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I've been wanting to add to my new position in American Science and Engineering (NASDAQ:ASEI), and I decided to hedge my bets a little bit by picking up a few shares today before the earnings call this morning -- that way, if the earnings disappoint I'll still have something to look forward to in filling in my position further at a lower price.

ASEI took a tumble last time it released earnings, and I think this earnings announcement is a pretty good candidate to help them make up some of that fall. Opinions differ on why they fell short of estimates last time around, but management contends that if you consider their performance ex-items they would have actually beat the analyst estimates handily.

I'm no accountant, so I can't tell you whether or not I thought their GAAP or non-GAAP numbers more accurately reflected their performance last quarter. However, I still have a lot of optimism about the company going forward.

It's not just new orders -- though they have those, totalling about 10 million in new contracts for their ZBV vans and cargo security scanners in just the past couple weeks.

It's the environment, and the leading edge technology, and the wholesale pessimism baked into the stock.

I've written about what the company does in some detail, both before I bought shares and after. I think the new order from the US government for 8 more Z-Backscatter Vans that are enabled for tough operating environments and enhanced with radiation scanning ability (that sounds like Iraq to me), should reassure investors that ASEI's biggest customer still has plenty of need for their products. And that's just the vans, that doesn't account for the huge demand for their port, cargo, facility and airport security solutions that offer leading edge technology that no one else can provide.

But more than anything else, I can't believe the pricing on these shares. The company has had a long history of poor performance before current management came on board, but Wall Street seems to be looking at that ancient history instead of at their renewed focus on profitability in the past few years, and on their recent performance.

I'm surprised that I was able to buy the most innovative security screening company in the world at a discount to the overall market, but I'll take it. I picked up my additional shares earlier today at $46.25, and if accounting confusion and non-recurring items cause some more angst after the earnings call tomorrow I'll strongly consider buying some more.

ASEI 1-yr chart:

Source: American Science and Engineering: Global Security Needs Should Drive Growth