70c valuation/strong buy, page-26

re: another small maxsim contract JMW,
There is no doubt that this stock is tightly held (mostly by the CEO and by Thorney), and obviously it is difficult to move in and out quickly if you are placing larger orders (I usually break my orders into 50k parcels).

You are quite wrong about the market being saturated with ADA's MaxSim product. In fact the high-fidelity,270 degree, ATC sim market is relatively new (about 4 years old) and rapidly expanding.

A few months ago, the FAA in the US published a report about how it is going to train 12500 new air traffic controlers by 2010. Their answer was to follow the lead of the USAF and place a heavy emphasis on new high-fidelity ATC simulators (of the kind that ADA is the market leader). In the report, the FAA proposed placing an ATC simulator in every major airport tower/field facility in the US. This could add up to around 100 simulators. Given that the FAA has delt exclusively with Adacel to date, I'm betting that Adacel is the clear front runner for this contract.

And where the US military and civilian aviation authorities lead, the rest of the world tends to follow. If the USAF/FAA model is taken up in other countries, demand for ATC simulators will grow subtantially over the next few years. I think the recent run of sim contracts indicates that we are at the start of a new growth period.

You are also wrong about ADA not introducing new products. Just last year, ADA introduced three new products. (1) The ARTT radar simulator, (2) The ARTT tower simulator, and (3) The ARTT ground-transport simulator. I understand that first ARTT sales began quite recently and are expected to grow substantially over the next 2 years.