| Stock (Symbol) | Stock Price | |
Harmon (HAR) |
$122 |
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| Data is as of | Expected to Report | Sector |
| May 29, 2015 | Aug 5 – Aug 10 |
Technology |
| Sharek’s Take | ||
 Harmon’s qtr was hurt by the strong dollar. Its 3 divisions will put out $6 billion in sales this year: $3 billion coming from this Infotainment division (vehicle technology vehicle navigation, music, internet, phone connectivity), $2 billion in the Lifestyle division (Infinity, Harmon Kardon, JBL) and $1 billion from the Professional division (high-end audio, video & lighting). To make things clear, here’s Harmon’s sales growth last qtr before (after) foreign exchange: Infotainment up 19% (6%). Lifestyle up just 2% (down 6%) due to tough comparisons from last year when it got a big order from a mobile telecom company. Professional up 26% (21%). Overall, sales rose 14% but show up on the books as just 4% due to FX. HAR missed profit estimates by a couple of cents, 2015’s est came down, but 2016’s and 2017’s rose. The stock has dropped a bit — lost its momentum — but is the technology leader in multimedia connectivity with 3000 patents. Profits could grow 20% to 30% the next several years and HAR’s P/E is a reasonable 22. |
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| One-Year Chart | ||
 Notice the gap up 2QtrsAgo when things were good and the gap down after last qtr’s results came out. Estimates for the next 2 qtrs fell too. The strong dollar has killed HAR’s momentum, but next year we will have easy comparisons. |
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| Earnings Table | ||
 Sales rose 4% last quarter. Profits increased just 9%, a far cry from the 64% profit growth 2QtrsAgo. This killed HAR’s momentum.
The company missed estimates by 2 cents after beating by a whopping 51 cents 2QtrsAgo. |
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| Fair Value | ||
 Back in the early 00’s, I used to track — and want — HAR, but it’s profits got hut from the recession. Currently, HAR sells for 22x earnings which is where it should be. I see 22% upside into next year. |
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| Ten-Year Chart | ||
 The ten-year chart doesn’t look good in the middle, but the 1990 through 2005 chart (not shown) looks perfect. Now that profits are back to all-time highs again HAR can resume that old pattern. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
13 of 22 |
Harmon’s cutting edge technology is great, but the strong dollar is putting a damper on this years profitability, and that’s killed momentum for now. This is a great long-term growth stock with the ability to put out 20% or more annual returns, but maybe not starting until next year. |
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Aggressive Growth Portfolio
N/A |
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