Thread by @hareng_rouge

Would like to give a v general overview of a company you may not know - called : I think it may be about to be in the right place at the right time, may have a catalyst and may currently have a hidden inflection. If those turn out to be true, it hasn't been picked up on yet

I've had to study IRL what does - essentially it makes components for satellites that allows them to locate themselves (via GPS/time or inertial reference)

90% of revs are from the US Fed'l military spending. Space is the next contested arena. Contract flow is V strong

That's the right place / right time part.

The missile at the top is the catalyst - it's a Minuteman III, the ageing US land based ICBM. Northrop Grumman just won the contract to develop the replacement: $13B, rising to $85B and in reality it will be more.

Frequency Electronics, , is a $90M cap that in 2019 did ~10% of their $40M revs w/ . From the most recent call, they confirm the parts go into missiles too - and from the specs, they are clearly designed for GPS-denied, hi-vibration environments. Fair odds they win this?

That's the idea for the catalyst (if as I assume, they feature) and I'll limit myself to 2 parts of the call for the hidden inflection side.

First, and least important, is that a couple of problem contracts - over / soon to be over - are said to be masking current profitability.

Second is that both backlog and revenue are increasing together, the company refer to the significance of this in their PR and call - given the nature of these programmes, these could be indicative of a meaningful future inflection in conjunction with the newsflow above.

Bonus tweet: extremely clear and informative explanation on federal funded / unfunded backlog and how that works.

It's an interesting setup, I may be joining dots that aren't there but to me they're certainly suggestive of something potentially interesting underneath the surface