Mike Arnold
Long only, small-cap, tech, growth at reasonable price

AeroVironment Flying High

Executive summary:

  • A solid Q3 FY 2014 earnings beat and bullish guidance provides runway for growth at AeroVironment (NASDAQ:AVAV).
  • Business contains two unique, but disparate operating businesses: (1) electronic vehicle charging stations and (2) unmanned aircraft systems.
  • Recent deal with large defense contractor Lockheed Martin (NYSE:LMT) validates AeroVironment, and could make it an acquisition target.

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AeroVironment ("Aero") is a "market share leader in unmanned aircraft systems ("UAS") and industrial electronic vehicle ("EV") charging systems." Both are attractive, niche and growing industries where Aero has considerable experience and first mover advantage.

But what a difference a year makes in terms of valuation in the mercurial markets.

AVAV data by YCharts

One year ago, shares of Aero...

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