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The Comparison Of Arotech (ARTX) To Three Quality Stocks And One Future Stock: ARTX Should Be $20.94 A Share (Conservative) And $69.77 A Share (Speculative)

Summary

The comparison of Arotech (ARTX) to three quality stocks like: Colgate Palmolive Co.(CL),Procter & Gamble Co.(PG),The Coca-Cola(KO) proving ARTX should be $20.94 a share now.

The comparison of Arotech (ARTX) to one future stock like Tesla proving ARTX can be $69.77 now.

My opinion about Arotech (ARTX) base on its finance, products, technology and the environment.

The quality stocks are profitable, growing, and safe stocks. I don't think there is anybody disagreeing. CL, KO, PG are quality stocks.

(sourses from TD Waterhouse)(prices are on Friday Apr25/2014)

Stock

Ratio

ARTX Should Be

(NYSE:CL) is trading at $66.24

3.5xSALE

3.5x4.21=$14.74

is trading at $66.24

26.39xBOOK

26.39x2.38=$62.80

(NYSE:KO) is trading at $41.01

3.9xSALE

3.9x4.21=$16.42

is trading at $41.01

5.44xBOOK

5.44x2.38=$12.95

(NYSE:PG) is trading at $81.41

2.6xSALE

2.6x4.21=$10.95

is trading at $81.41

3.28xBOOK

3.28x2.38=$ 7.8

Add all ARTX's numbers and then divide by 6. We will have the average price ARTX should be trading right now. It is $20.94.

Everybody knows Tesla (NASDAQ:TSLA) which grows from $15.00 a share in July 2010 to $199.8 on Friday April 25, 2014. But no money has been made. In order to make money quickly, many short sellers tried to bash the stocks, but failed.

Why are investors willing to pay big premium for Tesla? Because the investors expect Tesla will make huge money in the future from its disruptive technology, electric vehicle (NYSE:EV).

Future stocks are the stocks will not make money now, but they will in the future. Tesla is one of them. Let's look at the chart below:

 

P/E

P/S

P/C

BOOK

P/B

PRICE (as of Friday April 25/2014 closing)

TSLA

n/a

12.3

773.0

$5.42

36.87

$199.85

ARTX

25.2

0.8

14.9

$2.38

1.42

$3.37

The chart tells us, ARTX is very cheap compared to Tesla.

   

ARTX Should Be

TSLA is trading at $199.85

12.3xSALE

12.3x4.21=$51.78

 

36.87xBOOK

36.87x2.38=87.75

Add two ARTX's numbers then divide by 2. We will have the average price ARTX should be trading right now. It is $69.77.

I currently hold a few thousand shares of ARTX and planning to hold them for a long run. I would like to tell you why.

After several years losing money, Arotech has started to make money now. It makes $.13 a share in 2013 after losing ($.21) in 2012, ($.82) in 2011, ($.07) in 2010, (.24) in 2009, (.30) in 2008, (.31) in 2007 etc…

Look into the expected earnings in 2014 of these companies: CL, KO, PG, and ARTX. We will see how fast ARTX grows comparing to the rest.

- CL will earn $3.00 a share, 25% increase from 2013.

- KO will earn $2.08 a share, 11% increase from 2013.

- PG will earn $4.47 a share, 20% increase from 2013.

- ARTX will earn $.21 a share, 62% increase from 2013.

Arotech is the start up Technology Company. Most of the time this kind of company will not make money until it proves to the consumers that it has useful, reliable products. Now ARTX has already makes money that means its products have had the market. But how huge of the market, is another question.

I think it has huge market. Indeed it has.

Simulation, training, and consulting division:

Develops and manufactures simulators and training courses for police and law enforcement agencies.

Develops and manufactures simulations and trainers for air combat applications and vehicle driving operations.

This division generated $8,929,644 in 2013, an increase of 222.85% from $2,765,898 in 2011. What do you think when reading these numbers? If Arotech can keep this rate, it will be a billion dollars company soon.

Battery and power systems division:

Designs and manufactures primary and rechargeable batteries, related electronic circuits and associate chargers for military applications.

Develops and manufactures military rechargeable and non rechargeable lithium batteries and smart chargers.

Develops and manufactures zinc-air batteries for military applications, batteries for zero-emission electric vehicle, safety products.

This division starts to generate income for Arotech in 2013. In another word profitable now .I think 2013 was breaking point for ARTX. The order for lithium batteries has poured in:

- Feb 11/2013 -$10 Million in orders of batteries.

- Feb25/2013 -$2.4 M.

- Mar14/2013 -$1.5 M.

- Jul1/2013 -$5M.

- Sept3/2013 -$2M.

- Oct31/2013 Arotech receives orders to develop special battery chargers for unmanned aircraft vehicles.

- Jan22/2014 -$2.4M.

- Feb19/2014 - $3.5M.

- Mar24/2014 -$2M.

Recently, May5/2014: Arotech announced that it has received new orders from military customers amounting to $5.2 million.

Robert S. Ehrlich, Arotech's Chairman and CEO commented:"Our battery division is having a very exciting year so far. We have seen important R&D developments such as our progress with ion flow battery. Some of these recent orders were from global defense manufactures that continue to purchase from us, demonstrating their trust in the reliability and quality of our products for use in rugged military environment ",

Why the army keeps ordering again and again? Its operation relates to men's life. It needs reliability and quality products to protect soldier's life. Imagine when the soldiers want to call for help in the middle of the battle field and the batteries die.

When other companies realize the importance of Arotec's products based on reliability and quality. They will buy. They might be: Tesla, Apple, Samsung and etc…

What I like most about Arotech is ion flow battery."Arotech's battery division announces successful lab test of ion flow battery for grid storage, the market for flow battery is expected to exceed $400.00 (four hundred) billion by 2020. Arotech's battery offers promise of substantial benefits over current technology.

In short Arotech is a investable company which might grow several fold in the short time.

Disclosure: I am long ARTX. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.