10 Worst Aerospace Stocks To Buy According to Short Sellers

6. VSE Corporation (NASDAQ:VSEC)

Short % of Float: 7.68%

Number of Hedge Fund Holders: 14

VSE Corporation (NASDAQ:VSE) provides aftermarket maintenance and distribution, repair, and overhaul (MRO) services for government and commercial markets for air and land transportation assets. Its Aviation segment provides MRO services and aftermarket parts distribution and engine accessories that support business, commercial, and general aviation operators. It also offers an array of services to an elaborate global client base comprising MRO integrators and providers, commercial airlines, regional airlines, aviation manufacturers, cargo transporters, corporate and private aircraft owners, and fixed-based operators.

The company’s Aviation Commerical market is seeing positive results. Global airline passenger traffic is on the path to recovery, returning to, and in many cases even exceeding, record prepandemic levels. Revenue passenger miles for 2024 are expected to be around 4% higher than 2019 levels, with a continental annual increase expected over the next decade. Its global in-service fleet is also expected to expand by around 3% annually to accommodate increasing passenger demand.

The company is scaling its new European distribution Center of Excellence in Hamburg, Germany, which was launched earlier in 2024. The Center presently supports its Pratt & Whitney Canada aftermarket program, and will support additional distribution products, including tires, batteries, and tubes, from its Desser acquisition later in 2024. In addition, the company’s launch of the new OEM-licensed Fuel Control Manufacturing program is exceeding early expectations, supporting segment profitability. Its Kansas facility expansion is set to support the manufacturing of this new product line and will be operational by the end of 2024.

VSE Corp (NASDAQ:VSE) is thus running on a strong operational model. It is building a core competency in acquisition integration, with its Desser acquisition expected to be completed in the coming months. This integration will be supported by its new e-commerce site that will also support all Aviation and legacy Desser customers. The new VSE Aviation site is expected to be launched in Q3 2024. The company’s recent acquisition of Turbine Controls is also exceeding initial expectations. VSE Corp’s initial focus for this business is to add capacity and increase its scope with existing engine OEM partners.