Spartan Motors ( SPAR - Get Report) is back in gear. After sliding for weeks, Spartan's stock rose 3% Friday after the company fielded a new order to supply chassis for Mine-Resistant Ambush-Protected vehicles. Spartan will pocket $28 million under a deal inked with heavyweight defense contractor General Dynamics ( GD - Get Report). "This award is validation of Spartan's expertise in automotive integration and our ability to deliver a quality product on time," boasted Richard Schalter, president of Spartan Chassis. "These vehicles have been called the highest priority for the U.S. military because of the unmatched level of troop safety they provide. And we are honored to be among the suppliers committed to providing products that safeguard the lives of our servicemen and women." Spartan is probably a bit relieved as well. The good news reversed a sharp selloff that has virtually cut the company's stock in half over the course of the summer. Notably, Spartan relies heavily on business from Force Protection ( FRPT - Get Report) -- a leading supplier of military vehicles -- which continues to wait on big, new MRAP orders that have so far yet to come through. "The stock has taken an absolute drubbing over the last month based on fears about Spartan's military customers' disappointing showing in the MRAP sweepstakes so far," Next Generation analyst Ned Borland noted last week. But "we would remind investors that Spartan has already made significant capacity additions in this business and is undertaking even more expansion, which suggests continued confidence by management that Spartan will remain involved in this business over the next several years and will be producing at much larger volumes" than the company has in the past. Thus, Borland declared the stock's recent selloff "overdone" and reiterated his buy recommendation on Spartan shares. He believes that the stock is still worth the $25 a share it fetched at its peak two months ago. Dougherty analyst Joe Maxa has strong faith in Spartan as well. Just last week, in fact, Maxa predicted that a new order from General Dynamics could soon be on the way. Max has a buy recommendation and a $20 price target on Spartan's stock. His firm makes a market in the company's securities. Meanwhile, Robins Group analyst Frank Magdlen recently upgraded Spartan from buy to strong buy in anticipation of new military orders that could reignite the company's stock. He reminded investors last week that Spartan had just reported its strongest second quarter ever -- despite shortfalls that hammered the company's stock -- and predicted that "rational minds (would) prevail" in the end. "We believe that Spartan will receive a significant portion of current and future MRAP orders," Magdlen stated in his upgrade. "Why else would the company be expanding productive capacity?" However, he added, "we expect the stock to experience some volatility until there is better visibility of funding by
the Department of Defense and orders are let." Magdlen's own firm is going along for that ride. It has a significant long position in the company's securities itself.