Edac Technologies Corp. (EDAC) is a maker of jet engine components, tooling, fixtures, molds, and machine spindles. The company’s primary area of business is aerospace, where it makes jet engine parts, special tooling, equipment, gauges and components used to manufacture jet engines. Connecticut-based Edac could be a compelling play for investors in the event of increased defense spending by the federal government and as airlines refurbish and upgrade their current planes.
Last month, Edac noted that it expects sales to increase in the second half of 2008 and that its order backlog is currently at an all-time high due to increased efforts to expand its customer base. Sales for the first half of 2008 were just over $22 million, the company said. Going forward, the company said it expects aerospace demand to continue to be robust. For the fiscal year that ended December 2007, almost 75 percent of Edac’s sales came from the aerospace sector. Edac has been serving this industry for 50 years.
About 25 percent of Edac’s 4.67 million shares outstanding are held by institutions and mutual funds, including Axa, Deutsche Bank and Navellier & Associates. Also of note to investors, Chief Executive Officer Dominick Pagano purchased almost 3,700 shares of Edac stock earlier this month. That purchase raised his stake to nearly 356,000 shares. The company’s competitors include General Electric, Goodrich and Sifco Industries.
With an order backlog of $55 million and price-to-earnings ratio of eight, Edac’s shares could be attractive here. Investors need to monitor activity within the aerospace industry, particularly to see if Lockheed Martin ramps up production of the F-35 fighter jet for which Edac is a supplier.
Edac’s shares trade at $4.89 on volume of almost 52,000, the daily average for the last three months. The company has a market value of $22.8 million. The shares have a 52-week range of $3.05 to $11.40.
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