mrmarket
01-14-2004, 04:08 PM
The screen door slams, Angelina's dress waves
Like a vision she dances across the porch as the radio plays
Roy Orbison singing for the lonely
that's me and I want you only
Don't turn me home again
I just can't face myself alone again tonight
Don't run back inside, you know just what I'm here for
So you're scared and you're thinking
That maybe you ain't that young anymore
Show a little faith there's magic in the night
You ain't a beauty but hey you're alright
And that's alright with me
This old Ford she's gonna overheat
Make up your mind girl I gotta get her back out on the street
I know you're lonely like me so baby don't try and fake it
I'm no prince and I can't lay the stars at your feet
But I got this old car and she's pretty tough to beat
There's plenty of room in my front seat, baby if you wanna take it
Oh roll down the window and let the wind blow back your hair
It's like the rushing touch, the dirty wings them highway Angels wear
Well tonight we're gonna find out how it feels
I'm gonna trade in your wings - for wheels
Climb in back, heaven's waiting down on the tracks
Ah, mama, come take my hand
We're gonna ride all the way to the promised land
Oh I'm gonna dance all the way, dance all the way
Well I don't know but baby I've been told
There's something waiting for us, down that dirty road
Oh take a chance, take a chance, take a chance
Well now I bought this guitar and I learned how to make it talk
I got my car parked out back if you're ready to take that long walk
From your front porch to my front seat
Well I think we could take it all babe, just you and me
Climb in back baby, the ride's for free
Oh come take my hand, we're gonna ride all the way to the promised land
We'll dance all the way
Oh baby I don't know but I've been told
There's something waiting for us, down that dirty road
If we take our chance, take our chance
Now the season's over and I feel it getting cold
I wish I could take you to some sandy beach where we'd never grow old
Ah but baby you know that's just jive
But tonight's bustin' open and I'm alive
Oh do what you can to make me feel like a man
But this 4/4/2's gonna overheat
Make up your mind girl, I gotta get her back out on the street
I know you're lonely like me, oh so don't fake it
And maybe I can't lay the stars at your feet
But I got this old car and she's pretty tough to beat
There's plenty of room in my front seat
Oh if you think you can make it, climb in
This is town full of losers and baby I was born to win
Can you dig it? The Titans are cruising down Ft. Lauderdale on Los Olas Boulevard. Their tan 19” biceps are pressed firmly against the shiny metal of Titan Omega’s gleaming Porsche Boxster. The young and fit women swoon as the Titans navigate their way to the ocean. What is it that’s causing the world to stand still? Is it the sight of one of the nation’s leading plastic surgeons sitting next to the world’s best stock picker? Actually, it’s the sound of the Bruce Springsteen & the E Street Band blaring out of 600 watts of JBL speakers. Life is good.
Today I bought HAR (Harman International Industries) at 77.39. I will sell it in 4 to 6 weeks at 89.31. Here’s why I like HAR:
Oh my, has $$$MR. MARKET$$$ lost his senses? True, HAR is up about 195% over the last 12 months but boy is it ever expensive. With a P/E of 45, this is hardly a true MM stock. Sometimes you gotta drill down boys and girls. The forward PE is only 30 and these guys are the kings of sandbaggery. Even more incredible is the price momentum of this stock. The 12 month r^2 is 0.91 and it’s 6 month r^2 is 0.97. I couldn’t draw a straighter line if I had a ruler!
You have heard of Harman. Harman built its reputation on audio equipment for homes and commercial venues. It boasts some of the best-known brands in the business: JBL, Harman Kardon, Infinity, Becker, AKG, Soundcraft, Lexicon and Mark Levinson. HAR manufactures and markets high-fidelity audio products and electronic systems targeted primarily at OEM, consumer and professional markets. They want to rule the world of “infotainment” in your automobile. Chances are, every fancy car you see will have a HAR system in it. Chances are better, that any new fancy car you see will be equipped with lots of HAR gizmos like dashboard installed cellphones, car DVD players, Mapquest stuff, and, of course, a bad ass stereo system. The company is probably best known for its home-audio brands like JBL or Harman/Kardon. But it's greatest growth potential is in outfitting cars with top-of-the-line entertainment and communication systems. Harman has a big lead on the competition and the market is enormous. . A radio-CD system costs $300 vs. $1,000 for an infotainment product. Can you dig it?
In October, HAR announced record sales and earnings for the company's fiscal first quarter ended September 30, 2003. Net sales for the quarter were $597.3 million, which was a +22% increase over net sales of $490.8 million in the same quarter last year. Net income for the quarter was $19.8 million compared to $9.8 million a year ago. Earnings per diluted share of 58 cents were double the 29 cents for the same period last year. Can you hear the jing a ling?
Harman is the clear technology and market share leader in an underpenetrated market for supplying high-end infotainment systems to automobile manufacturers. In addition, revenue visibility is high as Harman's infotainment systems are already scheduled to be installed in a number of luxury car models in upcoming years, including several Mercedes-Benz, BMW, Audi and Porsche models. Harman looks for future profit growth from expanded deals with Mercedes, Audi 6 and Dodge Ram trucks. New contracts include a 2005 deal with General Motors Corp. to offer the system on its Buick line. Three Mercury lines will offer the system in the 2006 model year, thanks to a contract signed last year. Harman's products will be in 1 million to 1.2 million vehicles of the 2005 minted automobiles. When you look at the fact that about 50 million cars are produced worldwide each year, that’s an awful lot of growth potential!
Harman also rules the world of sound outside of the car. Its systems can be found in movie theaters, airports, sports arenas and music venues. The key here is that HAR will be surfing the rebound in the economy as more of these types of construction projects once again materialize. But it’s the auto business that is the “engine of growth”.
Analysts estimate that revenues will climb from $2.2 B in 2003 to $2.6 B in 2004. Indeed, HAR has grown their revenues sequentially each year for the past 4 years. $$$MR. MARKET$$$ believes that there has been a suppression of high end spending over the last couple of years and, based on the high end Xmas sales, I think we’ll see much more spending on fancy stuff. Give HAR $2.8 B in revenues for 2004.
With the new gadgets coming out, margins for HAR products will widen significantly. This means that their revenue growth will lead to even greater acceleration of earnings. Last year, HAR did $1.58/share. ANALysts say that HAR will make $2.07/share in 2004. Don’t make me laugh. $$$MR. MARKET$$$ says that the additional $200 million in revenue will translate into total 2004 earnings of $2.44/share. At today’s PE of 45, that gives you a share price of $109.80 which is well past my target. Given the 25% growth expected for HAR, this PE, and resulting stock price, is not unreasonable. Remember that the overall market is expected to be very strong. Also, as the Euro gets stronger against the dollar, HAR’s products become much more affordable.
That’s not all folks. If your kid uses Kazaa and Napster, have we got a deal for you. HAR also offers branded audio products to PC users through supply agreements and licenses with Dell and Apple. It believes these audio systems enhance the appeal and capability of the PC as an entertainment device. PC’s will probably be the stereos of the future and HAR is all over this fact like white on rice. SoundSticks II comprises two powerful 10-watt satellite speakers backed by a 20-watt subwoofer, which produces stunning bass response down to 44Hz. Housed in a tubular, transparent enclosure, the satellite towers contain four Odyssey® transducers that deliver crisp, sparkling high frequencies beyond 20kHz.
As they stay up with the times, Harman launched Harman Audio Factory Store, one of the first audio manufacturers to establish a branded presence on eBay. Harman's eBay Store has proven to be a highly effective sales channel. Harman offers refurbished and prior seasons' inventory on eBay and begins most auctions at one dollar, with no reserve price. With bids soaring from $200 to nearly $6,000 for home theater systems, speakers and other auction equipment, Harman's store achieves 100 percent sell-through. Nearly all listings receive multiple bids and closing prices have been higher than in traditional liquidation channels.
With a return on Equity of 17.8%, HAR scores near the top of this management effectiveness benchmark. With a Beta of 1.29, it should continue to outperform the anticipated strong market this election year. S&P gives HAR 4 stars.
Here’s what the bosses had to say:
Dr. Sidney Harman, Executive Chairman, and Bernard Girod, Vice
Chairman and Chief Executive Officer commented:
"The Company achieved record first quarter results while
continuing to make investments that strengthen our position as a
leading provider of audio and infotainment systems. We also
announced a two-for-one stock split subject to shareholder approval at
our upcoming annual meeting. The first quarter has provided us with a good start to the new fiscal year. We look forward to the next three quarters." So do I, Sid. Thanks for splitting the stock. The way you’re going, you’ll split it again next year.
Like a vision she dances across the porch as the radio plays
Roy Orbison singing for the lonely
that's me and I want you only
Don't turn me home again
I just can't face myself alone again tonight
Don't run back inside, you know just what I'm here for
So you're scared and you're thinking
That maybe you ain't that young anymore
Show a little faith there's magic in the night
You ain't a beauty but hey you're alright
And that's alright with me
This old Ford she's gonna overheat
Make up your mind girl I gotta get her back out on the street
I know you're lonely like me so baby don't try and fake it
I'm no prince and I can't lay the stars at your feet
But I got this old car and she's pretty tough to beat
There's plenty of room in my front seat, baby if you wanna take it
Oh roll down the window and let the wind blow back your hair
It's like the rushing touch, the dirty wings them highway Angels wear
Well tonight we're gonna find out how it feels
I'm gonna trade in your wings - for wheels
Climb in back, heaven's waiting down on the tracks
Ah, mama, come take my hand
We're gonna ride all the way to the promised land
Oh I'm gonna dance all the way, dance all the way
Well I don't know but baby I've been told
There's something waiting for us, down that dirty road
Oh take a chance, take a chance, take a chance
Well now I bought this guitar and I learned how to make it talk
I got my car parked out back if you're ready to take that long walk
From your front porch to my front seat
Well I think we could take it all babe, just you and me
Climb in back baby, the ride's for free
Oh come take my hand, we're gonna ride all the way to the promised land
We'll dance all the way
Oh baby I don't know but I've been told
There's something waiting for us, down that dirty road
If we take our chance, take our chance
Now the season's over and I feel it getting cold
I wish I could take you to some sandy beach where we'd never grow old
Ah but baby you know that's just jive
But tonight's bustin' open and I'm alive
Oh do what you can to make me feel like a man
But this 4/4/2's gonna overheat
Make up your mind girl, I gotta get her back out on the street
I know you're lonely like me, oh so don't fake it
And maybe I can't lay the stars at your feet
But I got this old car and she's pretty tough to beat
There's plenty of room in my front seat
Oh if you think you can make it, climb in
This is town full of losers and baby I was born to win
Can you dig it? The Titans are cruising down Ft. Lauderdale on Los Olas Boulevard. Their tan 19” biceps are pressed firmly against the shiny metal of Titan Omega’s gleaming Porsche Boxster. The young and fit women swoon as the Titans navigate their way to the ocean. What is it that’s causing the world to stand still? Is it the sight of one of the nation’s leading plastic surgeons sitting next to the world’s best stock picker? Actually, it’s the sound of the Bruce Springsteen & the E Street Band blaring out of 600 watts of JBL speakers. Life is good.
Today I bought HAR (Harman International Industries) at 77.39. I will sell it in 4 to 6 weeks at 89.31. Here’s why I like HAR:
Oh my, has $$$MR. MARKET$$$ lost his senses? True, HAR is up about 195% over the last 12 months but boy is it ever expensive. With a P/E of 45, this is hardly a true MM stock. Sometimes you gotta drill down boys and girls. The forward PE is only 30 and these guys are the kings of sandbaggery. Even more incredible is the price momentum of this stock. The 12 month r^2 is 0.91 and it’s 6 month r^2 is 0.97. I couldn’t draw a straighter line if I had a ruler!
You have heard of Harman. Harman built its reputation on audio equipment for homes and commercial venues. It boasts some of the best-known brands in the business: JBL, Harman Kardon, Infinity, Becker, AKG, Soundcraft, Lexicon and Mark Levinson. HAR manufactures and markets high-fidelity audio products and electronic systems targeted primarily at OEM, consumer and professional markets. They want to rule the world of “infotainment” in your automobile. Chances are, every fancy car you see will have a HAR system in it. Chances are better, that any new fancy car you see will be equipped with lots of HAR gizmos like dashboard installed cellphones, car DVD players, Mapquest stuff, and, of course, a bad ass stereo system. The company is probably best known for its home-audio brands like JBL or Harman/Kardon. But it's greatest growth potential is in outfitting cars with top-of-the-line entertainment and communication systems. Harman has a big lead on the competition and the market is enormous. . A radio-CD system costs $300 vs. $1,000 for an infotainment product. Can you dig it?
In October, HAR announced record sales and earnings for the company's fiscal first quarter ended September 30, 2003. Net sales for the quarter were $597.3 million, which was a +22% increase over net sales of $490.8 million in the same quarter last year. Net income for the quarter was $19.8 million compared to $9.8 million a year ago. Earnings per diluted share of 58 cents were double the 29 cents for the same period last year. Can you hear the jing a ling?
Harman is the clear technology and market share leader in an underpenetrated market for supplying high-end infotainment systems to automobile manufacturers. In addition, revenue visibility is high as Harman's infotainment systems are already scheduled to be installed in a number of luxury car models in upcoming years, including several Mercedes-Benz, BMW, Audi and Porsche models. Harman looks for future profit growth from expanded deals with Mercedes, Audi 6 and Dodge Ram trucks. New contracts include a 2005 deal with General Motors Corp. to offer the system on its Buick line. Three Mercury lines will offer the system in the 2006 model year, thanks to a contract signed last year. Harman's products will be in 1 million to 1.2 million vehicles of the 2005 minted automobiles. When you look at the fact that about 50 million cars are produced worldwide each year, that’s an awful lot of growth potential!
Harman also rules the world of sound outside of the car. Its systems can be found in movie theaters, airports, sports arenas and music venues. The key here is that HAR will be surfing the rebound in the economy as more of these types of construction projects once again materialize. But it’s the auto business that is the “engine of growth”.
Analysts estimate that revenues will climb from $2.2 B in 2003 to $2.6 B in 2004. Indeed, HAR has grown their revenues sequentially each year for the past 4 years. $$$MR. MARKET$$$ believes that there has been a suppression of high end spending over the last couple of years and, based on the high end Xmas sales, I think we’ll see much more spending on fancy stuff. Give HAR $2.8 B in revenues for 2004.
With the new gadgets coming out, margins for HAR products will widen significantly. This means that their revenue growth will lead to even greater acceleration of earnings. Last year, HAR did $1.58/share. ANALysts say that HAR will make $2.07/share in 2004. Don’t make me laugh. $$$MR. MARKET$$$ says that the additional $200 million in revenue will translate into total 2004 earnings of $2.44/share. At today’s PE of 45, that gives you a share price of $109.80 which is well past my target. Given the 25% growth expected for HAR, this PE, and resulting stock price, is not unreasonable. Remember that the overall market is expected to be very strong. Also, as the Euro gets stronger against the dollar, HAR’s products become much more affordable.
That’s not all folks. If your kid uses Kazaa and Napster, have we got a deal for you. HAR also offers branded audio products to PC users through supply agreements and licenses with Dell and Apple. It believes these audio systems enhance the appeal and capability of the PC as an entertainment device. PC’s will probably be the stereos of the future and HAR is all over this fact like white on rice. SoundSticks II comprises two powerful 10-watt satellite speakers backed by a 20-watt subwoofer, which produces stunning bass response down to 44Hz. Housed in a tubular, transparent enclosure, the satellite towers contain four Odyssey® transducers that deliver crisp, sparkling high frequencies beyond 20kHz.
As they stay up with the times, Harman launched Harman Audio Factory Store, one of the first audio manufacturers to establish a branded presence on eBay. Harman's eBay Store has proven to be a highly effective sales channel. Harman offers refurbished and prior seasons' inventory on eBay and begins most auctions at one dollar, with no reserve price. With bids soaring from $200 to nearly $6,000 for home theater systems, speakers and other auction equipment, Harman's store achieves 100 percent sell-through. Nearly all listings receive multiple bids and closing prices have been higher than in traditional liquidation channels.
With a return on Equity of 17.8%, HAR scores near the top of this management effectiveness benchmark. With a Beta of 1.29, it should continue to outperform the anticipated strong market this election year. S&P gives HAR 4 stars.
Here’s what the bosses had to say:
Dr. Sidney Harman, Executive Chairman, and Bernard Girod, Vice
Chairman and Chief Executive Officer commented:
"The Company achieved record first quarter results while
continuing to make investments that strengthen our position as a
leading provider of audio and infotainment systems. We also
announced a two-for-one stock split subject to shareholder approval at
our upcoming annual meeting. The first quarter has provided us with a good start to the new fiscal year. We look forward to the next three quarters." So do I, Sid. Thanks for splitting the stock. The way you’re going, you’ll split it again next year.