KVH: "Big Growth Potential"

In a recent article on KipLinger.com, KVH is recognized as a company that is about to make big moves!

"Next on my list is KVH Industries (KVHI), a small company with big growth potential. At its November 6 price of $11, the stock’s market capitalization was just $154 million.

KVH has three main businesses. First, it provides TV and Internet service to recreational vehicles and pleasure boats. In the first quarter of 2009, sales in its land mobile products segment plunged 77% from the year-earlier quarter. There are signs, though, that that business is bottoming.

More promising is KVH’s role as a leading supplier of fiber-optic gyroscopes (FOGs) to the military. FOGs allow gunners in assault vehicles to stay beneath the turret while aiming their .50-caliber weapons with sniper-like accuracy. That helps cut down on casualties stemming from roadside bombings. KVH chief executive Martin Kits van Heyningen thinks his firm could win a contract to provide all of the FOGs for a program that authorizes construction of 19,500 new enhanced combat vehicles, a deal that would be worth $175 million.

Another important driver of growth is KVH’s TracPhone V7 broadband systems for commercial ships. The company has sold more than 500 systems, but the potential market is 100,000 vessels. More important is that KVH also provides broadband service, which means recurring revenues. By the first quarter of 2010, KVH will offer ships global coverage. Aaron Edelheit, who runs a Los Angeles-based hedge fund, says that if KVH “gets 5,000 ships, this is a $40 to $60 stock.” ~ Andrew Feinberg