Cubic, based in San Diego, operates primarily in two segments. One provides realistic combat training systems, and the other focuses on designing and manufacturing automated fare-collection systems for public mass-transit authorities. Perhaps it's not the most intuitive way to diversify a business, but why argue? The company has an alluring price-to-sales ratio of 0.83 and more cash than debt.
From simulating warfare ...
Fourteen of Cubic's employees, subcontractors, and former employees are being recognized with the II Marine Expeditionary Force Command Element for their training involvement in 2004 and 2005. Over the past decade, Cubic's methods have evolved from computer-based simulations to live, virtual, and constructive training, which is now capable of commingling units from different branches of service. For example, Marines operating computers in North Carolina recently linked up with Air Force personnel operating a gunship simulator in Florida. Its training scenarios cover both combat and humanitarian operations, preparing troops for terrorists and tsunamis alike.
Cubic received a $10.6 million contract to produce training modules for the Javelin, which Raytheon
... To collecting city bus fares
In its transportation segment, Cubic received an $18.9 million contract to refurbish and upgrade the fare collection system for the San Francisco Municipal Railway, which uses the same equipment Cubic designed and delivered back in 1991.
Overall, it was a momentous week for Cubic. For those new to the company, it incorporated in 1949, pays a small dividend, supports our servicemen and women, and traded at around 16 times expected 2009 earnings per share. Keep it on the radar.