John Leonard, CFA
Special situations, micro-cap, contrarian, CFA

Bullish Outlook For VSE Corp Still Intact Despite Recent Challenges

Key takeaways

    VSE Corp. (NASDAQ:VSEC) trades at a mid single-digit multiple as the recent expiration of a key government contract and general decline in revenue over the past several years due to the winding down of military involvement in Iraq and Afghanistan caused investors to question the long term growth outlook. However, work quickly resumed on this key contract after the award of three new task orders. Moreover, operating income is higher despite significantly less revenue due to a shift to more profitable contract work. Furthermore, the growing free cash flow (yield of 19%) is expected to pay down acquisition-related debt at an accelerated pace and provides greater flexibility to reward shareholders through further dividend increases or another ...
Join Seeking Alpha PRO to read this archived article and 11,574 other archived articles
FREESA PRO MEMBERS
IDEA GENERATORXExclusive access to 10 PRO ideas every day
INVESTING IDEAS LIBRARYXExclusive access to PRO library of more than 15,000 ideas
SECTOR EXPERT NETWORKXExclusive access to all sector experts for direct consultation
PERFORMANCE TRACKINGXTrack performance of all PRO stock ideas
PROFESSIONAL TOOLSXProfessional Idea Filters to zero-in based on industry, market cap and more
"In just the first month of using PRO, I used it to generate two ideas which were actionable for me. As a result of these two positions, I have earned more than 20 times the annual subscription costs for PRO."Michael Yagemann, Greenbridge Capital
"I am pleasantly surprised with the scope of small and mid-cap coverage PRO offers. You can't find that any where else."Patrick Rice, Mainstay Capital Management
You may cancel at any time for any reason, and receive a prompt refund for membership on months paid and not used (max. 6 months). Details