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FLIR Systems (FLIR) Has Fallen 31% in Last One Year, Underperforms Market

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Alex Smith
·4 min read
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If you are looking for the best ideas for your portfolio you may want to consider some of Upslope Capital Management's top stock picks. Upslope Capital Management, an investment management firm, is bullish on FLIR Systems Inc (NASDAQ:FLIR) stock. In its Q2 2019 investor letter – you can download a copy here – the firm discussed its investment thesis on FLIR Systems Inc (NASDAQ:FLIR) stock. FLIR Systems Inc (NASDAQ:FLIR) is the world's largest commercial company specializing in the design and production of thermal imaging cameras, components and imaging sensors.

On July 15, 2019, Upslope Capital Management had released its Q2 2019 investor letter. FLIR Systems Inc (NASDAQ:FLIR) stock has posted a return of -30.9% in the trailing one year period, underperforming the S&P 500 Index which returned 13.4% in the same period. This suggests that the investment firm was wrong in its decision. On a year-to-date basis, FLIR Systems Inc (NASDAQ:FLIR) stock has fallen by 31.7%.

In Q2 2019 investor letter, Upslope Capital Management said the fund posted a return of 7.8% in the second quarter of 2019, outperforming the S&P 500 Index which returned 4.30% in the same period. Let’s take a look at comments made by Upslope Capital Management about FLIR Systems Inc (NASDAQ:FLIR) stock in the Q2 2019 investor letter.

"New Long – FLIR Systems (FLIR): FLIR is a leading developer and producer of sensors, cameras (infrared), and systems “that detect people, objects and substances that may not be perceived by human senses.” Its end-markets are diverse, but skew defensive: 40% of earnings comes from “government and defense.” Elsewhere, FLIR products are used for anything from gas/leak detection, marine navigation, to infrastructure and traffic/highway solutions.

Why do we like FLIR today? First, it has a solid and defensive base business, which has a history of non-cyclical growth and profitability. Second, there is a possible growth inflection in the coming years on both the defense side (starting to bid for larger contracts) and non-defense side (FLIR is the only “automotive-qualified” provider of infrared cameras – the prospect of a major shift/acceleration in the use of “autonomous” driving technology could eventually be significant for FLIR). And, third, it’s still early, but there are signs that financial performance is improving under new management (joined mid2017). 2018 closed with the best free cash conversion and ROIC for FLIR in many years."

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In Q2 2020, the number of bullish hedge fund positions on FLIR Systems Inc (NASDAQ:FLIR) stock increased by about 12% from the previous quarter (see the chart here), so a number of other hedge fund managers seem to agree with FLIR's growth potential. Our calculations showed that FLIR Systems Inc (NASDAQ:FLIR) isn't ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds' poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. You can subscribe to our free enewsletter below to receive our stories in your inbox:

Disclosure: None. This article is originally published at Insider Monkey.