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JimVanMeerten (56.04)

Defense contracting



July 23, 2010 – Comments (0) | RELATED TICKERS: CVU

Today's addition to the Barchart Van Meerten New High portfolio is a small defense contractor. We are looking at this as a short term price momentum play not a long term investment.

CPI Aerostructures, Inc. (CVU) is comprised of two distinct entities: CPI Aerostructures, Inc. and Kolar, Inc. CPI Aerostructures, Inc. engages in the contract production of structural aircraft parts for the United States Air Force and other branches of the U.S. armed forces as a prime contractor or subcontractor for other defense prime contractors primarily in the United States. The company, as a prime contractor, offers skin panels, leading edges, flight control surfaces, engine components, wing tips, cowl doors, nacelle assemblies, and inlet assemblies for military aircraft. As a subcontractor, it offers various pods, and modular and structural assemblies for military aircraft; and various kits and assemblies for the S-92 civilian helicopter, as well as operates as a subcontractor to prime contractors in the production of commercial aircraft parts. The company was formerly known as Consortium of Precision Industries, Inc. and changed its name to CPI Aerostructures.

The stock came up on my daily Barchart screening for stocks hitting the most frequent new highs. This one hit 15 new highs in the last 20 trading sessions including 5 in the last 5. Last months price appreciation of 17.58% has given the stock a 96% Barchart technical buy and a Trend Spotter (tm) buy. The stock trades around 10.79 with a 50 day moving average of 9.43.

Wall Street hasn't discovered this stock yet and only 1 analyst follows it but he thinks the stock will have a 25% 5 year annual compounded EPS growth rate.

Investors also haven't found it either. On Motley Fool the 2 investors that have given opinions think it will beat the market.

I'm adding CPI Areostructures ( CVU) to the Barchart Van Meerten New High portfolio but will keep a very close eye on it. Points to consider:

1 - 15 new highs in the last 20 sessions

2 -  17.28% price appreciation last month

3 -  96% Barchart technical buy signal

4 -  Trend Spotter (tm) buy signal

5 -  Wall Street analyst prediction of a 25% EPS growth

6 -  Extremely small but positive investor sentiment

7 -  Get in early but be prepared to get out early too


Jim Van Meerten is an investor who writes on investing here and on Barchart Portfolio Blogs. Please leave a comment below or email

Disclosure: No positions in the stock mentioned at the time of publication

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