billion dollar Homeland Security Bill was passed, paving the way for VSR to potentially generate more homeland defense deals. They have been recently transitioning all businesses to vie for federal contracts. Versar has a contract capacity of over $1 billion. Their largest customer is the United States Air Force and the second largest customer is the United States Army to include substantial work with the Corps of Engineers. They also do a considerable business with the Environmental Protection Agency (EPA) and the State Department (SD). 2004 revenue will be around $50 million dollars, and the company is planning to grow revenue to $80 million by FY 2005. At $28 million dollars market capitalization, this company has a price-to-sales ratio of 0.5. VSR’s PS ratio compares very favorably with other homeland defense stocks. The company is profitable (recently announced 3rd consecutive profitable quarter), with a trailing PE of 39. Since the cost associated with this business is mostly human resources (which is fixed up to the $1 billion contract capacity), VSR’s earnings could grow substantially in the coming quarters as DOD increase spending on counterterrorism initiatives.
3) Insider Buying: Insiders have recognized the unique opportunity in this company and has been aggressively purchasing shares of this company, as evident in the recent insider transactions: Low Float: At $3.90 PPS ($29 million dollars market capitalization) with 7.29 million shares outstanding, this is, by far, the cheapest pure-play homeland defense company. The stock will skyrocket once investors recognized this unique opportunity. It is still not too late to buy as the stock has not far from 52 weeks low.
My recommendation for this stock is a "strong buy" with a 3 months target price of $15 share. It could go significantly higher due to short covering (see TASR).
Good Luck,
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