Friday, December 12, 2008

Time to Buy Axsys Technologies (AXYS)?

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Last Friday we mentioned Axsys Technologies (AXYS) as an interesting 3rd candidate to add to our portfolio of government sponsored names [Dec 5: An Outperfomer in Defense: Axsys Technologies] The stock had been impervious to selloffs and holding all long term moving averages - so you think it's safe right? Not in a bear market - from low $70s to upper $40s in under a week - bears rip the hearts out of everyone. The stock has been pole axed the past 2 days on an analyst downgrade - surprising really to see how powerful the downgrade was on moving the stock price.
  • J.P. Morgan Securities downgraded Axsys Technologies Inc (AXYS), a provider of surveillance and imaging solutions, to "underweight" from "neutral"on valuation.
  • "A premium valuation is justified, but we believe the premium is now excessive," analyst Paul Coster said in a note to clients.
  • Coster believes that the company's fundamentals are solid and that it is well-positioned for the economic downturn owing to its exposure to diverse U.S. defense and homeland security programs. He, however, said the company may have to invest more in sales and marketing to grow its surveillance solutions product business.
  • "Until there's demonstrable pay-off from this investment, and a cyclical tailwind, we are reluctant to chase the valuation multiple up," he added.
  • The brokerage, which cut its price target on the stock by $3 to $56, expects Axsys to underperform the mean of the coverage universe in the near term. Axsys develops high-performance surveillance cameras and imaging systems for the aerospace and defense industries.
This name is not front and center of my eyes or else I would of probably bought this morning in the upper $40s, but I missed it. After faltering early today it is recovering nicely but we now want to see it regain the 200 day moving average of $57s - if so we'll probably jump in. This is one of those I wish I had some "beeping" alarm signal to let me know something on my watch list is exhibiting some big time downward action. Could of made a nice mint already in a few hours.

No position but stalking this one


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