This Penny Stock Could Soar If War Breaks Out With Syria!
It’s looking more and more like war with Syria is a done deal.
This morning Secretary of State John Kerry issued an ultimatum to Syrian President Bashar al-Assad. Turn over your entire stockpile of chemical weapons within one week or face a US military attack.
But it’s not likely the Syrian President will comply with Mr. Kerry’s demand.
The Syrian President continues to deny that his government was behind the August 21st chemical attack that killed an estimated 1,400 Syrian civilians. And he has warned the US to “expect every action” in retaliation to an attack on Syria.
In fact, even Mr. Kerry doesn’t believe Mr. Assad will just hand over his chemical weapons.
Here’s the thing…
If war does break out, it could mean the entire Middle East will be thrown into a chaos of bloodshed.
Both Syria and its ally Iran have threatened to retaliate against Israel if the US attacks Syria. And Israeli Prime Minister Benjamin Netanyahu has made it clear Israel will “respond in strength” if attacked.
Now, I don’t mean to appear callous about the prospect of war. Because I’m not. I’m a peace loving person who wishes for nothing more than to see conflicts resolved peacefully and without loss of life.
What’s more, I have relatives who live in northern Israel. If war does break out, they will most certainly be at the center of any “retaliatory” strike against Israel. Obviously, I fear for their safety.
However, it’s my job to provide my readers with timely stock market trading ideas. And there’s no question the market will react to a war in the Middle East.
One likely reaction is a rally in aerospace and defense stocks. After all, these are the companies that supply the weapons used in military conflicts.
So, I did a little digging and uncovered a fascinating aerospace/defense penny stock that could soar in any such rally. The name of the company is Micronet Enertec Technologies (NASDAQ: MICT).
Micronet Enertech Technologies is a US company that operates through two Israel-based companies, Enertec Systems 2001 and Micronet.
Micronet does business in the mobile resource management market. It makes rugged mobile computing devices that provide fleet operators with visibility into vehicle location, fuel usage, speed, and mileage. Micronet has customers in 20 countries, but does most of its business (92%) in the US.
Enertec operates in the aerospace and defense markets.
It makes customized military computer-based systems, simulators, automatic test equipment, and electronic instruments. The company’s products are integrated into critical systems like command and control, missile fire control, and maintenance of military aircraft and missiles.
Its customers are leading defense system integrators in Israel.
Whatever your politics might be, one thing you can’t deny is that Micronet Enertech Technologies is growing rapidly. Check out these numbers from the company’s recent second quarter financials.
Revenue surged 213% year-over-year to $18.1 million thanks to the acquisition of Micronet last year. And non-GAAP net income increased 49% to $372,000.
The one minor disappointment was that non-GAAP earnings declined by a penny to $0.07 due to an increased share count.
With that said, it looks like the company is already on its way to greater profitability.
Management announced a new $3.3 million contract to produce the fire control computer for the newest version of an advanced missile defense system. It sounds like management is referring to Israel’s famous “Iron Dome” missile defense system.
And this order is just the beginning. The company expects follow-on orders in late 2013 and in the next two to three years.
It’s not often you find a penny stock that’s growing revenues so fast while still investing heavily in research and development. And there certainly aren’t a large number of penny stocks posting quarterly profits.
The bottom line…
If war does break out in the Middle East, MICT shares should rise as part of a larger rally in aerospace and defense stocks. As I write, the stock is posting a 3.7% intraday gain and changing hands at $5.55 per share. Take a closer look at MICT for your own portfolio.
Profitably Yours,
Robert Morris
Category: Penny Stocks
