CVU
Brought some CVU this week, in the mid to upper 6's here is what I like.
1) Turnaround candidate- Some may think I don't like turnaround candidates, that is far from the truth, but I do like to see light at the end of tunnel. This situation reminds me a lot of GV. Now your gonna say why GV? GV had problems with a specific issue the Texas stuff, quarter after quarter hurting results, once it went away the story and stock price improved. CVU has the A-10 issue which has been ongoing, it has been and unmitigated disaster, q2 is the first signs of how the numbers look when you take that situation away. I personally like how they broke down the numbers, one of the smartest breakdowns by management I have seen in some time.
2) So what are we left with? A backlog up since the beginning of the year. A company that earned a whopping .21 fully taxed, and is guiding for lower SGA, higher GM, and higher sales, what a wonderful combo. I think CVU disaster is now behind them. Based on Guidence we are looking at two back to back .25 quarters average, with further growth to come in 2017. Notice exing the A10 stuff, revs were up 22% y/y on and adjusted basis. A good underlying growth story is being hidden.
Conclusion: CVU is one of my favorite new stocks and have been aggressively buying all week. I thought this was one of the best quarters we seen, and the breakdown was incredibly bright by management to do. I also feel earnings will be about a $1.10 next year, pop a 12 pe on that thing, and the stock could easily double from current prices in my opinion. All is just my opinion, and I could always be wrong though.
