Thursday, November 16, 2006

Hit #128 (Essex)

Defense technology/services provider Essex (KEYW) is being acquired by Northrop Grumman for around $580 million in a cash deal. The offer, of $24/share, makes for a gain of 36.44% over my average cost per share of $17.59, paid just a few weeks earlier.

In earlier posts, here and here, I had mentioned other defense targets like Mantech (MANT). I own Mantech shares, and have also recently bought into Allied Defense (ADG), Dynamics Research (DRCO) and Argon ST (STST). The latter three still look attractive.

One player mentioned in those posts, Cogent (COGT), has taken a severe beating and looks extremely undervalued, especially considering its leadership position and its takeover potential.

SI International (SINT) is also likely to be bought out, though I am still waiting for a better entry point.

An attractive buy and hold investment in this sector would be SAIC (SAI), which went public recently. Long term investors in this model company will be rewarded handsomely.

Previous hit - Bema Gold (#127)


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