Adacel Technologies Limited (ASX: ADA) has seen its share price rocket up 768% to trade around $2.17 since the start of this year, making some of its shareholders very rich indeed.
Motley Fool contributor Matt Brazier listed Adacel as his latest investment back in June 2015. Since then the share price is up 266%.
Adacel sells air traffic control systems and air traffic control (ATC) simulators as well as voice recognition software that can be used to speak directly to aircraft, and replace human controllers during training.
The company has obviously had an outstanding year with a number of accomplishments pushing the share price higher…
- In February, Adacel reported a 54.2% increase in half-year net profit
- In April, the company signed new long-term contracts with partners the US Federal Aviation Administration (FAA) and the US Air Force (USAF). The FAA contract was worth US$46 million over 5 years if all options exercised.
- A new contract to supply a simulator for the Trinidad and Tobago Civil Aviation Authority.
- A contract with the Directorate of Air Navigation Services for France (DSNA) for a new air traffic management system for Cayenne, French Guiana. It's the first in a series planned by the DSNA for overseas territories.
- Acquisition of Computer Sciences Corporation NexSim ATC simulator business.
- Two contracts awarded by the Royal Australian Air Force (RAAF) value at more than $2.5 million.
- Three profit upgrades, including the forecast of a 50% increase in profit before tax (PBT) for the 2016 financial year, with dividends likely to jump.
It's clearly been a dream run for shareholders who have held on, and there could be more to come.
Foolish takeaway
No wonder the company is currently trading on a trailing P/E ratio of around 43x. But if PBT is increasing at 50% this financial year, that P/E ratio will likely drop to around 28.6x – a not-unreasonable price for a company with such high growth and future potential. I know I've got Adacel on my watchlist.
