Mercury Systems, Inc. (MRCY, Financial), the provider of signal and imaging processing for defense electronics contractors, continued to trade poorly because of pending cuts to the U.S. government's defense budget soon to be implemented with sequestration passed. We expect cash flow to be wiped out in 2013, but think the programs Mercury supports will come back strong, as will the company's cash flow. We admit to having egg on our face, having lived through this decline, but we think the company trades at a bargain at under four times future cash flow, so it is now worth our while to stick it out.
From Baron Funds’ first quarter 2013 commentary.
From Baron Funds’ first quarter 2013 commentary.
