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S.A. Advisory E-Mail Update
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ANOTHER GREAT MILITARY PLAY THAT DESERVES TO BE DOUBLE THE CURRENT PRICE- FORCE PROTECTION INC. (FRPT) $3.60 |
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THIS COMPANY'S MINE RESISTANT VEHICLES SAVES LIVES IN IRAQ & AFGHANISTAN RECEIVED CONTRACTS FROM 10/06-5/01/08 TOTALING $2,300,000,000.00 CURRENT BACKLOG IS OVER $1,000,000,000.00!
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May 04, 2008
FORCE PROTECTION (FRPT) $3.59 The company primarily produces MRAP vehicles- Mine protected ambush resistant vehicles, which are used to protect our troops from IED's (Improvised Explosive Devices) used in Iraq and Afghanistan by insurgents!
The balance sheet is clean with around $70 million in cash and no debt. Fully diluted it appears to be around 69 million shares
outstanding. As of April 10th 2008 it appears that there is 9 million shares short! This is huge when you consider that management
holds 10 million ! This is potentially very Bullish fuel for frpt when all of their ducks line up in order!
The major problem we have with frpt is that the growth of this company was overly explosive and financial controls of the company ran amuck- yielding to a reshuffling of management , lawsuits by cry baby investors and now late filings ( Dec 31st 2007 10k and
within days the March 31, 2008 10q). Recently a new auditor has signed on to redeploy the 2007 books, but when the final document
becomes available even Allah dears not guess the outcome!
For the 9 months ending Sept 2007 rev reached $441 million and net income/sh was .34 based upon fully diluted 69 million shares outstanding. It is estimated that for 2007 rev came in at $700+ million and net of around .50!-- This is only an estimate and
reliability is unknown. For 2008 rev is estimated at $1 billion and net of .72/sh. It is obvious that the backlog and business is
booked!
Visit www.militaryindustrialcomplex.com and "click" the word companies, then scroll and find Force Protection and you will review that as of Oct 2006 to May 1, 2008 the company has been awarded $2,200,000,000.00 in contracts!!!The company continues to receive contracts and potential business seem to be robust. The Canadian government appears ready to commit $60 million to purchase
Cougars/Buffaloes ( these 2 vehicles are produced by frpt) MRAP 's. Please review information concerning this potential contract-
www.kingscorecard.canadaeast.com . As of May 2nd 2008 President Bush has introduced a $70 billion defense funding bill (the Dems & Libs will hate it because they want us to cut and run!)-part of the bill funds $3 billion to deal with roadside bombs and $2.6 billion to airlift "new" mine resistant vehicles into the war zones!
This just means more and more potential business for frpt and other related companies! It appears to www.saadvisory that there is
plenty of business to go around for all competing companies. From our research it appears that the Italians, Canadians and
English are just a few allies that are rapidly upgrading military offensive vehicles, transport type vehicles and defensive type vehicles that all fall under the MRAP umbrella. Please review the website of frpt for additional information concerning all of their vehicle types. The site www.forceprotection.net
At current prices, $3.59 we see little downside risk- frpt has $1.00/sh in cash as of 09/07 and a stated BK of $3.57, the company's backlog is huge and growing and new management is on the way to correct the errors that prior management had caused. The lawsuits are so typical and we don't know the outcome except as the stock moves higher the lawsuits gain less & less traction! We cannot answer the question about how long it will take to release the 07 1OK and now 08 10Q. for Q1--if major problems surface then frpt could be forced to de-list from the Nasdaq- this is a remote possibility.
It is in our opinion that frpt could also become a takeover target such as GD might be interested-- it would only cost them a song and a dance to afford frpt! With a market cap of only $250 million and a growing backlog of over $1 billion it is easy to see that frpt is a juicy morsel that could be "cherry" picked at 1/2 sales which could equal a $7.00 takeout price!
The uncertainty about the financial is the real "monkey", but in our opinion has created the value disconnect in share valuation-- If everything was perfect then frpt could and would trade at $10.00/sh.
The more perfect the world the more expensive the it costs to live there!
We rate frpt with a strong buy rating-even though there is filing/lawsuit risk- the business model/product desirability out weighs
the uncertainty and we believe that we can maneuver the current mine field of IED's (Investor Explosive Details)
INVESTMENT NOTES:
1. IEC.L IMPERIAL ENERGY. IF YOU ARE A SHAREHOLDER OF IEC.L SHARES IT IS IMPORTANT THAT YOU VISIT THE WEBSITE WWW.IMPERIALENERGY.COM AND REVIEW THE "RIGHTS" OFFERING THAT IS GOING ON!
You must become aware of the procedure of selling or disposing of your "rights" before the end of May 08 deadline--again go the website and read the documents.
2. aljj.pk---earnings for the this "sleeper" steel company for the 2nd Q should be released any day now and we are loooooking for .04-06/sh in net income/sh --We are assuming that this company is going to earn around .25 for 08 ---stock hit a new all time high of .40 on May 1, 2008---should go higher!
3. AAI around $3.64 loooks cheap for an Airline that has "crashed"--just raised some $150 million
4. YHOO-MSFT LETS YHOO BLOW IN THEWIND FOR NOW! ANTICIPATE THE STOCK TO BLOWUP ON MONDAY MAY 5TH 2008--WOULD BUY AT AROUND $20--CLOSED ON MAY 2, 2008 @ $30.00 AND OFFERED $33.00, BUT YHOO GOT GREEDY AND THE SHAREHOLDERS GOT A SCREW INSTEAD!
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S.A.Advisory
William Velmer
Job Title
phone:
9499229986
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