The spirit of my newsletter is to suggest buy-and-hold stocks for you to consider owning for the long term, asserts Michael Brush, a long-standing investment expert, a long-standing financial expert, a columnist for Marketwatch and the editor of Brush Up on Stocks.

In navigation systems used by satellites and spacecraft, extremely precise atomic clocks and frequency generation technology is a must.

This little company — Frequency Electronics (FEIM) — is one of the leaders in precision time and frequency generation technology. So as NASA, other countries, and Elon Musk ramp up exploration of Mars and the moon, demand for FEIM products also go up.

FEIM products also have defense sector applications, private sector satellite and space exploration applications, and non-space applications. The company’s products are most often used in satellite payloads and secure command control and communications systems.

This is a spy vs. spy play. “Recently identified threats to the communication capabilities of U.S. government facilities through jamming, multi-path or ‘spoofing’ global positioning systems signals may be mitigated by the company’s technologies. Similar types of threats to the public and enterprise networks have been identified by the U.S. Department of Homeland Security,” says FEIM.

The company says it has “made a strategic decision to focus on satellite payloads, C4ISR and electronic warfare segments, because these business areas represent significant opportunities for revenue growth.”

Getting back to satellites, there are about 2,000 of them in earth’s orbit. The U.S. government operates about 800 of these. And the number is going to grow, which will help FEIM.

“The number of operational satellites with emphasis on high-throughput is expected to continue to grow over the next ten years as demand for higher bandwidths and improved anti-jam-anti-spoofing increases,” says FEIM.

“The U.S. government is expected to contract for additional GPS III satellites, and the company is well positioned to compete for the onboard clock ensemble with its high-precision digital Rubidium atomic frequency standard.”

For the quarter ended January 31, 2021 and the trailing nine months, the company posted sales of $11.7 million and $38.6 million, compared to $9.6 million and $31.3 million for the same periods a year before. The backlog as of January 31, 2021 was $41 million compared to $36 million at April 30, 2020.

“US government investments in new space programs are producing an increasing number of opportunities for Frequency Electronics, resulting in growing backlog and improving revenues,” says CEO Stan Sloane.

Continuing on the spy vs. spy theme, the company has a strategic investment in Morion, a Russian crystal oscillator manufacturer in St. Petersburg. It has also licensed technology to them. The relationship permits the company to secure a cost-effective source of high precision quartz resonators and crystal oscillators. FEIM owns 4.6% of Morion stock.

Tactics: A smart buyer here purchased at $11.45 to $11.92, the buy limit range. I put this in the “must own” category. I am introducing this as a new stock with suggested purchases at current levels (way below the buy limit range, above). (For disclosure, Michael Brush owns shares of Frequency Electronics.)

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