Before September 11, Applied Signal Technology (APSG
) was a little-known company whose stock hardly moved. Having "technology" in its name became a burden when the tech bubble burst. But lately, Applied, a maker of signal-processing gear used by the FBI, CIA, and other surveillance agencies, has zoomed--from 5.19 a share on Sept. 10, 2001, to 12.80 on June 10. The stock has since eased--to 10.21 on Aug. 21--which prompted fresh buying from certain fans, including some who already own shares. "Applied is a pure play in intelligence gathering," says Tim Hasara of Kennedy Capital Management in St. Louis, which owns 7% of the stock.
Allied makes gear to bug phones, including cellular sets, and radio or satellite communications. The company has seen a "significant jump" in orders and new interest in its products since September 11, says Hasara, who sees the stock hitting 18 to 20 in a year. In mid-July, the company reported $18 million in orders during May and June, vs. $18 million in all of the previous quarter. Applied is not only a play on the spying game but also "a turnaround bet," says Hasara. Last year, Allied was losing money and laying off people. Now, it is rehiring--and started making money in the first half of fiscal 2002, ending Oct. 31. Hasara figures it will earn 45 cents a share in 2002, on sales of $80 million, and 75 cents in 2003 on $100 million, vs. a loss of $1.31 in 2001. In 2004, Hasara sees earnings of $1 on $125 million. Applied CEO Gary Yancey believes the rise in orders will continue. Applied may see a big order from the newly created Homeland Security Dept., says Hasara.
By Gene G. Marcial
Get BusinessWeek directly on your desktop with our RSS feeds.
Add BusinessWeek news to your Web site with our headline feed.
Click to buy an e-print or reprint of a BusinessWeek or BusinessWeek Online story or video.
To subscribe online to BusinessWeek magazine, please click here.
Copyright 2002, by The McGraw-Hill Companies Inc. All rights reserved.
Printer-Friendly Version
