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Harman International Industries, Incorporated Message Board

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  • Apple frivolously, irresponsibly threw over 3 billion at a recent newcomer/fluke haedphones seller, Dr. Dre's Beats. What the company lacks in profit margin for overrated headphones (except by Amazon consumers, who routinely pan them), headphones now being sued as Bose knock-offs (just what Apple needed--to spend billions on the opportunity to incur a massive fine--double reverse-indemnity for Apple). These negatives supposedly will be made up for by Dr. Dre's "connections" with "Hollywood insiders" (apparently no one on the Apple's aging board has heard that one).. A huge embarrassment, not to mention loss, for Apple. Look for them to come after industry-leading Harman Industries next. Two years ago Apple could have bought the company whose "iSub" was inspired by Apple as well as the "Harman Kardon Sounsticks, the nicest complement to an iMac. If not a buy-out, Apple will establish a major share position in Harman, which is also the industry leader in supplying quality audio to automobiles (how could Apple be so tone-deaf, unaware, dumb (and deaf). Are Cook's advisors fearful of telling him the score? Of course they are. They're older than him, desperate to "tune in" rather than "drop out."

    Even at a loss, and a set-back, Apple will in the long run recover thanks to Harman, which gives Apple some control of the actual sounds emitting from their iTunes catalog and mobile devices. Harman gives them the whole world of audio, from a single consumer's iPod to the most luxurious automobiles to the world's largest theaters. Every true "insider" knows that JBL "rules" in the music world. (Even Tivoli, a descendent of the East Coast's Henry B. Kloss, responsible for what was revolutionalry in the '60s--Acoustic Research, the AR2 and 3, hermetically sealed, low-efficiency, high-fidelity bookshelf speakers--would have been infinitely preferable to, who?, Beats!?!

    Inevitably, Apple will wake up, and holders of Harman stock will be the winners.

  • Reply to

    Charles Payne mention

    by abe7475 Jul 19, 2014 1:20 PM

    Thanks for the info. Hope it's breaking out. Failed breakout so far, but I believe it will push on through. Targeting 130-135 range by year end.

  • He recommended the stock today on Cavuto on Business. Mentioned a product or technology that they have. Not sure what he was referring to. Said the stock was breaking out.

  • Reply to

    Trading range

    by countryinvestor Jun 20, 2014 4:25 PM

    And there's the breakout.

  • Any thoughts on how long we will stay range bound and consolidate here? Consolidation has been going on since February which I view as very healthy. I see us staying range bound through the summer and then breaking out this fall. Looks to me like it usually rises between 20 and 30 percent after consolidation. That would put us up around 135 or so for the next leg.

  • For Harman to trade at 29 times annual earnings, shares trade at a rather steep multiple. Shares have risen some 35% this year alone and have more than doubled over the past year.

    Underlying these strong returns is the solid operational performance and the fact that the company has delivered very strong growth recently. The original 2016 outlook called for revenues of $6.05 billion, but expectations have risen considerably given the strong performance this year. Even if I foresee revenues of $6.5 billion in 2016, EBITDA is seen around $850 million if the company meets its EBITDA margin target of 13%.

    Given the current net earnings/EBITDA ratio, this could translate into GAAP earnings of around $400 million which makes shares not very cheap at 18 times earnings two years ahead in time. Important to consider, the visibility of Harman's future growth is very high with $19 billion of orders in the backlog while the strong balance sheet allows for greater shareholder payouts. Harman's current quarterly dividend of $0.30 per share provides investors with an annual dividend yield of 1.1%.

    While the company is making the right moves in targeting growth, margin expansion while making smart acquisitions, the valuation is too steep for me at the moment.

    I remain on the sidelines, but would be buyer on serious dips in the $80-$90 range.

115.10+0.04(+0.03%)Aug 28 4:05 PMEDT

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