FLIR Systems: Profiting in Darkness

Jul.10.10 | About: FLIR Systems, (FLIR)

FLIR Systems, Inc. (NASDAQ:FLIR) designs, manufactures and markets thermal imaging and broadcast camera systems for applications in the commercial and government markets. The company's products come in a variety of configurations such as handheld or ground-based systems, as well as systems mounted on ships, helicopters and airplanes. Their thermal imaging systems use infrared technologies that detect infrared radiation, or heat, enabling the operator to measure minute temperature differences and to see objects in daylight or total darkness and through smoke, haze and most types of fog.

Some analysts are predicting that since the US forces in the Middle East are one of the largest customers, the stocks glory days are over. I'm taking an opposite view and think that the company's equipment will have a lot of civilian applications because as much as we'd like to believe it, the war on terrorists will never be over. The stock is trading at 30.49 and a stop loss at 28.98, which is the present 50 day moving average is advised in case I'm wrong.

The stock hit 12 new highs in the last 20 sessions and is 4 for 5 recently. The last month has seen a 14.29% price appreciation. 12 of the 13 Barchart technical indicators signal buy for an over all buy rating of 96%. The stock trades above its 20, 50 and 100 day moving average and has a Barchart Trend Spotter (tm) buy signal.

Investor confidence as measured on Motley Fool is extremely high with the CAPS members voting 843 to 24 that the stock will beat the market, The more experienced All Stars agree by a vote of 217 to 2. Fool notes that the columnist they follow have written positive articles 11 to 1.

The fundamentals on this stock are very strong. The Wall Street brokerage firms like it and have 9 buy and 8 hold reports published. They expect sales to increase 13.60% this year and 13.40% next year. Double digit earnings growth projections have also been published with EPS increases of 14.50% next year and a 5 year compounded EPs growth rate of 16.32% estimated.

I'm high on this stocks and adding it to the New High portfolio because:

  • Barchart technical buy signals for a 96% overall buy signal
  • New highs in better than 50% of the most recent trading sessions
  • Extremely high investor sentiment
  • Wall Street buy recommendations to their clients based on estimates of double digit increases in sales and earnings.

Disclosure: No position in FLIR at the time of publication