Mercury Systems looking like a Buy after underperformance, Barron’s says

Everyone goes through growing pains, and defense contractor Mercury Systems is suffering from them in a big way, Nicholas Jasinski writes in this week’s edition of Barron’s. Now a new CEO has the chance to help the struggling company mature into what management-and investors-always envisioned. Where it once specialized in simpler circuits, switches, and sensors, Mercury Systems has been moving up the value chain from components to entire subsystems-a transition that requires spending billions on mergers and acquisitions and research and development. Mercury’s stock has tumbled from a closing high of $92.80 in April 2020 to $44.74 at the end of 2022, before slumping to $31.50 in June after the company announced that an attempt to sell itself, begun at the behest of activist investors Starboard Value and Jana Partners, would end without a deal, the publication notes. Now, The key to the turnaround will be getting troubled programs back on track.