Stanley Inc.: Growing better with age

Rating:

Much like a fine wine, Stanley, Inc.’s (NYSE:SXE) results are purported to become better with age. Bolstered by a rock-solid backlog, a synergistic acquisition and continued organic growth, the provider of IT services to U.S. defense and federal civilian government agencies has a strong outlook.

Stanley’s backlog is robust with 90% of forecasted revenues already in the books. Continued support for the Space and Naval Warfare Systems Center in Charleston, S.C. is one of the company’s latest and largest contracts that could translate to $249.88 million in proceeds should options and terms materialize.

Aside from organic growth, Stanley acquired Oberon Associates in June for $170 million. The company, which provides engineering, operational intelligence and IT services, expands Stanley's customer base to include the U.S. Army, U.S. Air Force, Defense Information Systems Agency, and several other agencies throughout the intelligence community.

Wachovia analyst Edward Caso expects the Oberon acquisition to add $0.01 to $0.02 to earnings in 2009 and purports the acquisition will be more accretive in 2010, as it adds higher margin intelligence capabilities to Stanley’s service offerings. “Stanley continues to be the fastest (organically) growing government services provider by far,” Caso wrote in a research note on August 1. “We believe estimates will continue to drift upward as the company rationalizes the competitive synergies . . .

For access to the full article, you must be a registered member - it's FREE.

Already a member? Please log in below