David Nichols Recommends the Following Stocks: Sensytech and Applied Signal Technology
CHICAGO--(BUSINESS WIRE)--Feb. 12, 2003--Who said you can't time the market? David Nichols says that's about all you can do at this uncooperative time for investors. Learn how to handle this market and get a pair of this Featured Expert's recommendations on Sensytech (NASDAQ:STST) and Applied Signal Technology (NASDAQ:APSG). Click here for the full story exclusively on Zacks.com: featuredexpert2bw.zacks.com
Here are the highlights from the Featured Expert column:
While Nichols held out hopes that 2003 could be the year to break the bear, it's just not shaping up that way. It looks now like the markets are going to have to get worse before they can get better again. In spite of the academics, market timing is going to be more important than ever this year.
Pretty much unknown before 1970, EW, ESM and ELINT -- electronic warfare, electronic support measures and electronic intelligence -- are now the face of warfare in every industrialized nation. Sensytech (NASDAQ:STST) is profitably involved in all of them. With increased domestic and international activity in every business segment -- EW, communications and imaging -- Sensytech's fourth-quarter revenue soared $8 million, or 210%, to nearly $11.8 million; for the year, revenue jumped $16 million, or 97%, to over $32 million. Fourth- quarter income was $592,000, up 42%; fiscal year income jumped 79% to almost $2.2 million. Equally important for a company that lives by contracts, Sensytech's funded backlog for the year was $29.5 million, up a whopping 433% from the previous year. If awards to Sensytech continue at this rate, there's potential for record-breaking revenue and profit, with plenty of headroom for the stock to move.
Applied Signal Technology (NASDAQ:APSG) sells digital signal processing products, systems and services for detecting and gathering foreign telecommunications signals, a niche with many obvious applications for both defense and industry. Main customers are the U.S. government and its foreign allies, and a growing number of corporations. Revenue in the fourth quarter was $23 million, a 23% jump from the year before, mostly due to increased business in the company's engineering development contracts for the U.S. government. Revenue for the year was up 4% to $76 million from an increase in the sale of the company's standard products. Income for the quarter was $813,000, more than double the previous year's income; for the year income was almost $4 million compared to a net loss of $12.4 million last year, due in part to lower operating costs, the result of last year's restructuring and the accompanying absence of losses. The company should return to normal operating margins this year.
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