Armor Shines Bright

With the heinous Sept. 11 attack on America, worldwide fear about security has heightened. Predictably, companies that provide protection against terrorists are back on the Street's radar screen. One such outfit is little-known Armor Holdings (AH), which has a growth story--with a takeover twist.

Armor, a big maker of security gear, also offers security-planning and risk-management services to 60 heads of state and hundreds of executives in 80 countries. Its services are designed to prevent kidnappings, assaults, and terrorist attacks. In addition, the company puts armor on vehicles for clients such as the State Dept., the U.N., and the World Bank.

Its stock has been a winner--shooting up from 8 in April, 2000, to 19 a year later. But it tumbled to 11 on May 21, 2001, when Armor announced a restructuring charge related to the purchase of Kroll's security unit. The stock has since risen to 14. The acquisition should hike Armor's annual sales by 50%, notes Charles LaLoggia, editor of The Superstock Investor in Rochester, N.Y. The stock's drop was an opportunity to buy the stock on the cheap, he says.

The security business has been consolidating. LaLoggia thinks Sweden's Securitas, which in the past two years has acquired two U.S. companies--Pinkerton's and Burns Security--could go after Armor, too. But Tyco International may beat Securitas to the draw, he adds. Armor is worth 25 in a buyout, says LaLoggia.

Bear Stearns analyst Peter Barry, who rates Armor a buy, sees earnings of 91 cents a share in 2001 and $1.25 in 2002, up from 86 cents in 2000.

By Gene G. Marcial

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