Some key points:
I, Robert Goldman, hereby certify that the view expressed in this research report accurately reflect my personal views
about the subject securities and issuers. I also certify that no part of my compensation was, is, or will be, directly or
indirectly, related to the recommendations or views expressed in this research report.
We expect that the Company will begin to penetrate
the multi-billion dollar U.S. market and receive TSA
air cargo and passenger screening approvals over
the next 6-12 months.. The U.S. government has
already allocated $374M for new explosive detection
systems and $40M for handheld explosive trace
detection systems.
In the past few weeks, IMSC has announced orders
in excess of $6M for this fiscal year, with the
potential of another $3M, and a pipeline of $80M,
excluding any potential TSA-related business.
Management has also affirmed its June FY10 revenue
forecast of $19M.
At current prices, IMSC seems like a no-brainer.
Unlike its peer group, which is trading near 52-week
highs, IMSC has pulled back and settled into a narrow
range, despite the rash of good news. Our conservative
6-month target price of $1.50 is based on 27x our FYE
EBITDA forecast and we believe that an August TSA
approval will serve as a catalyst propelling the stock
beyond $3.00. We plan to adjust our target and valuation
methodology as we gain clarity over the coming months.
We rate these shares Speculative Buy.
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