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The Zacks Analyst Blog Highlights Optex Systems, Frequency Electronics, Servotronics, Sypris Solutions and National Presto
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For Immediate Release
Chicago, IL – July 31, 2024 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Optex Systems Holdings, Inc. (OPXS - Free Report) , Frequency Electronics, Inc. (FEIM - Free Report) , Servotronics, Inc. (SVT - Free Report) , Sypris Solutions, Inc. (SYPR - Free Report) and National Presto Industries, Inc. (NPK - Free Report) .
Here are highlights from Tuesday’s Analyst Blog:
5 Microcaps with Exposure to Defense Spending
Unfortunately, the geopolitical landscape has become more complex of late and rife with tension. Conflict hot spots appear more widespread across the globe. We find it noteworthy that 18 NATO members have pledged 2% GDP spending on defense in 2024 vs only 7 members back in 2022.
Below we highlight 5 microcap stocks under Zacks coverage with exposure to defense spending. The companies may be supplying to US defense departments directly or to defense contractors that ultimately sell to both the US government and foreign governments. Investors should be aware that government contracts can be lumpy in terms of revenue conversion and subject to budgetary constraints based on the current political environment.
Optex Systems Holdings, Inc. manufactures optical sighting systems mostly for use by the DOD (Department of Defense). These systems have applications for military land vehicles such as the Abrams and Bradley models as well as night vision and rifle sights. Revenue for Optex Systems Holdings, Inc, increased 33.8% YOY in the past quarter while backlog increased 6.3% YOY. Gross Margin improved 540 bps YOY to 30% due to better fixed cost absorption, product mix, and pricing. Zacks has a current Outperform rating for OPXS.
Frequency Electronics, Inc. designs and manufactures RF and microwave assemblies for use in satellite payloads, missiles, UAVs, aircraft, GPS, and Electronic Warfare. Revenue grew 20% in the latest quarter for Frequency Electronics, Inc. with Gross Margin improving YOY from 31.1% to 40.3%. Backlog increased 36.8% YOY. Zacks has a current Outperform rating for FEIM.
Servotronics, Inc. manufactures controls and components for aircraft, jet engines, missiles, and manufacturing equipment. In the latest quarter revenue increased 15.3% for Servotronics, Inc. while Gross Margin improved to 16.6% from 10.9%. Zacks has a current Outperform rating for SVT.
Sypris Solutions, Inc. operates in two segments: technologies and electronics. The technologies segment supplies components to the manufacturers of autos, trucks, and recreational vehicles. The parts and services of the electronics segment are incorporated into radar, tactical ground stations, navigation systems, and weapons systems. While the latest quarter revenue increased 10.1% YOY for Sypris Solutions, profitability was negatively impacted by new program launch costs and unfavorable product mix. Zacks has a current Neutral rating for SYPR.
National Presto Industries, Inc. operates three segments including housewares and small appliances, safety, and defense. Over half of National Presto Industries’ revenue comes from defense and backlog increased 22.8% YOY in the latest quarter. The defense segment manufactures ammunition, detonators, and other military energetic devices and materials. Zacks has a current Neutral rating for NPK.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights Optex Systems, Frequency Electronics, Servotronics, Sypris Solutions and National Presto
For Immediate Release
Chicago, IL – July 31, 2024 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Optex Systems Holdings, Inc. (OPXS - Free Report) , Frequency Electronics, Inc. (FEIM - Free Report) , Servotronics, Inc. (SVT - Free Report) , Sypris Solutions, Inc. (SYPR - Free Report) and National Presto Industries, Inc. (NPK - Free Report) .
Here are highlights from Tuesday’s Analyst Blog:
5 Microcaps with Exposure to Defense Spending
Unfortunately, the geopolitical landscape has become more complex of late and rife with tension. Conflict hot spots appear more widespread across the globe. We find it noteworthy that 18 NATO members have pledged 2% GDP spending on defense in 2024 vs only 7 members back in 2022.
Below we highlight 5 microcap stocks under Zacks coverage with exposure to defense spending. The companies may be supplying to US defense departments directly or to defense contractors that ultimately sell to both the US government and foreign governments. Investors should be aware that government contracts can be lumpy in terms of revenue conversion and subject to budgetary constraints based on the current political environment.
Optex Systems Holdings, Inc. manufactures optical sighting systems mostly for use by the DOD (Department of Defense). These systems have applications for military land vehicles such as the Abrams and Bradley models as well as night vision and rifle sights. Revenue for Optex Systems Holdings, Inc, increased 33.8% YOY in the past quarter while backlog increased 6.3% YOY. Gross Margin improved 540 bps YOY to 30% due to better fixed cost absorption, product mix, and pricing. Zacks has a current Outperform rating for OPXS.
Frequency Electronics, Inc. designs and manufactures RF and microwave assemblies for use in satellite payloads, missiles, UAVs, aircraft, GPS, and Electronic Warfare. Revenue grew 20% in the latest quarter for Frequency Electronics, Inc. with Gross Margin improving YOY from 31.1% to 40.3%. Backlog increased 36.8% YOY. Zacks has a current Outperform rating for FEIM.
Servotronics, Inc. manufactures controls and components for aircraft, jet engines, missiles, and manufacturing equipment. In the latest quarter revenue increased 15.3% for Servotronics, Inc. while Gross Margin improved to 16.6% from 10.9%. Zacks has a current Outperform rating for SVT.
Sypris Solutions, Inc. operates in two segments: technologies and electronics. The technologies segment supplies components to the manufacturers of autos, trucks, and recreational vehicles. The parts and services of the electronics segment are incorporated into radar, tactical ground stations, navigation systems, and weapons systems. While the latest quarter revenue increased 10.1% YOY for Sypris Solutions, profitability was negatively impacted by new program launch costs and unfavorable product mix. Zacks has a current Neutral rating for SYPR.
National Presto Industries, Inc. operates three segments including housewares and small appliances, safety, and defense. Over half of National Presto Industries’ revenue comes from defense and backlog increased 22.8% YOY in the latest quarter. The defense segment manufactures ammunition, detonators, and other military energetic devices and materials. Zacks has a current Neutral rating for NPK.
Why Haven’t You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.