This Small-Cap Stock Is Worth 10x Its Share Price Right Now

VSEC could be the biggest discount on the market today…

Anyone who owns a car knows that the investment only begins at the point of purchase. There’s gas, maintenance, insurance, and a lot of time and labor that goes into vehicle ownership.

Multiply all that by a few hundred (or a few thousand) vehicles, and you get an idea of what a big task “fleet management” is.

Now, instead of personal vehicles, substitute some of the biggest, most advanced, and most mission-critical vehicles on the planet. That’s what the company I’m showing you today is responsible for.

Plus, this pick is severely undervalued right now. By at least one metric, it’s worth 10 times its current share price.

And that’s before you factor in the growth of the industry.

Thanks in large part to the shifting landscape of transportation – including self-driving and remote-controlled vehicles, GPS systems, and electronic logging devices – researchers at FleetCarma project the fleet management market will double between 2017 and 2022.

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That’s going to be a major boost for a company that is already a top defense contractor and federal services provider. And with its sub-$400 million market cap, it has room to absolutely soar.

In other words, this could be a true rocket stock in your portfolio if you grab it now.

For Mission-Critical Fleet Management, This Company Is Second to None

VSE Corp. (NASDAQ: VSEC) was founded in 1959 to provide technical services for transportation equipment and fleets, particularly those of a large size like ships and aircraft.

Today the company has over 2,300 employees in eight countries. In addition to defense contracting and federal services, VSE also provides supply chain management and aviation services like maintenance, repair, and overhaul.

There are plenty of fleet management and supply chain companies out there. But VSE is a go-to option for large and specialized vehicles in mission-critical settings, where the consequences of failure go far beyond an organization’s bottom line.

VSE is one of the top 50 contractors for the Navy. Right now, it holds two contracts with the Navy. It also holds four with the Army, one with the Air Force, and two with the Department of Justice.

The company serves the military in other ways too.

About a third of VSE employees have a military background, and 25% of those are disabled veterans. The company has received a number of awards for its relationship with veterans, including most recently the U.S. Department of Labor’s HIRE Vets Medallion Program Demonstration Award.

One reason for VSE’s continued success is its strategic acquisitions over the years. That includes Pennsylvania-based Wheeler Bros. Inc., acquired in 2011, a major parts distributor for the Postal Service and the Department of Defense.

Then there’s Prime Turbines in Massachusetts, which joined the VSE Aviation team in 2015. Since then, it’s been honored with the Federal Aviation Administration’s “Diamond Award” for excellence.

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And just last month, VSE acquired 1st Choice Aerospace for $112 million. 1st Choice is a 200-employee maintenance, repair, and overhaul company with a dominant presence in the major aviation hubs of Florida and Kentucky.

Put simply, this is a solid, well-managed company providing absolute must-have products and services in some of the most strategic areas of the country and beyond.

But even better is the bargain price it’s available at right now…

VSEC Could Be the Biggest Discount on the Market Today

VSE’s stock price was hurt in 2018. Though it has rebounded somewhat in recent months, the stock is still down about 36% over the last 12 months. But the fundamentals overall have remained solid.

Net income for the nine months ending in September was $25.8 million, up 19% from the same period the year before.

That strength, in the face of skittishness from investors, has made this one of the best values you can find on the market. VSE’s valuation metrics confirm this almost unanimously.

Its price/earnings (P/E) ratio over the last 12 months, for example, comes in at 7.66, 66% below the industry average.

VSE’s price-to-sales ratio is an even more stunning at just 24% of the industry average.

And its price-to-book ratio sits at 1.03, more than 90% below the industry average of 10.69.

In other words, grab this stock now, and you could be looking at multiplying your money 10 times over.

And that’s just its fair value now. As the next generation of vehicles find their way into federal, defense, and aviation fleets, this is the company that’s going to be keeping them in top form.

So whether you pocket the short-term gains or stick around for the long haul, your portfolio will be in great shape with this overlooked gem in it.

Full story at Money Morning