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Harris Promises Suitable Growth

Aitezaz Khan profile picture
Aitezaz Khan


  • Harris has delivered strong fundamental performance during Q2 and H1 2019.
  • Harris has outpaced the S&P 500 index.
  • The company has a suitable valuation and is poised to grow.
  • Despite strong fundamentals, the technical price chart hints towards some correction, and it would be best to buy the dips.

Harris Corporation (HRS) provides solutions related to air traffic management, tactical communications, avionics and electronic warfare, geospatial systems and services, and space and intelligence. Headquartered in the US, its products/services are broadly categorized into 3 business segments namely communication systems, space and intelligence systems, and electronic systems (Figure-1). The company's growth is predominantly based on providing innovative technological solutions in the above-mentioned business segments.

https://static.seekingalpha.com/uploads/2019/2/5/48748470-1549349304094677.pngFigure-1 (Source: Company Website)


In this article, I have evaluated the technical picture of HRS that indicates the stock is slightly risky at current prices. But that's just the technical picture. A fundamental analysis that follows indicates otherwise and suggests that HRS has solid growth potential due to the very nature of its operations, and the demand for its products in the US defense industry. Moreover, the company has a suitable valuation among peers. It follows, therefore, that HRS is a buy even at current prices. However, for maximum returns (and considering the technical discussion) I believe a suitable entry point would be below $150.

The technical picture of Harris:

At the time of writing, HRS last traded at ~$157. Given the 52-week price range that lies between $123.24 and $175.5, HRS is currently trading slightly above the median value of the 52-week range. From a technical viewpoint, I consider stocks that trade lower than the median value of their 52-week range, as safer investments. Based on that, HRS appears to be slightly pricey at current prices and the technical price chart (Figure-2) also suggests that the recent strength witnessed in the share prices could meet resistance at some point.

https://static.seekingalpha.com/uploads/2019/2/5/48748470-15493714355720696.pngFigure-2 (Source: Finviz)

HRS's fundamental strength (discussed later) supports an investment case even at the current prices and based on the analysts' recommendations (Figure-3), the stock is a buy with a short term target price of ~$169. Nonetheless, I suggest waiting for a

This article was written by

Aitezaz Khan profile picture
Associated with the securities and exchange business for nearly a decade, and educated in finance, auditing, law, HR and marketing; my main focus is on growth investing (though I do sometimes identify value picks in the metals and mining sector). The focus of my coverage is on the precious metals/ base metals/ energy/ commodities/ and automobile industry.In my experience, the SA audience is an inevitable part of the value chain on this forum. Thus, I encourage my readers to share constructive feedback, as it almost always help support a never-ending learning process.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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