American Science and Engineering (ASEI) creates technology to scan cargo and cars for bombs. Mark Travis, chief investment officer of Intrepid Capital Funds, said the company has a clean balance sheet and would be a great acquisition for larger defense contractor.

"With the increase in concerns about terrorism, the demand for security measures has risen," said Travis. "American Science and Engineering is a leader in the space and even supplied the technology to protect the Pope."

Shares of American Science and Engineering are down 30% so far this year, primarily due to a big move down following a third-quarter loss in February. The company has a 7.1% dividend yield.

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Travis' Intrepid Capital Fund (ICMBX) - Get Intrepid Capital Fund Inv Report is up 2.3% thus far in 2016, according to fund-tracker Morningstar. The $290 million fund has returned an average of 6.8% annually over the past decade, outpacing 94% of its peers in Morningstar's moderate allocation category.

Travis is also bullish on Patterson-UTI Energy (PTEN) - Get Patterson-UTI Energy, Inc. Report , which has seen its shares jump 21% year to date. Patterson owns high-horsepower drilling rigs that are used in horizontal drilling, and it also owns a pumping business. Travis said the recovery in value of its rigs and pumping business points to a higher share price ahead.

"This is also an asset valuation breakup play, because if you liquidate the company today, the value is more than where it currently trades in the market," said Travis.

Finally, Travis is a fan of Cubic (CUB) - Get Cubic Corporation Report , which is down 13% thus far in 2016. The ticketing provider for the London, New York, Chicago and Vancouver subway systems has an attractive balance sheet, Travis says.

"They overpaid for some recent acquisitions, and that has hurt the stock," said Travis. "But the ticketing business is consistent and the valuation is still cheap."