By Calvin Biesecker

Axsys Technologies [AXYS] on Wednesday confirmed it is mulling a possible sale of the company due to a drop in its stock price and subsequent interest in an acquisition by strategic buyers.

After peaking near $74 per share last August, Axsys’ stock price bottomed out earlier this month at just under $25 per share. Since then, the share price has advanced aggressively in short order, climbing to $40.80 at yesterday’s close, up $4.53 or over 12 percent on Thursday.

Despite the precipitous decline in Axsys’ stock price in the latter half of 2008, the company’s finances are sound. Sales increased 43 percent last year to $245.5 million and net income soared 54 percent to $25.9 million.

“The company’s enviable balance sheet, growth prospects, and market presence, which make Axsys an attractive acquisition candidate, also positions Axsys as an effective stand- alone company,” Axsys said in a statement on Tuesday evening.

Morgan Keegan security analyst Brian Ruttenbur believes Axsys is well positioned in growth areas of the defense market, intelligence, surveillance and reconnaissance. He thinks the company can fetch between $37.60 and $71.45 per share depending on the savings that can be attained by an acquirer that is a large defense prime contractor.

Axsys develops and produces electro-optic and infrared cameras and systems, integrated optical systems and components, and motion control products. The company’s customers are in the aerospace, defense, homeland security and commercial markets. Axsys’ competitors include FLIR Systems [FLIR] and ICx Technologies [ICXT].

To help formalize the process of a possible sale Axsys has retained the investment banking firm Jefferies & Co.