Stock Talk
The modern battlefield is making one thing clear: low-cost drones are forcing militaries to rethink defense spending. AVAV and VVX are looking more interesting, with each tied to newer counter-drone offerings. Both systems also appear built around one compelling battlefield feature: fast mobility. An interesting aspect of both systems is the use of Commercial Off The Shelf (COTS) platforms, as the government sometimes prefers ready-to-go solutions.
AeroVironment (AVAV), already known for military grade drones, drew added attention following a recent 60 Minutes segment with Lesley Stahl showcasing a new AVAV offering called the LOCUST laser system. A mobile laser platform with low cost per shot could prove compelling in the years ahead.
However, widespread sales of advanced laser systems can face hurdles, including export controls, production scale-up, field power requirements, and military procurement timelines. One very interesting aspect is the report that a LOCUST laser system was rolled onto a U.S. Navy ship and successfully tested against multiple drones.
V2X, Inc. (VVX) is a new stock being introduced here on The Jones Report.
About V2X
V2X is a global defense support company with about 16,000 employees serving U.S. and allied missions in logistics, readiness, security, and technology support.
Unlike more story-driven names, VVX already appears to have a solid earnings base through defense systems support, logistics, readiness contracts, and programs tied to F-16 aircraft worldwide. In addition, VVX has developed the Tempest mobile anti-drone / interceptor system, already being deployed in Ukraine according to some interesting videos on the internet.
One advantage of Tempest over laser systems may be better foul-weather usefulness and longer reach. In that light, each system may complement the other — laser for smaller swarm drones, and Tempest for tougher threats or targets at longer distances.
Trading Notes
AVAV has shown strength but has also traded volatile, and the shares are not cheap. Chasing strength is not always the Jones way. If interested, maybe very small share entries on dips and patience, letting the story and numbers continue to develop.
VVX appears to have stronger current earnings metrics, but recent large-holder selling may still be creating some stock overhang. The quarterly report is due May 4, and the market will likely be watching closely. Prior positive earnings and the Tempest system put VVX in the very interesting category here at The Jones Report.
Stay Watchful.
- Jones Report
This site is just for fun and insight, with no sponsors and no affiliations. If you like this free Jones Report, tell a friend. Why not?
________
______________
More later so ....Stay tuned, if you dare!
For now, we close by noting that any view on the market and stocks on any particular day may change in the days to come. That is why we watch and see how our views match up with reality. Looking ahead a few months may be a way to do things - but thinking too deeply about world events and the recent alliances forming, can make projecting ahead a dicey endeavor.
All in all - we use the word maybe "some", not "too much" and play it accordingly. Never get arrogant in our notions because things do change - and individual stocks are subject to many factors outside our control. So, we try to -stay aware.
With all the above caveats and attempted prognostications, I will close this post. Stay tuned for more opining on the market and stocks to watch.
