| Stock (Symbol) | Stock Price | |
Harmon (HAR) |
$120 |
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| Data is as of | Expected to Report | Sector |
January 29, 2015 |
Apr 29 – May 4 |
Technology |
| Sharek’s Take | ||
 Harmon broke out when it whooped profit estimates yesterday. HAR made $1.79 a share last qtr, beating estimates by 51 cents, as profits jumped 64% on only a 19% increase in sales. The reason profits are soaring is Harmon is the technology leader in multimedia connectivity. Most every car company has Harmon technology installed in its vehicles to provide navigation, music, internet, phone connectivity, etc. It did $6 billion in sales last qtr, with $3 billion coming from this Infotainment division. Another $2 billion was done in Harmon’s Lifestyle division, which is audio products like Infinity, Harmon Kardon, JBL etc. And lastly $1 billion was from the Professional division which does high-end audio, video & lighting from places like the Las Vegas MGM hotel to the Grammy awards & the Super Bowl. Harmon has more than 3000 patents with all 3 divisions posting profit margins in the mid teens. Harmon is hot and I’ll be adding the stock to the Growth Portfolio & it will replace Alibaba (BABA) in the Aggressive Growth Portfolio. |
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| One-Year Chart | ||
 Not only has qtrly profit growth been solid the past 4qtrs, but growth just accelerated today. So money managers who invest in fast-growth companies will now have to look at (or buy) HAR. The company has also whipped earnings estimates in 3-of-4 qtrs. Estimates haven’t had a change to get updated, I bet they will be upped. |
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| Earnings Table | ||
 Harmon had 64% profit growth on just a 19% increase in sales. Profit growth of 64% was much higher than the company reported in the last year, perhaps this is the beginning of a faster profit growth stage.HAR crushed earnings estimates by an astonishing 51 cents, that’s the best beat I have seen this quarter. HAR will be a must-add for many portfolio managers. Annual Profit Estimates...I don’t have prior data on this, so I don’t know if 2016 or 2017 increased. 2015’s did by 60 cents but most of that is from HAR beating by 51 cents. Quarterly estimates don’t look great, but analysts haven’t had time to update estimates. |
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| Fair Value | ||
 Harmon has a sloppy profit history, as the recession took its toll. But now with electronic devices controlling everything, this new linked-car technology is theirs — so the world is theirs. Maybe someday the home will be too. 24 times earnings is reasonable for this stock, and the company has its year-end June 30th so its 2016 fiscal year is just 6 months away. |
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| Ten-Year Chart | ||
 Harmon isn’t the type of stock I usually invest in, and it took me a full day to gather the data and compile this research report. I don’t like companies that have down years in profits, much less periods, but I’ve liked Harmon since 2010 when it was $50. HAR didn’t breakout past $50 until the Summer of 2013. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
7 of 24 |
Harmon has the cutting edge interconnect technology and sound equipment that consumers demand in this age, and is profiting handsomely from it. This is an exciting company to own. Since HAR just beat the street & upped estimates the stock is timely and has clear sailing ahead. |
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Aggressive Growth Portfolio
2 of 12 |
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