This item could be relevant to the proceedings.....
Stock Profile : Short-sellers are discovering that momentum players as a whole aren't the clueless stock bandits that their choice of equities sometimes portrays. Today, shares of X-ray screening and explosive detection systems designer OSI Systems (OSIS 24.55 +2.97) have exploded to their highest level since March 2000, as traders recognize the presence of this important technical area and short-sellers give up the ghost and reach for a bottle of aspirin. More intriguing is the possibility of institutional accumulation of this name in the same fashion that contributed to InVision's (INVN) rise from $3 to $47 (1467%). Many shorts bet against INVN on the assumption that it was nothing more than a plaything of momentum players. It is evident by the short interest (24% of the float) that some of the same assumptions are being made about OSIS... OSI Systems is a designer of security products ranging from carry-on passenger baggage screening equipment to large cargo X-ray scanning systems. In 2000, the co was awarded a contract by the FAA valued at up to $40 mln to provide x-ray screening systems at selected airports throughout the U.S. Along with the FAA business, OSI garners revenue from freight carriers, private business, and government facilities, to name a few. Co recently struck a deal to acquire PerkinElmer's carry-on passenger baggage screening assets. If approved, the purchase would vault OSI to the top position in the market for carry-on systems and potentially double co's security business. In addition, OSI will acquire assets related to PE's ARGUS explosive detection X-ray system. ARGUS technology is being developed under FAA grants to three companies (L-3, PE, and InVision) as a less expensive alternative for explosives detection at mid-sized, regional airports. OSI is also the lone recipient of phase two contract from the FAA for the development of an even smaller detection system named BANTAM... After rising almost 500% since 9/11, stock still sports a market-cap of less than $300 mln. On forward P/E basis, stock trades at 31x projected 2002 earnings of $0.78. Estimates are likely to climb as orders related to the Airline Security fall into backlog. Given that OSI is positioned for explosive growth over the next several yrs, we do not think a 31x multiple is out of line. While stock is vulnerable to a near-term pullback, we do not believe this will be the last time in the coming months that investors will find the stock trading at a new high. --Damon Southward, Briefing.com |
