=DJ InVision Up -2: More Upside Hinges On Fundamental Growth
By Lingling Wei Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--InVision Technologies Inc. (INVN), a maker of bomb-detecting devices, broke its 52-week high Tuesday, as the company's recently-announced contract win with the U.S. government continued cheering investors.
For the upward momentum to continue, said John Buckingham, chief portfolio manager at Al Frank Asset Management Inc., InVision will have to impress investors with more substantial growth in revenue and earnings.
InVision's shares have soared more than 12 times in value over the past six months, thanks to added urgency to tighten up airport security in the wake of the terrorist attacks.
But, compared to the jaw-dropping gain in the stock price, InVision's fourth-quarter revenue rose only modestly to $23 million from $21 million a year earlier. Its net income of $6.8 million, or 43 cents per diluted share, although impressing, was favorably impacted by a deferred tax valuation allowance reversal of $5.7 million, amounting to 36 cents per diluted share.
Buckingham, who first bought InVision's shares when they traded at $1.10 at the beginning of 2001, said he had already sold 75% of his holding of the stock since Sept. 11.
"I'm just going to sit back and smile," Buckingham said.
"This is a company with tremendous growth potential," he added, but its still lackluster fundamental performance keeps the stock a "momentum investment."
Buckingham said his value-oriented fund will continue holding shares in InVision, but "if the stock goes over $50, I may consider selling some more shares."
The Newark, Calif., company is one of the only two companies certified by the Federal Aviation Administration to make the explosive-scanning machines - priced at about $1 million apiece - for the nation's airports. The other company is L-3 Communications Holdings Inc. (LLL), based in New York.
The bomb-detecting market, Buckingham said, is as big as $5 billion a year.
A company spokeswoman wouldn't comment on the stock's movement.
In recent Nasdaq Stock Market trading, shares of InVision rose 4.8% to $47.20, with 2 million shares changing hands. Average daily volume is 3 million shares.
The stock's previous 52-week high was $47.09, set in December.
Rival L-3 Communications recently tacked on 2.3% to $111.70.
-By Lingling Wei, Dow Jones Newswires; 201-938-2089; Lingling.Wei@dowjones.com
(END) DOW JONES NEWS 03-12-02 |
