“Red-hot IPO — Mini Drones and Cramer Mania”

By Travis Johnson, Stock Gumshoe, April 3, 2007

This one came through a few days ago, and it’s actually an interesting little company so I thought I’d sleuth it out for you.

The sell here is for a special report subscription from Amberger at Taipan, one of the newsletter publishers I hear from a lot. They want you to buy a special report on this company, and get online access to company-specific updates — actually kind of interesting, it’s like buying a newsletter subscription about just one company, and it’s certainly much cheaper than a full newsletter, though I have no idea how useful it might be.

And really, they’re probably not going to tell you any top-secret stuff that you couldn’t find in the media and in the company filings, if you’ve got a few minutes … so why not just stick with your friend the Stock Gumshoe and we’ll track down the name of the company to get you started?

This is for a stock that was fairly recently “one of the hottest IPOs on Wall Street” that “cooled down” a bit and is now “expected to hand you 100% over the next 12 months.”

The company makes the little spy plane unmanned drones that you’ve probably seen — though there are certainly a surprisingly large number of companies involved in this business.

According to Taipan, this company’s “life-saving spy planes actually weigh under a pound and can be launched by one soldier.”

That’s pretty amazing — sometimes it feels like my phone weighs more than a pound.

These tiny planes can be equipped with microphones, or with chemical sniffers for more advanced uses.

Specific hints:

“it soared $6.93 or 40.76% on the first day of trading”

“Its light live video-feed technology helped garner the Best of What’s New Award from Popular Science in the Aviation and Space category.”

Sales of $139 million

$11 million in earnings (yep, profitable).

“Revenue growth rate is an astounding 71%”

The company has a big backlog of orders ($79.6 million) from across the US military, and a big recent contract of $46.8 million from the Army.

So if we mix all that data up into the great Gumshoe perco-intellitron, we’ll find that the answer is …

AeroVironment (AVAV)

This recent IPO did indeed end its first day of trading at $6.93 over its $17 offering price on January 23 (an offering that was pre-hyped by Cramer and therefore already priced over its expected $14-16 range) . It has since dipped a couple of times down to just over $20. And the sales and earnings numbers for 2006 do match up — though I can’t promise earnings growth, analysts are pegging this at both a forward and trailing PE of about 24, which implies a lack of earnings growth (though sales growth should be significant).

Cramer recommended picking it up under $20 and selling it over $25 when he talked about this as the next hot IPO the week prior to its launch, for whatever that’s worth. So if you listened to him, unless you got in on the IPO you wouldn’t yet have been able to buy it or sell it — he did peg the trading range for this one almost exactly, which is interesting.

So there you have it — if you want more, you can subscribe to the special company reports on AVAV from Taipan and I’m sure they’d be happy to take your money, but if you just want the name of an interesting company to research on your own for a possible investment, then the Stock Gumshoe’s your guy and you can move right on to checking out the IPO filings and press reports since the company went public. Happy due-diligencing.

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December 5, 2009 6:09 pm

Cramer claims he said to SELL
C citibank when it hit 5.00
yet i remember him saying he liked
it to 6
thats why i bought it at five and
anybody out there hear him say
to sell @5?