guvendemir Espey Manufacturing & Electronics Corp. (NYSE: ESP ) is a maker of power supplies, converters, transformers, and related products, used particularly in defense vehicles and railroads. The company has been growing recently, in line with higher spending on U.S. defense. Coupled with cost efficiencies, the company’s profits have soared. However, current stock prices imply significant growth and further margin improvements. Although the company’s revenues provide some future visibility because of backlogs and their close correlation with defense spending, growth is risky because the market is very competitive. Most importantly, the company is priced for growth, meaning that if it grows, the investor is left with an adequate return, but not if it does not grow. This is not an asymmetric bet and therefore does not represent an opportunity. Note: Unless otherwise stated, all information has been obtained from ESP’s filings with the SEC . Business description Power systems for defense vehicles : ESP designs and manufactures power components (converters, transformers, supplies, UPS) used mostly in military vehicles. The company also sells to the railway industry and does not disclose segment figures, but a revision of its products reveals that the enormous majority is related to military applications. Small […]
K&X Design and Investment Technology, LLC
Invest The Invisible Impact
K&X Design and Investment Technology, LLC
Invest The Invisible Impact
