Innovative Solutions & Support, Inc. (NASDAQ:ISSC)
The Company designs, develops, manufactures and sells flight information computers, large flat-panel displays and advanced monitoring systems that measure and display critical flight information.
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Sales in the second quarter of fiscal 2008 were $6.8 million, up from $4.0 million in the second quarter of fiscal 2007, and up sequentially from $4.7 million in the first quarter of fiscal 2008. Revenues in the second quarter of fiscal 2008 quarter were comprised of a diversified mix of both Flat Panel Display, including Eclipse Aviation deliveries, and Air Data shipments. Gross margins in the second quarter of 2008 rose to 44.4%, up on a year-over-year basis from 23.7% in last year's second quarter and also up sequentially from 22.7% in the first quarter of fiscal 2008. Product margins in the current quarter were 40.3%.
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This Company has seen a disastrous 6 months going from a high of 29 to a low of 7; but so did most of the market. What I like about this stock is that at the moment it has released its financial statements, and posted a loss bigger than expected, so its stock has suffered a bit more. However, with the FAA tightening on Airline Regulations, and this company providing one of the major players in bringing airlines into US State Certification in order to fly here. The airlines(domestic) are going through major issues themselves right now besides regulation (oil prices anyone?) but foreign airlines still have to bring their aircraft into our Regulations if they want to fly into the country. And we have just relaxed a couple of rules to fly from Europe, where the euro is kicking the greenback, so more tourists are going to want to fly here= more airlines flying into the US= more Regulations have to be met= More money for ISSC. If that doesn't convince you, then I'll let you know that they have a HUGE amount of backlog for this year and the next with a bag of chips left over.
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Due to a quarterly miss stock has finally gotten to a place where it's cheap. Growth estimates are huge and they've got a nice backlog that doesn't even include FedEx and other customers. $180 million market cap, $56 million in cash, no debt. PEG 0.50. Growing sales at 200% a year, they've missed big on their earnings estimates for several quarters now. I expect them to turn it around, stock should double over the next year or two.
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This company sounds innovative
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good software products
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This one has doubled for me in my "real" account and it has room to grow with more airlines keeping older planes in service longer.
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The company is the market leader in the field of flight avionics .It designs, manufactures and sells products like flat panel displays and airdata products used for flight information to Department of Defense and commercial aviation sector. Adding to that, the company also sells individual avionic components and partial and complete air data systems.
The company mainly caters to retrofit aircraft market apart from the Original Equipment Manufacturers. It has been trying to position itselves as a complete system integrator of cockpit information from a pure play-manufacturing player. Net revenue for the fiscal 2006 decreased by 73% as a result of 83% decrease in sales of airdata product sales. Even a 56% sales hike in the newly introduced flat panel system could not offset this decline.
Demand for new commercial aircrafts have been rising with close to 420 aircrafts worth $7.2 billion sold in the first half of 2006.This spike is because of the introduction of low cost business aircrafts from Eclipse and Cessena. Department of Defense, which is also a major customer, will be upping its expense as part of modernization of its aircraft to support their ground troops in Iraq. These developments immensely open up the flight avionics and system integration market, which is expected to grow to close to $1.5 billion by 2007.
Flat panel system, which has been recently introduced, is being used in all the new aircrafts and as replacement to existing digital display. Also its dependence on retrofit market helps the company to leverage the aging aircraft fleet to its advantage. Thus the potential for the products by the company is massive which should reflect in its stock performance in the coming months.
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Well, I'm no genius when it comes to the various number parameters of stocks. However, it doesnt take a astrophysicist to conclude that this little giants product mix and primary customer (dod) will need it's services to retool and re-equip much of the gismos and Hi tech weapon systems in and coming back from IRAQ and Afganistan not to mention what is sure to be shipped to the phillipines,japan and S.Korea given the current instability in those regions and the hi % of equipment currently exposed in the field....just my opinion
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Increased opportunity for revenue generation, strong management, strategic approach to future product development.
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Low cost producer of cockpit display screens for aviation. Big gov't, commercial and private market. Just turning around.
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High margin company has excellent flat-panel display products for aircraft retro-fit market. $80M on balance sheet ($4/shr). Income can be lumpy, but backlog is growing.
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