VSE Corporation (VSEC): A Bull Case Theory

We came across a bullish thesis on VSE Corporation on Polymath Investor's Substack. In this article, we will summarize the bulls’ thesis on VSEC. VSE Corporation's share was trading at $135.78 as of 18^th June. VSEC’s trailing and forward P/E were 57.78 and 43.29 respectively according to Yahoo Finance.

The real story behind this company’s transformation lies in its rapidly growing Aviation segment, which posted a 48% year-over-year revenue increase in Q4 with record-level profitability. Despite this stellar performance, consolidated EPS declined in 2024, masking the strength of the core business.

This disconnect stems from legacy segments weighing down overall results. However, the company has taken decisive steps to streamline operations—spinning off its federal services division and selling the underperforming Fleet segment for $230 million in April. These moves have effectively repositioned the company as a focused aviation distributor with accelerating earnings power. Core earnings grew more than 40% last year, and the proceeds from the Fleet divestiture alone represent a significant portion of the company’s current market capitalization.

This suggests that the remaining Aviation business is being significantly undervalued by the market. While there are risks—such as the challenges of integrating recent acquisitions and the company’s exposure to cyclical airline spending—the structural shifts and divestitures have created a cleaner, more profitable entity. As of Q1 2025, the Aviation segment has continued its strong trajectory, pointing to sustained momentum.

With core growth, operational focus, and balance sheet flexibility from asset sales, the investment case centers on a mispriced, high-growth aviation platform with room for multiple expansion. The combination of recent divestitures, record segment profitability, and a simplified structure provides a compelling setup for investors seeking exposure to aviation tailwinds with an improving risk/reward profile.

Previously we covered a bullish thesis on ContextLogic Inc. (LOGC) by Polymath Investor in May 2025, which highlighted the company’s transformation into a cash-rich shell with over $2.8 billion in NOLs and its strategic partnership with BC Partners to acquire profitable businesses. The company's stock price has appreciated approximately by 8.8% since our coverage. This is because the thesis partially played out with improved balance sheet strength but pending acquisition execution. The thesis still stands as LOGC continues to hold significant unpriced optionality in its NOL assets. Polymath Investor shares a similar approach in his VSE Corporation thesis but emphasizes on an operating business transformation driven by divestitures and high-margin aviation growth instead of a shell-to-platform strategy.

VSE Corporation is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 19 hedge fund portfolios held VSEC at the end of the first quarter which was 17 in the previous quarter. While we acknowledge the risk and potential of VSEC as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

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