Thomas Su Investment Diary 7 Apr

April 7, 2009 - PRLog -- The US market was playing some Cat & Mouse, it was down around 140 points but then it rallied again, the market finally closed down about 40 points - so they should anyway - this kind of ever climbing make me feel nervous of overheating and over-optimistic - maybe I am too conservative?

One sector has performed exceptionally well is the Aerospace and Defence sector which went up by 3.6%, this is a sector that I have always followed from personal interest point of view - as I used to be so interested in military and defence technologies - it is not just guns, plans and tanks - in fact, a lot of good companies in that sector are engaged in projects like communication satellites, signals, detection systems. In this category, some of the well known companies are Boeing, Lockeed Martin, Northtop, General Dynamics and Raytheon - this sector is an interesting sector that tend to be quite cyclical sometimes - coinciding with government's programs to replace existing systems.

In Australia - we have very few stocks relating to Aerospace and Defence - with 2 exceptions, and they are both good quality companies. Adacel Technologies (ADA) - a global leaer in airport simulation training systems, and has been used by a large number of airports in US and Asia for training purposes. Small company based in Melbourne, but it has global technology alliances with a number of major aerospace companies.

In Western Australia, Austral is a global recognized ship-building company and it has performed very well - it has been manufacturing state-of-art luxury yacht as well as modern patrol boats or light class military ships, including exporting to US and Middle East markets.

I like both companies - Austral has big potential orders, however, the shipbuilding industry is exposed to several factors, and sometimes this can result in delays in deliveries.

Adacel on the other hand, the model is very similar to software model - where you supply the entire system first and then also generate revenues from recurring & ongoing training and supports.

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