While I am new to GuruFocus, I am not new to investing. I was actually quite surprised to see VSE Corp (VSEC, Financial) missing from the list of guru holdings.
VSE was founded in 1959 and exceeded $1 billion dollars in revenue in 2008. It is an industry leader in the refurbishing of military vehicles, including naval vessels, which get delivered to countries around the globe that are friendly with the United States. Furthermore, it provides management and consulting services to the DOD, infrastructure support, along with IT services. It has been recognized as a leader over the last few years by Forbes, Business Week, The Washington Post, etc.
Currently trading at $33.02, the Fair Value Calculator indicates a value of $117.11 with a Margin of Safety of 72%, the highest among its competitors. My fair value is $91 with a Margin of Safety of 63%.
While 2010 was not the best year for the company, the likable CEO, Maurice “Mo” Gauthier, appears to be straightforward regarding tough times and appears to have a vision for the future. Responding to the 3rd quarter results, he responded, “…our focus on strategic efforts to improve profitability is paying off, as demonstrated by consistent incremental increases in our profit margins”. So how does VSEC management measure up? Management appears to be up to the task:
Return on Invested Capital hovers at around 26. The ROIC has been over 20 for at least 5 consecutive years with an equally impressive ROE of 16.3 over 10 years and 24.7 for the last 3 years and currently at 27.11. Insiders are shown to own approximately 25%.
While several defense contractors took hits with the Defense Department slowdown, this stock is about as cheap as you can find one and has a lot to offer. With little debt, the balance sheet should make investors feel fairly protected as far as a downside.
Some of the metrics to be considered:
In August of 2010, VSE acquired Akimeka, a leader in providing health services and logistics to the DOD should help VSE’s bottom line. Akimeka is headquartered in Hawaii with offices in Virginia, Florida and Texas.
They have acquired some new contracts as of late, which have been delayed under the DOD process.
Their Federal Group acquired a 5 year prime contract with the U.S. Army and their International Group was given a 10 year contract to provide support services to DOJ and the ATF. The Energetics Incorporated subsidiary has also signed a 3 year contract with DOE. Other contracts have been recently posted.
This stock deserves more recognition.
Disclosure: Long on VSEC
VSE was founded in 1959 and exceeded $1 billion dollars in revenue in 2008. It is an industry leader in the refurbishing of military vehicles, including naval vessels, which get delivered to countries around the globe that are friendly with the United States. Furthermore, it provides management and consulting services to the DOD, infrastructure support, along with IT services. It has been recognized as a leader over the last few years by Forbes, Business Week, The Washington Post, etc.
Currently trading at $33.02, the Fair Value Calculator indicates a value of $117.11 with a Margin of Safety of 72%, the highest among its competitors. My fair value is $91 with a Margin of Safety of 63%.
While 2010 was not the best year for the company, the likable CEO, Maurice “Mo” Gauthier, appears to be straightforward regarding tough times and appears to have a vision for the future. Responding to the 3rd quarter results, he responded, “…our focus on strategic efforts to improve profitability is paying off, as demonstrated by consistent incremental increases in our profit margins”. So how does VSEC management measure up? Management appears to be up to the task:
Return on Invested Capital hovers at around 26. The ROIC has been over 20 for at least 5 consecutive years with an equally impressive ROE of 16.3 over 10 years and 24.7 for the last 3 years and currently at 27.11. Insiders are shown to own approximately 25%.
While several defense contractors took hits with the Defense Department slowdown, this stock is about as cheap as you can find one and has a lot to offer. With little debt, the balance sheet should make investors feel fairly protected as far as a downside.
Some of the metrics to be considered:
PE | 7.15 |
PEG | 0.67 |
PS | 0.23 |
Book Value | $23.04 |
5 Year Annual Growth - Net Income | 47.47% |
5 Year Annual Growth – Revenue | 36.26% |
5 Year Annual Growth - Eps | 44.36% |
LTD/Equity | 10.74 |
TD/Equity | 16.81 |
Price/Book | 1.54 |
In August of 2010, VSE acquired Akimeka, a leader in providing health services and logistics to the DOD should help VSE’s bottom line. Akimeka is headquartered in Hawaii with offices in Virginia, Florida and Texas.
They have acquired some new contracts as of late, which have been delayed under the DOD process.
Their Federal Group acquired a 5 year prime contract with the U.S. Army and their International Group was given a 10 year contract to provide support services to DOJ and the ATF. The Energetics Incorporated subsidiary has also signed a 3 year contract with DOE. Other contracts have been recently posted.
This stock deserves more recognition.
Disclosure: Long on VSEC
