Invision Tech (INVN) is a company that makes equipment for scanning
explosives in the baggage checked on airlines.
They have this technology licensed from Imatron(IMAT).
They are the only FAA approved company that makes this type of
equipment.
Magal security (an Israeli company) (MAGSF) is anothe company
that makes equipment for a similar purpose but not as capable.
Invision equipment costs between 800K-1Million$, Magal costs about 1/2 Million $(mostly sold in Europe).
With the recent TWA disaster, it appears that INVN equipment would be
very desirable to gurantee safety of passengers and they have worked closely with FAA in installing and testing their equipment at some domestic (Hartsfield, Atlanta) and some International airports.
However, the installed base is currently minimal and that would indicate tremendous potential in the long term if FAA mandated
its use and the company would fly off.
Its stock jumped up from 10 to more than 20 in the last week based on
the potential.
The question is: what should an investor do in the short and long term?
Some other useful data about the company:
1. They have no earnings yet, last quarter loss of .39 per share.
2. The company is small with about 4 million shares floating and not sure if they can meet the production demand if a sudden growth were to take place (unless someone large buys them).
3. The machine costs 1 Million$.
4. A machine can scan only 250 bags per hour with today's technology
which would appear inadequate for a large busy airport, they say it
would ramp it up to 600 bags per hour in a few years (I am not sure
if it is adequate for a large airport even then considering its price).
There has been a lot of optimism over this stock lately and I think it
would be worth a discussion on this forum about what people think about investing and also add to the information base.
The dilemma for the investor is that on one hand if the TWA findings
indicate that there was an explosive, the stock would take off on speculation that the demand would skyrocket (and FAA may mandate it),
on the other hand if an explosive was not involved, it is a too high a price in its current state and could be a good short.
Thanks |
