Although Armor Holdings (AH ) missed its third-quarter earnings forecasts, driving the stock down from 55 to 51 on Oct. 20, the Street remains upbeat on the big maker of armored military vehicles--mainly the Humvee--and aircraft armor and safety systems. The stock has since edged back to 55.05. Michael Metz, chief investment strategist at Oppenheimer, says there's talk that Armor may be acquired by the likes of Lockheed Martin (LMT ). Some 74% of Armor's sales come from its aerospace and defense unit, which supplies systems to the U.S. military and aerospace and defense contractors. It is the sole supplier of blast-protection systems for the Humvee. Ivan Feinseth of Matrix USA, who has a "strong buy" on it, puts its "economic value" at 75. Worldwide demand for Armor vehicles and body shields continues to rise in military and private markets, he says, and Armor is the leader in both. Armor declined comment.
Note: Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them.
By Gene G. Marcial