Best of the Week
Most Popular
1.London House Prices Bubble, Debt Slavery, Crimea 2.0 - Russia Ukraine Annexation - Nadeem_Walayat
2. Gold And Silver – 2014 Coud Be A Yawner; Be Prepared For A Surprise - Michael_Noonan
3.Sheffield, Rotherham Roma Benefits Plague, Ch5 Documentary Gypsies on Benefits & Proud - Nadeem_Walayat
4.Glaring Q.E. Failure Spotted - Money Velocity Is Falling Rapidly - Jim_Willie_CB
5.Don't Miss the Boat on Big Biotech Catalysts: Keith Markey - Keith Markey
6.Gold Prices 2014: Do What Goldman Does, Not What It Says - David Zeiler
7.Bitcoin Price Strong Appreciation to Be Followed by Declines? - Mike_McAra
8.Gold Preparing to Launch as U.S. Dollar Drops to Key Support - Jason_Hamlin
9.Doctor Doom on the Fiat Money Empire Coming Financial Crisis - Andrew_McKillop
10.The Real Purpose Of QE - It’s Not Employment - Darryl_R_Schoon
Last 72 Hrs
Gold and Silver - Counting Blessings and Tender Mercies - 20th Apr 14 - Jesse
The CIA Through The Looking-Glass - 20th Apr 14 - Stephen_Merrill
Gold And Silver - Gann, Cardinal Grand Cross, A Mousetrap, And Wrong Expectations - 20th Apr 14 - Michael Noonan
Nikkei Stock Market - Sell Japan - 20th Apr 14 - WavePatternTraders
America has Become a Police State - 19th Apr 14
Elite Herd Psychology And War By Default - 19th Apr 14
E.U. Officially Adopts the Bank Depositors Bail-In - 19th Apr 14
Goldman Sachs Is Highly Motivated To Low-Ball Gold Price - 19th Apr 14
Save MtGox - Bitcoin Important Implications of Going Down - 19th Apr 14
Stock Market SPX Topping Valuations - 19th Apr 14
Tesco Profits Panic! Back to Back £5 Off £40 Shop Voucher Promotions - 18th Apr 14
The Obama Game - Is Putin Being Lured Into a Trap? - 18th Apr 14
The Growing Threat to Capitalism - 18th Apr 14
Build Biotech Wealth on Solid Platforms - 18th Apr 14
Has Solar Power Finally Arrived? - 18th Apr 14
Bank Depositor Bail-Ins and Real Assets vs Liability-Based Assets - 18th Apr 14
10 Ways to Screw up Your Retirement - 17th Apr 14
One of Harry Dent’s Three Keys to Market Prediction is Cycles - 17th Apr 14
Obamacare Proof Stocks - 17th Apr 14
Gold, Silver And The Mining Sector: Prepare For A Severe Fall - 17th Apr 14
Hidden Australian Life Sciences Bio-tech Growth Stocks - 17th Apr 14
Disrupting Big Data Status Quo - 17th Apr 14
What the Stock Market Bears Have Been Waiting for... - 17th Apr 14
Copper Is Pathological and Suffers from SAD, but It Has Value - 17th Apr 14
Old World Order New World Order, Chaos And Change - 17th Apr 14
Even The US Government Will Abandon the U.S. Dollar - 17th Apr 14
Gold - Coming Super Bubble - 17th Apr 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Grow Your Stocks Portfolio With The "Eye in the Sky"

Companies / Tech Stocks May 25, 2012 - 06:12 AM GMT

By: Money_Morning

Companies

Best Financial Markets Analysis ArticleG.S. Early writes: Smile.... you're on the 21st century's version of Candid Camera.

Whether you're an Islamic troublemaker in North Waziristan, a rowdy football fan, or a hopeful immigrant trying to slip across the border, the eye in the sky sees everything.


In the halls of power, there's a term for this. It's called the surveillance society. And it is one of the biggest trends inside and outside the military industrial complex.

Also known as ISR - intelligence, surveillance and reconnaissance-it's an outgrowth of more than a decade of war in Iraq and Afghanistan. It's a place where everyone has heard of unmanned aerial vehicles or UAVs.

But while UAVs are an amazing technology in themselves, they aren't very effective unless they can report on what they see -that's the ISR piece of the puzzle.

And that's precisely where a company like FLIR Systems Inc. (Nasdaq: FLIR) comes in. FLIR provides the optics and equipment to make it all happen both in the air and on the ground.

What Analysts are Missing About FLIR Systems
Founded in 1978, FLIR has developed a reputation for building world-class equipment.

And now that these systems have proven themselves in some of the harshest conditions on Earth, the company is expanding to a broad number of other applications in market sectors outside the military.

However, looking at FLIR's chart, it's an understatement to say that this specialty defense imaging stock has been hit hard by the budget cuts and the winding down of our presence in Iraq and Afghanistan.

But there's one thing the analysts are missing. The commercial applications beyond the military are where the money is at this point.

It's like when the same analysts blew the call in the opposite direction years ago with iRobot (Nasdaq: IRBT) when they pinned the entire business on its retail products, like the Roomba vacuum.

The real money was its burgeoning defense contracts. The military started to buy its robots, or unmanned ground vehicles (UGVs), and the stock took off.

Here it's the opposite story -- FLIR's stock is being discounted because its military work is slowing. It's a sucker's bet.

Here's why....

FLIR Takes a Licking, But Keeps on Ticking
FLIR develops and makes forward looking infrared (FLIR) cameras, or in tech-speak, thermal imaging systems.

These cameras can see at night, through rain, fog, or snow-- you name it. These IR systems are also very good at picking out heat signatures and FLIR's system is top of the line.

The military uses them on the wildly popular unmanned vehicles as well as for base camp security cameras. The plastics industry also uses the equipment for making specialty plastics.

Sailors even use them 24/7 to see through the pea soup at sea.

FLIR started selling these cameras to home and business security companies as well as other commercial industries a few years ago. It's become the fastest-growing division of the company. Sales in its commercial division were up 3% last quarter.

What makes FLIR's cameras such a hit in the private sector is that they're built to military specifications, which means they can take a licking and keep on ticking.

FLIR's systems are made of steel and heavy duty optical-quality glass lenses, bolted into cases that can take winters in the mountains of Afghanistan, summers in the Iraqi desert or wind and weather at 30,000 feet.

On the other hand, its competitors have plastic boxes snapped together with plastic lenses.

First responders, law enforcement, fire and rescue, homeland security as well as shipping, chemical, refining and commercial/residential security companies are all very viable new and developing markets for FLIR. Companies and organizations will pay up when they need reliable, accurate and robust equipment.

Spending Cuts? Not For FLIR
What's more, even though the government is cutting back, it's not cutting back on ISR, UAVs, or battlefield technology. The fewer soldiers we need to put in harm's way and the more persistent we can make ISR, the cheaper it is to operate the largest fighting force on the planet.

And if you want to save money in the Department of Defense, it's a lot easier to start with cutting the fuel bill.

Case in point: General George Patton's Third Army of 400,000 men used about a gallon per man per day advancing across Europe in World War II. Today, with about a third of that number, our troops in Iraq were using four times as much fuel.

Some estimate that to keep ships sailing, tanks rolling, Humvees humming and bases operational, the military uses about one-third the nation's oil supply.

Imagine how you could cut those costs by not having to fly sorties with fuel-guzzling planes over hostile territory to gather intel. To make a dent in that consumption would have quite an impact.

With the use of UAVs and the optics systems that FLIR builds, there's no doubt FLIR will have a long and profitable relationship with the military and intelligence sector, regardless of tighter budgets, because it's in strategic sectors that it will continue to grow.

In fact, just this week FLIR announced it had been awarded an indefinite delivery, indefinite quantity contract (the best type of military contract) from the U.S. Army to support the MEDEVAC program.

The contract is valued at $38 million, and is for spare components for Star SAFIRE II stabilized multi-sensor systems installed on the Army's fielded MEDEVAC Blackhawk helicopters.

The company also announced it has received a $17.9 million delivery order from the U.S. Navy Expeditionary Combat Command (NECC) for its SeaFLIR maritime imaging systems. The systems are expected to be deployed on U.S. Navy Patrol Boats.

But with FLIR that's only a small part of the greater story...

Source :http://moneymorning.com/2012/05/25/flir-systems-nasdaq-flir-grow-your-portfolio-with-the-eye-in-the-sky/

Money Morning/The Money Map Report

©2011 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2014 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Free Report - Financial Markets 2014