Astrotech (NASDAQ:ASTC)

Excerpt From GeoBargain & GeoSpecial Review article, November 17, 2009.

Astrotech Corp (NASDAQ:ASTC) Closing Price Nov. 16, 2009: $1.75

• Added to the GeoSpecial List on Oct. 29, 2009 at $2.18.
• Reached a high of $2.49 on Nov. 11, 2009, an increase of 14% since placement on the list.

We actually took note of Astrotech on May 13, 2009, but passed on it based on our view that its impressive third quarter results could be an aberration. Well, on September 28, 2009 the Company reported strong fourth quarter results as well, albeit down sequentially from the third quarter. See release.

Astrotech also just reported first quarter results, which although up compared to last year’s quarter, was significantly down on a sequential basis. Although quarterly fluctuations remains an issue with Astrotech, the Company still seems optimistic about the future, giving us reason to continue tracking its story.

We are hoping a strong year end backlog of $25.4 million will bode well for 2010. The Company has indicated that it expects to fill $21.4 million of this backlog in 2010. Using last year as a guide, Astrotech began its 2009 fiscal year with an expected backlog of $18 million and ended up reporting sales of around $32 million. (Please note that this trend has not always existed).

A major concern of ours is the Company’s heavy reliance on space shuttle launches. To address this, it seems that Astrotech is taking initiatives to diversify the applications of its technology. Furthermore, the Company has engaged the investment banking firm Lazard Ltd. for advisement in exploring strategic financial and business alternatives to enhance shareholder value.

“The range of alternatives which may be considered could include strategic acquisitions, a sale of some or all of the Company’s assets or a variety of other possible transactions.”

With a book value of $2.28, investors may look at ASTC as low risk play, especially now that it is exploring strategic alternatives.