RAE is a homeland security play that makes chemical and radiation detection devices. I like the fact that they are committed to help secure ports and willing to grow in China. Due to the purchase of KLH their sales in China have grown from 8 to 30%. The demographics for defense budgeting and homeland security look very positive. Most recently Bush is pushing for a large increase in defense and homeland security spending, $2.77 trillion budget plan for 2007. They are reporting earnings on May 9th; the street is looking for breakeven on the EPS. The stock has been enduring a consolidation phase since the summer of 05. I would look for an entry in the range 3.70-3.80 with a possible stop around 3.58 200DMA. The stock had a nice little move on Thursday from 3.55 to 3.76 and sold off on Friday to close at the highs. Yet there is some indecision here especially prior to earnings. You might need to be patient with this company but I see it trading higher 4.50-5 target going forward.
$3.95 (06/20/06)
