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Varchild2008 (84.56)

American Defense Systems unfair neglect...



July 09, 2009 – Comments (11)

Varchild first bought into (EAG) American Defense Systems  on February 6th, 2009 at 83 cents a share and then bought more the same day at 84 cents a share.

Since then...Varchild bought at 75 cents, 73 cents, 71 cents, 64 cents, 57 cents, 53 cents, and 52 cents a share.    Grand total share count thus far? 
6,261 shares   (approx. between .01% and .02% stake in the company's total outstanding common shares.)

At this rate in 5 years or less Varchild will have enough shares to be forced to report his stake to the SEC, cause it only takes about 5% to reach the limit at which you must report what you got.


I have no interest in purchasing any more shares for the time being because of this.

Let's say I abandon all of my shares in all of the other companys that I have in my portfolio and then spend the money entirely on EAG stock at the current today's closing price of 48 cents a share.

I'd have WELL OVER  64,594 total shares.... That would be between .17 and .18% stake in total common shares.

With an RSI value of near CRITICAL 33%.

That huge of a stake at a critically low RSI value in a Company whose business is absolutely far better this year than it ever was in company history.  They have a much bigger backlog today than they ever had before and with the latest presser regarding the HMEE vehicle saving a soldier's life due to the armor that ADSI (EAG) makes....that speaks volumes in just how bright a future ADSI has inspite of how competitive the Armor Industry is.

Sure, there is a lot of competition in the defense sector making lots of investors believe that when you invest in a defense stock you are gambling on X contract or Y contract going to that company.

Well... I say that type of attitude is wrong.  I say these defense stocks like (EAG), (BA), (FLIR), (RNT), (FRPT), (LMT), and so on.... All have MOTLEY FOOL Long Term Growth Value.

There's no reason to abandon EAG cause the share price keeps dropping.  Which is why I keep buying... staying on the *BUY* side until that share price goes to where I believe Fair Value is.

Right now... This ain't no FAIR VALUED stock... EAG is being treated here with Unfair Neglect.
Short-Term fly in the pants investors I guess don't like the idea of buying a stock like EAG and holding onto it forever like I do....  That's fine... Let them leave...  When this strikes at or near 37 cents a share (its 52-week low) then rest assured... If the share price doesn't spike back up again I am certainly going to be beyond motivated to dump something large in my portfolio and use the cash to scoop up more shares.

Maybe I'll ditch my MSM stock.    EAG's falling share price is definitely pushing me to dump something.

11 Comments – Post Your Own

#1) On July 09, 2009 at 6:02 PM, Varchild2008 (84.56) wrote:

Point of the article is that when you are a believer in 1 of your stocks so much... a falling share price doesn't make you want to dump the stock in panic and fear...or frustration....

A falling share price like EAG is experiencing simply makes you want to increase your stake as it keeps dropping.

My highest price point of 84 cents a share is most certainly not even close to Fair Valuing the company in terms of a 2010 through 2012 outlook.

This should be around $1.00 a share...  It should be surfacing above a $1.00...  (SWTX) keeps popping its little head above a $1.00 simply out of 2012 speculation over the California Press Release.... So (EAG) should be doing the same over the HMEE news + the Backlog + The increased potential and exposure the company is getting with their Armor business.

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#2) On July 09, 2009 at 6:12 PM, Varchild2008 (84.56) wrote:

Another point of my article here is that all of the TICKER SYMBOLS plus a huge amount of other ticker symbols....

They have 1 thing in common besides being in the Defense Sector....


They are getting dumped hand over fist... One stock after another showing itself to be AT or NEAR  Critical RSI.

The Defense Sector is quickly turning into a "FAMILY DOLLAR" Store that sells Platinum, Gold, and Diamond Jewlery of the highest quality backed by certificates of authenticity from a celebrity appraiser whose right there in the store telling you his signature on those certificates is his/hers..... and you can just go there and buy every item for $1.

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#3) On July 09, 2009 at 6:23 PM, Mary953 (84.26) wrote:


I am one of those shorter term stock buyers at the moment.  You are not being completely fair to EAG here.  The stock bounced between high 40's and low 70's for a bit there.  There was a nice 6 week period that it was quite easy to buy in for below 60 cents and sell at around 70 cents or more.  I know because, thanks completely to your blogging about EAG, I had it on my radar. And thanks to your blogging and a bit of investigating, that is exactly the sort of buying and selling I did.  At some comfortable numbers.  At the moment, I have very little invested anywhere, as I think the overall market is headed down.  EAG is on my short list of stocks that I will be gathering in to hold long term as all prices drop.  The company is a good one.  The stock is excellent.  This is one that I wish I could green thumb long term.  Instead, I will do even better.  I will invest in it - again.

To those who would laugh at the idea of a penny stock, I have two thoughts.  How would you react to a $55/share stock that  regularly zipped up to $72-$74/share?  Would you buy in?  How is the profit different?  And second, have you studied the fundamentals of this company lately?  Why not start with the open-ended, open-amount minimum 3 year armor clading contract for the Marine vehicles (I did note that EAG is the sole contractor, didn't I?  No?  It's in the stock reports.  They also do the lion's share of bulletproofing for your local police departments - and the Presidential limos)  This company will not be disappearing soon.

Thanks, Varchild!  It's a shame my CAPS portfolio cannot benefit as much as my real one can.


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#4) On July 09, 2009 at 7:08 PM, Varchild2008 (84.56) wrote:

Thanks for the heads up.... I was perfectly fine and content seeing that investors were giving it a .60 to .70 range.

The company still have issues... it's not a *perfect* stock as no stock in the market is no matter what the economy is like...

But... When this thing slipped below .60... That's when I said.. "Uh-Oh!"   "Here we go again....back down to the 52-week low."

And right now... ya know.. It's a red flag heads up moment.. If this thing does get extremely close to that 52-week low then that will be a GIFT for those who have some cash on the sidelines...

Hence... why I am thinking of figuring out where I can get some cash for grabbing shares below 40 cents a share.. if that's where this one is headed.

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#5) On July 09, 2009 at 7:11 PM, Varchild2008 (84.56) wrote:

The whole issue about having no Analyst to come out with a report and tell the investors to buy the stock until such and such a price level.... That's why so many are short term profit taking on the stock right now... No one really knows where Fair Value is for EAG.. They just know that you don't pass up on a 10 cent move on a penny stock.

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#6) On July 09, 2009 at 7:23 PM, alberta911 (< 20) wrote:

The only defense sector stock worth any speculation and risk we can find is


It has analysts who have praise and rated last year up to $18 or $19.  Trading at  .11 cents with a  speculation from management someone is going to buy them out.


If you want to be greedy when others are fearful dd vrs

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#7) On July 09, 2009 at 9:21 PM, Varchild2008 (84.56) wrote:

Per that reading it appears there's a CHANCE the company is headed off the stock market and into Private Corp. status.

I know very little about what happens to shareholders when a company goes private on them.... But, I am willing to bet it ain't good.

I'll stick with my EAG for now.

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#8) On July 10, 2009 at 12:07 PM, alberta911 (< 20) wrote:

When a company goes private a premium is paid...if not taken private book is still .22 cents more than your choice.  Best of Luck with EAG

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#9) On July 10, 2009 at 4:51 PM, Varchild2008 (84.56) wrote:

EAG no longer has debt covenants to worry about....Your stock does in amounts far greater than EAG's problems were negotiated down to.

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#10) On July 10, 2009 at 8:28 PM, Mary953 (84.26) wrote:

Just a FWIW, only an idiot invests without doing his own investigating.  But one of the terrific things about CAPS is that there are so very many people who genuinely want to offer information on companies that they have gotten excited about. For me, a small percentage gets investigated  and.about one in ten that I investigate is worth taking to a next level of paper trade/small amount wagered.  My short list of good investments resulting from this stands at about six.  Less than one for every month that I have been investing and studying at CAPS. 

American Defense Systems is firmly in place on this list.  It passes my acid test of being able to rebound and hold its own in a niche that is necessary.  I know what it does and why I am investing in EAG and I can explain it if need be.

That is enough for me.  Thanks, Varchild.

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#11) On July 13, 2009 at 1:10 PM, alberta911 (< 20) wrote:

100% correct...We will profit take from Oshkosh sooner than later....and circle for an re-entrance into the sector...perhaps your pick..perhaps back to our currency...there is a good contract pipe on it's way...

For What It's Worth...We are positive the author Varchild knows the defense sector not from CAPS but real DD....

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