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TASER International Inc. Message Board

  • dhb_amor dhb_amor Nov 21, 2004 8:24 AM Flag

    DHB the NEXT TASR.....why DHB wins....


    1.) DHB established a new high after the maker of body armor announced a new deal last night. The U.S. Army has ordered $239.4 million in body armor, which brings total defense orders to $381 million for the last eight months and the company's backlog to $415 million. Those are nice numbers for a company that has trailing annual sales of only $260 million. To make matters even better for those long the stock, a number of investment websites (i.e. Motley Fool & RealMoney) are putting fuel on the momentum fire by touting the stock every chance they get. With everyone looking for the next Taser (TASR), you have to at least put this stock on your radar.

    2.) DHB Industries (DHB: sentiment, chart, options) is divided into two sectors; armor and sports. DHB's Armor Group makes flak jackets and other bullet-resistant vests and body armor from resistant materials such as Kevlar. The company produces both concealable and tactical (worn over clothes) armor. Customers include both state and federal law enforcement agencies, and the U.S. armed forces. The company's Sports Group sells athletic pads, braces, and supports through retail stores. The security gapped sharply higher this morning, taking out resistance at the 17 level (site of its August high). The shares have rallied along the support of their 10-week and 20-week moving average since January 2003 and are now trading at a new all-time high. The equity's has also enjoyed the support of its 10-month moving average since April 2003.

    Despite the security's stellar technical performance, the shares continue to hover below the Street's radar. According to Zacks, only two analysts currently follow the shares (both with "buy" ratings). Any additional coverage from the Street could add some lift to the shares. Short sellers are starting to capitulate, as the number of DHB shares sold short dropped by eight percent in October to 4.1 million shares. However, this accumulation of bearish bets still accounts for more than 17 percent of the security's float. An unwinding of these pessimistic positions could also add some fuel to the security's rally. Our Equity Scorecard (available via Schaeffer's Gold currently awards DHB a rating of 7.50. This enticing combination of lingering skepticism against the stock's growing technical strength has bullish implications from a contrarian perspective.

    3.) We are focused on the fact that near-term prospects are exceptionally strong. The company is expanding manufacturing operations, it keeps winning major contract awards and analysts keep raising earnings expectations. DHB Industries is currently considered a strong buy stock by Forbes Growth Investor.

    4.) But sometimes a company's sales growth suddenly quickens rather than slows � a sign that some part of its operations has gone dramatically right. It could be a successful ad campaign or a popular new product, and shares often get a boost right a way. Such improvements, though, usually occur over several quarters rather than just one. So shares of such companies are often worth a look, even when they're already up. For example, shares of DHB Industries (DHB) had already gained 236% in the preceding 52 weeks when we featured the body-armor maker in our last accelerating sales growth screen on Oct. 6 ("Barriers to Entry"). That hasn't stopped the stock from tacking on another 9% gain since then.

    Use our and the recipe listed to the right to run your own accelerating sales growth screen anytime you'd like. Recently, our search produced a list of 12 companies, including UTi Worldwide. DHB ranked #2 of 12 companies.

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