Wall Street catches up with CPI Aero of Edgewood

CPI Aero Inc., one of Long Island's few remaining manufacturers of parts for military and commercial airplanes, is finally getting some respect - both on Wall Street and in the aviation industry.

The Edgewood-based company has gone virtually unnoticed for most of the 30 years it has been in business, at least by Wall Street. But in the last few months, four Street investment-banking firms have initiated coverage of CPI, with three of them issuing a "buy" rating on the company, which is a subcontractor to such industry stalwarts as Boeing, Northrop Grumman Corp. and Sikorsky Aircraft.

CPI shares have skyrocketed this year. They traded at $5.88 at the beginning of 2010, and topped $14 just last week.

To top things off, CPI on Wednesday will receive a Gold Supplier award from Sikorsky - one of only 10 such awards Sikorsky has ever handed out in its base of 650 suppliers worldwide, according to a Sikorsky spokesman.

"Wall Street finally got it," said Edward Fred, CPI's chief executive, who had been traveling across the country for several years explaining the company's story.

Marco Rodriguez, who follows CPI for Stonegate Securities in Dallas, said three contracts the company won back in 2008 attracted the Street's attention.

CPI won an eight-year contract to build wing panels for Northrop Grumman's Navy E-2D maritime patrol aircraft, a deal worth about $98 million; it won an estimated $71 million deal to make wings for the Air Force's A-10 tank-buster airplane, and a $47 million contract to build wing leading edges for Gulfstream's G650 corporate jet. That's more than $200 million in contracts in a single year.

"For the first time in the country's history, it has long-term revenue visibility," Rodriguez wrote in a report. His firm does not issue ratings on stocks, but Roth Capital, Capstone Investments and Sidoti & Co. all have "buys" on CPI.

Fred said CPI expects to reach $50 million in sales this year, $78 to $80 million next year, and $88 million to $91 million in 2012.

The company has about 107 employees, up from under 50 a few years ago. "We're hitting our projections just as I said we would," Fred said.