FEIM - Frequency Electronics: The Upturn In Business Is Not Yet Reflected In Price

2024-02-19 01:56:23 ET

Summary

• Frequency Electronics has announced a series of contracts totaling $44 million in a single month, which, if delivered as intended, could significantly increase revenue.
• Management expects gross margins to reach 50% within the next year, which, combined with the revenue growth, could lead to substantial earnings growth.
• A change in management in 2022 has led to a significant increase in revenues, margins, and profitability.

Value Investing Is At Its Core The Marriage Of A Contrarian Streak And A Calculator.

- Seth Klarman

I had recalled a quote about the market that I couldn't quite place that said something to the effect of "Everyone has a calculator" suggesting being able to do basic math isn't much of an advantage in markets. When I searched for the origin I found the above quote by Seth Klarman instead. As it turns out, I like that one a lot better because I've made an investing career out of applying basic common sense and a calculator to my decisions, and also because Seth Klarman is an investing legend. And for anyone who doesn't know, I approach markets as a set of probabilities. I weigh the evidence I have and the probability of various events occurring and try to estimate what the impact will be on the share price. I'm rarely looking more than a year out, and for that, a calculator can be pretty handy, especially when playing in corners of the market with less competition....

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