AeroVironment (AVAV): Gregg Early’s top stock for 2010
Technology expert Gregg Early looks to AeroVironment (NDSQ: AVAV) as his top pick for the coming year.
The editor of The New Tech Investor -- and the soon-to-be-launched 2020 Portfolio -- explains, "Although the firm's miltary aerospace business should be strong, it is the firm's new 'clean technology' and energy efficiency projects that should be the real growth kicker."
"AeroVironment started off 2009 strong but it was hit in the spring by the global economic collapse and the irrational fears of investors -- both individual and institutional -- about what the future held in store for this unique firm.
"But 2010 should be the perfect climate for this company to continue is comeback and head to new highs.
"AeroVironment was founded by the father of human powered flight, Dr. Paul MacCready (1925-2007), the inventor of the human powered Gossamer Condor and Gossamer Albatross (which was flown across the English Channel and resides in the Smithsonian Air and Space Museum).
"MacCredy also developed the first solar powered aircraft, the Gossamer Penguin and the Solar Challenger. He also co-developed the GM Sunraycer, one of the first solar powered land vehicles.
"His revolutionary developments in aerospace design were put to good use in AeroVironment's unmanned air systems (UASs) division.
"The company's hand launched and micro UASs are deployed extensively in Iraq and Afghanistan with special forces units and well loved by the troops who rely on them.
"While general defense spending is on a downtrend, C4ISR (command, control, computing, communications, intelligence, surveillance, reconnaissance) budgets are increasing briskly across all the armed services as well intelligence and homeland security sectors.
"This business has sustained AeroVironment in the past and will continue to generate more business in coming years. But it Efficient Energy division is the real growth kicker.
"The company pioneered electric vehicle (EV) charging stations and has a long and abiding relationship with many car manufacturers as well as government agencies.
"As EV filling stations begin to dot the US landscape--and that development is already growing briskly in the West -- AeroVironment will be a significant player.
"Also, because the stimulus plan had the unintended effect of holding up cleantech projects as everyone waited to see who would get government money, it made 2009 a tough year for cleantech.
"Now that the monies have been earmarked, projects will move ahead faster now that companies have better visibility on where the funding will be derived. AeroVironment is a buy up to 35."
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