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The Kenyans will win the Falmouth Road Race this weekend. They are great men.
King Arthur, George Washington, Winston Churchill, and Franklin Roosevelt were men of history who share something in common…they were all great men. However, none of these men even hold a candle to Ric Flair, whose lifetime accomplishments dwarf those of the aforementioned historical figures.
Winston Churchill, so often quoted, could never have come up with something like this:
“A kiss stealing, wheeling dealing, jet flying, limosine riding, son of a gun.”
“To be the man, you have to beat the man. Woooooooooo!”
Yes great men come and great men go, but no one has yet to walk that aisle with the Nature Boy:
So when it comes to picking stocks, there was no wonder that Flir Systems Inc (FLIR) grabbed my immediate attention like a Figure 4 leglock. Now it’s time to go to school. Woooooooooooooo!
Today I bought FLIR at 62.55. I will sell it in 4 to 6 weeks at 72.17. Here’s why I like FLIR:
FLIR’s stock is up 138% over the last 12 months, versus the market’s return of only 12%. No small feat when you see that the overall market has basically languished over the same period. What’s even nicer is the way in which its price momentum has sustained itself. It’s 3 month, 6 month and 12 month r^2 values are: 0.85, .86 and 0.91, respectively. This means that through thick and thin, FLIR’s stock price has ripped through the overall countercurrents.
Statistically speaking, a stock’s price change over the past year proves to be a good indicator for its performance over the subsequent six month period. The trend price for FLIR is projected to increase 36.1%, which is more favorable than 99.8% of all covered stocks. The average trend price change for all covered stocks is 1.1%
You can extend this analysis by looking at the current price of FLIR vs. its projected price 3 months ahead. A stock’s projected price is determined by the change in its trend price and its position in its price channel. FLIR is currently trading 33.5% below its projected price of $95.67, which makes it more attractive than 94.9% of all covered stocks on this measure.
FLIR designs, manufactures and markets thermal imaging and broadcast camera systems for use in commercial and government markets. That means that the good guys can watch what the bad guys are doing during the day, and at night. FLIR makes cameras that work in the dark, in haze, and even in rooms choked with smoke. They read infrared radiation and are not affected by ambient light. Remember in “Terminator 2” when Aaahnold was looking for someone’s clothes to wear and his infrared goggles said, “Endomorph”? I think FLIR’s stuff works kind of like that.
Terrorism, vandalism, and random violence threaten the safety of personnel and the integrity of public and private facilities around the world. ThermoVision Centurion imagers provide a key piece to any comprehensive security program, capturing clear, high-contrast scene detail undetectable by any other sensor technology. FLIR makes this ThermoVision stuff and about 100 other products like it. Lots of people are afraid of the bad guys. $$$MR. MARKET$$$ isn’t because I can snap them all in half. However, it never hurts to know where they are or what they are doing when you’re out at the Ivy Inn drinking 1,000 beers. Big companies are buying these things up like hotcakes to prevent their buildings from getting blown up. Good idea.
The imaging division (62% of 2003 revenues) manufactures systems that typically provide the capability to see and record an object over long distances, day or night, through adverse weather conditions, from a wide variety of vehicle, man portable and fixed installation platforms. The design and production of thermal imaging systems involves highly sophisticated mechanical engineering techniques. Imaging products include Star SAFIRE, a focal plane array, high resolution thermal imaging system used for search and rescue, surveillance and reconnaissance, border and maritime patrol and environmental monitoring applications; and SAFIRE, a digital airborne system with a high performance scanned infrared camera; and ULTRA series, airborne, dual gimbal-mounted, dual imaging systems.
The thermography division (38%) produces systems that provide precise temperature measurement capabilities and are used for a variety of industrial and commercial applications. The thermography market is comprised of a broad range of thermal imaging applications where both imaging and temperature measurement capabilities are required. This market ranges from simple heat sensing devices to sophisticated radiometric (temperature measuring) instruments that allow the user to perform extensive analysis and data collection. Advances in uncooled thermal imaging technology have improved the functionality of thermography products, lowered the cost of equipment, and expanded the markets beyond the traditional industrial, predictive and preventive maintenance segments. The company expects new markets to continue to develop in the future.
I know FLIR makes cool stuff…but do they make the really cool stuff MONEY? You betcha. Two weeks ago Flir announced that revenue for the second quarter ended June 30, 2004 increased 59% to $119.3 million from $75.2 million for the second quarter of 2003. Earnings from operations increased 75% to $27.2 million, or 23% of revenue, compared with $15.6 million, or 21% of revenue, for the second quarter of 2003. Net earnings for this year's second quarter increased 85% to $17.9 million, or $0.50 per diluted share compared to net earnings for the second quarter of 2003 of $9.7 million, or $0.27 per diluted share.
For the first six months of 2004, revenue increased 58% to $228.2 million from $144.3 million for the same period last year. Earnings from operations for the first six months of 2004 increased 67% to $49.1 million, or 22% of revenue, from $29.4 million, or 20% of revenue, for the first six months of 2003. Net earnings increased 62% to $30.6 million, or $0.87 per diluted share, compared to net earnings of $18.9 million, or $0.52 per diluted share, for the first six months of 2003.
An analysis of the change in earnings over each of the last four quarters and the current quarter estimate shows acceleration in the quarterly growth rates, which, in most companies, leads to an improvement in earnings growth. Earnings forecasts for FLIR have been increasing recently, which, for most companies, indicates an improvement in future earnings growth. FLIR has also reported earnings higher than those predicted in earlier estimates. This indicates an ability to exceed analyst’s expectations and the potential for improving earnings growth in the near future. Over the past 60 days the changes in the estimates of FLIR’s future EPS have been much better than the median company.
The expected annualized earnings growth rate for FLIR is 22.5%, which is faster than 96.5% of all covered stocks. The average earnings growth rate for all covered stocks is 7.7%. Look at that revenue growth. FLIR’s sales have grown at a rate of 56% over the last few quarters, compared to an industry average of only 15.1%. Look at the trend over the last 5 years (in MM$):
1999 179
2000 186
2001 214
2002 261
2003 312
TTM 395
Jiminey Cricket! Sure the PE is high at 39, but the forward PE’s going to be a bargain if this revenue growth sustains itself for the upcoming quarters. It all makes sense though. With everything that is going on around us, we are buying up these devices.
So what are the earnings going to be, $$$MR. MARKET$$$? Based on its financial results for the first six months of 2004, and the outlook for the remainder of the year, management currently expects revenue for 2004 to be approximately $470 million to $480 million and net earnings in the range of approximately $1.88 to $1.98 per diluted share. The ANAL-ysts so cleverly split the difference and said 2004 would come in at $1.92 and 2005 at $2.38 (24% growth). I’m laughing so hard I have to change my Depends.
$$$MR. MARKET$$$ has pegged 2004 earnings at $2.26/share and 2005 revenue at $2.94/share. Based on the 2004 earnings alone, and today’s PE of 39, FLIR should reach a share price of 88, which is well past my sell target. We’re not going to see another earnings report until late October. By then, $$$MR. MARKET$$$ will have already come and gone from his annual Vegas trip and this write up will be a hazy memory. I’ll need Thermo goggles.
Supporting these earnings projections are FLIR’s tremendous financial performance. Over the last 12 months, Return on Assets has been 12.2% (vs. industry avg 5.2%), Return on Investment = 14.3% (vs. industry avg 7.4%) and Return on Equity has been an amazing 31.7% (vs. industry avg 19.3%)! FLIR’s gross margin is 51.7% vs. the industry average of 20.6%.
The balance sheet also looks pretty solid with Quick Ratio of 2.1, Current Ratio of 3.7 and Times Interest Coverage of 10.9 which ranks FLIR in the top quartile of its industry for these ratios.
This growth in revenue is very realistic, considering the excellent strategic move that FLIR most recently deployed. In January 2004, the company acquired Indigo Systems Corp., based in Goleta, CA, for $190 million. Indigo produces infrared detectors and infrared camera subsystems and cameras. The company said that with this acquisition, it will have the ability to design and produce both cooled and uncooled infrared detectors. In addition, it will be able to expand in certain markets, including high-end scientific cameras, sales of camera assemblies to original equipment manufacturers, and certain military program markets. FLIR’s backlog is growing and growing. Gross margins are extremely strong and operating costs have come in lower than management’s expectations. With margins trending up and good cash flow, FLIR Systems appears to have a lot of momentum for the future.
Here’s what the boss had to say:
Earl Lewis, President and CEO, stated, "I am extremely pleased with our financial performance in the second quarter. All of our businesses are performing well, and our manufacturing facilities were able to keep pace with very strong order intake and achieve record revenue and operating profit. Our margins are again trending up, and our cash flow has been very good. I am confident we will see continued strong financial results for the remainder of 2004, so we are increasing both revenue and earning per share guidance for the year."
What he really should have said was, “Whether you like it or not, learn to love it, because its the best thing going. Wooooo!”
I am HUGE!!! Take a look at my homepage which lists all of my trades in the last 2 years:
$$$MR. MARKET$$$
King Arthur, George Washington, Winston Churchill, and Franklin Roosevelt were men of history who share something in common…they were all great men. However, none of these men even hold a candle to Ric Flair, whose lifetime accomplishments dwarf those of the aforementioned historical figures.
Winston Churchill, so often quoted, could never have come up with something like this:
“A kiss stealing, wheeling dealing, jet flying, limosine riding, son of a gun.”
“To be the man, you have to beat the man. Woooooooooo!”
Yes great men come and great men go, but no one has yet to walk that aisle with the Nature Boy:
So when it comes to picking stocks, there was no wonder that Flir Systems Inc (FLIR) grabbed my immediate attention like a Figure 4 leglock. Now it’s time to go to school. Woooooooooooooo!
Today I bought FLIR at 62.55. I will sell it in 4 to 6 weeks at 72.17. Here’s why I like FLIR:
FLIR’s stock is up 138% over the last 12 months, versus the market’s return of only 12%. No small feat when you see that the overall market has basically languished over the same period. What’s even nicer is the way in which its price momentum has sustained itself. It’s 3 month, 6 month and 12 month r^2 values are: 0.85, .86 and 0.91, respectively. This means that through thick and thin, FLIR’s stock price has ripped through the overall countercurrents.
Statistically speaking, a stock’s price change over the past year proves to be a good indicator for its performance over the subsequent six month period. The trend price for FLIR is projected to increase 36.1%, which is more favorable than 99.8% of all covered stocks. The average trend price change for all covered stocks is 1.1%
You can extend this analysis by looking at the current price of FLIR vs. its projected price 3 months ahead. A stock’s projected price is determined by the change in its trend price and its position in its price channel. FLIR is currently trading 33.5% below its projected price of $95.67, which makes it more attractive than 94.9% of all covered stocks on this measure.
FLIR designs, manufactures and markets thermal imaging and broadcast camera systems for use in commercial and government markets. That means that the good guys can watch what the bad guys are doing during the day, and at night. FLIR makes cameras that work in the dark, in haze, and even in rooms choked with smoke. They read infrared radiation and are not affected by ambient light. Remember in “Terminator 2” when Aaahnold was looking for someone’s clothes to wear and his infrared goggles said, “Endomorph”? I think FLIR’s stuff works kind of like that.
Terrorism, vandalism, and random violence threaten the safety of personnel and the integrity of public and private facilities around the world. ThermoVision Centurion imagers provide a key piece to any comprehensive security program, capturing clear, high-contrast scene detail undetectable by any other sensor technology. FLIR makes this ThermoVision stuff and about 100 other products like it. Lots of people are afraid of the bad guys. $$$MR. MARKET$$$ isn’t because I can snap them all in half. However, it never hurts to know where they are or what they are doing when you’re out at the Ivy Inn drinking 1,000 beers. Big companies are buying these things up like hotcakes to prevent their buildings from getting blown up. Good idea.
The imaging division (62% of 2003 revenues) manufactures systems that typically provide the capability to see and record an object over long distances, day or night, through adverse weather conditions, from a wide variety of vehicle, man portable and fixed installation platforms. The design and production of thermal imaging systems involves highly sophisticated mechanical engineering techniques. Imaging products include Star SAFIRE, a focal plane array, high resolution thermal imaging system used for search and rescue, surveillance and reconnaissance, border and maritime patrol and environmental monitoring applications; and SAFIRE, a digital airborne system with a high performance scanned infrared camera; and ULTRA series, airborne, dual gimbal-mounted, dual imaging systems.
The thermography division (38%) produces systems that provide precise temperature measurement capabilities and are used for a variety of industrial and commercial applications. The thermography market is comprised of a broad range of thermal imaging applications where both imaging and temperature measurement capabilities are required. This market ranges from simple heat sensing devices to sophisticated radiometric (temperature measuring) instruments that allow the user to perform extensive analysis and data collection. Advances in uncooled thermal imaging technology have improved the functionality of thermography products, lowered the cost of equipment, and expanded the markets beyond the traditional industrial, predictive and preventive maintenance segments. The company expects new markets to continue to develop in the future.
I know FLIR makes cool stuff…but do they make the really cool stuff MONEY? You betcha. Two weeks ago Flir announced that revenue for the second quarter ended June 30, 2004 increased 59% to $119.3 million from $75.2 million for the second quarter of 2003. Earnings from operations increased 75% to $27.2 million, or 23% of revenue, compared with $15.6 million, or 21% of revenue, for the second quarter of 2003. Net earnings for this year's second quarter increased 85% to $17.9 million, or $0.50 per diluted share compared to net earnings for the second quarter of 2003 of $9.7 million, or $0.27 per diluted share.
For the first six months of 2004, revenue increased 58% to $228.2 million from $144.3 million for the same period last year. Earnings from operations for the first six months of 2004 increased 67% to $49.1 million, or 22% of revenue, from $29.4 million, or 20% of revenue, for the first six months of 2003. Net earnings increased 62% to $30.6 million, or $0.87 per diluted share, compared to net earnings of $18.9 million, or $0.52 per diluted share, for the first six months of 2003.
An analysis of the change in earnings over each of the last four quarters and the current quarter estimate shows acceleration in the quarterly growth rates, which, in most companies, leads to an improvement in earnings growth. Earnings forecasts for FLIR have been increasing recently, which, for most companies, indicates an improvement in future earnings growth. FLIR has also reported earnings higher than those predicted in earlier estimates. This indicates an ability to exceed analyst’s expectations and the potential for improving earnings growth in the near future. Over the past 60 days the changes in the estimates of FLIR’s future EPS have been much better than the median company.
The expected annualized earnings growth rate for FLIR is 22.5%, which is faster than 96.5% of all covered stocks. The average earnings growth rate for all covered stocks is 7.7%. Look at that revenue growth. FLIR’s sales have grown at a rate of 56% over the last few quarters, compared to an industry average of only 15.1%. Look at the trend over the last 5 years (in MM$):
1999 179
2000 186
2001 214
2002 261
2003 312
TTM 395
Jiminey Cricket! Sure the PE is high at 39, but the forward PE’s going to be a bargain if this revenue growth sustains itself for the upcoming quarters. It all makes sense though. With everything that is going on around us, we are buying up these devices.
So what are the earnings going to be, $$$MR. MARKET$$$? Based on its financial results for the first six months of 2004, and the outlook for the remainder of the year, management currently expects revenue for 2004 to be approximately $470 million to $480 million and net earnings in the range of approximately $1.88 to $1.98 per diluted share. The ANAL-ysts so cleverly split the difference and said 2004 would come in at $1.92 and 2005 at $2.38 (24% growth). I’m laughing so hard I have to change my Depends.
$$$MR. MARKET$$$ has pegged 2004 earnings at $2.26/share and 2005 revenue at $2.94/share. Based on the 2004 earnings alone, and today’s PE of 39, FLIR should reach a share price of 88, which is well past my sell target. We’re not going to see another earnings report until late October. By then, $$$MR. MARKET$$$ will have already come and gone from his annual Vegas trip and this write up will be a hazy memory. I’ll need Thermo goggles.
Supporting these earnings projections are FLIR’s tremendous financial performance. Over the last 12 months, Return on Assets has been 12.2% (vs. industry avg 5.2%), Return on Investment = 14.3% (vs. industry avg 7.4%) and Return on Equity has been an amazing 31.7% (vs. industry avg 19.3%)! FLIR’s gross margin is 51.7% vs. the industry average of 20.6%.
The balance sheet also looks pretty solid with Quick Ratio of 2.1, Current Ratio of 3.7 and Times Interest Coverage of 10.9 which ranks FLIR in the top quartile of its industry for these ratios.
This growth in revenue is very realistic, considering the excellent strategic move that FLIR most recently deployed. In January 2004, the company acquired Indigo Systems Corp., based in Goleta, CA, for $190 million. Indigo produces infrared detectors and infrared camera subsystems and cameras. The company said that with this acquisition, it will have the ability to design and produce both cooled and uncooled infrared detectors. In addition, it will be able to expand in certain markets, including high-end scientific cameras, sales of camera assemblies to original equipment manufacturers, and certain military program markets. FLIR’s backlog is growing and growing. Gross margins are extremely strong and operating costs have come in lower than management’s expectations. With margins trending up and good cash flow, FLIR Systems appears to have a lot of momentum for the future.
Here’s what the boss had to say:
Earl Lewis, President and CEO, stated, "I am extremely pleased with our financial performance in the second quarter. All of our businesses are performing well, and our manufacturing facilities were able to keep pace with very strong order intake and achieve record revenue and operating profit. Our margins are again trending up, and our cash flow has been very good. I am confident we will see continued strong financial results for the remainder of 2004, so we are increasing both revenue and earning per share guidance for the year."
What he really should have said was, “Whether you like it or not, learn to love it, because its the best thing going. Wooooo!”
I am HUGE!!! Take a look at my homepage which lists all of my trades in the last 2 years:
$$$MR. MARKET$$$
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