70c valuation/strong buy, page-10

70c valuation/strong buy Re the first post on this threadt:

One of the key assumptions behind my projections for FY07 and beyond is that Adacel's close relationship with Lockheed Martin will continue. A few years ago, Lockheed Martin chose Adacel to write the most difficult software for the ATOP programme, and have recently again chosen Adacel to provide the voice control technology for the Joint Strike Fighter (JSF).

Fortunately for Adacel, Lockheed Martin are also primary manufacturers of a significant proportion of existing military aircraft (e.g the F-16, F/A-22, F-117, C-5, C-130, C-130J, P-3, S-3, U-2, and (recently) the US101 presidential helicopter, etc etc), and I'm betting that over the next 5 years Lockheed Martin (via various national air forces) will hand Adacel significant retrofit business for upgrading existing fleets of LM aircraft to meet new voice control specifications.

Lockheed Martin are also involved in the development of next generation UAV's (unmanned aerial vehicles). UAV's are heavily reliant on voice control technology, but, surprisingly, very few companies/institutions can provide this technology to demanding military specifications. As far as I'm aware, there are only three: Smiths (UK), MIT, and Adacel. Thus, given that LM have already chosen Adacel to provide voice control technology for the JSF, I'm also betting that LM will tap Adacel to be involved in their UAV programme.

UAV development is a high priority for all of the US defence forces, and the US govt is expected to spend US$20billion+ over the next few years on this development. The potential for Adacel in this area is very significant and not yet appreciated by the market.