Patrick HoranMagellan AerospaceMAL.TOBUYApr 25, 2014

Our PAST TOP PICK with MAL has achieved its target at $29.  To remain disciplined, we recommend covering half the position at this time and trailing up the stop (from $20) to $22.  

We reiterate MAL as a TOP PICK.  Recently reported earnings demonstrated growing cash reserves, while debt was retired and shares bought back.  Purchasers of their airplane components have large backlog orders from 2025 leftover and spending on defense aviation is expected to grow.  We recommend trailing up the stop (from $18) to $20, looking to achieve $29 -- upside potential of 20%.  Yield 0.8%  

We reiterate MAL as a TOP PICK.  As a Canadian based aerospace developer the recent Federal government military spending plans will be positive.  It trades at 25x earnings and under 2x book.  Latest reported cash reserves are growing, while debt is retired and shares bought back.  We continue to recommend a stop at $18.00, looking to achieve $25.50 -- upside potential over 15%.  Yield 0.9% 

Our PAST TOP PICK with MAL has achieved its target at $22.  To remain disciplined, we recommend covering half the position at this time and trailing up the stop (from $15.50) to $18.00.  

We reiterate MAL, the Canadian based aerospace company with global market reach as a TOP PICK.  Just over one-third of revenue is derived from defense spending.  They are providing key engine components for South Korea and are involved with the Gripen fighter that Canadian is considering for purchase.   It trades at 27x earnings and 1.3x book.  Previously reported earnings showed good cash reserve growth, while they retired debt and bought back shares.  We recommend trailing up the stop (from $13.00) to $15.50, looking to achieve $22.00 -- upside potential of 23%.  Yield 1.1%   

We reiterate MAL as a TOP PICK.  Recently reported earnings showed a 17% increase in EPS and a 25% increase in gross profits.  The aerospace parts maker relies on the US for less than 25% of its revenues with the balance primarily in Canada and the rest in Europe (military/defense accounts for about a third of revenues).  It trades at 24x earnings and 1.1x book.  Cash reserves are growing, as debt is retired and shares bought back.  We continue to recommend a stop at $13, looking to achieve $21 -- upside potential over 30%.  Yield 0%  

This Canadian aerospace manufacturing company has formed broad agreements recently with India and Korea.  Recently reported earnings showed a 70% increase in quarterly income, allowing cash reserves to grow while debt was retired and shares bought back.  It trades at 24x earnings and 1.2x book.  Its dividend is backed by a payout ratio under 20% of cash flow.  We recommend setting a stop-loss at $13, looking to achieve $21 -- upside over 22%.  Yield 1.1%