“The Only Vehicle that’s Safe in Iraq”

By Travis Johnson, Stock Gumshoe, March 22, 2007

[corrected to fix silly errors that were noted in the comments, sorry. I kept the comments so you can see what a flake I am on occasion]

A reader sent this one in a little while ago, but it’s a bit dated — from a New America Investor newsletter ad from Brian Hicks at the end of last year …

Here’s the intro:

“Everybody wants these vehicles. The British ordered 85 over the summer. The Iraqi Army put in an order for more than 300. And last Friday the US Marines signed a $214 million contract for an additional 280.”

Investors who have held since January of last year have enjoyed “1289% returns”

The shares are priced at 11.50 (four months ago), but the author says he “won’t sell until it hits $32” (If you care about this one, don’t worry, that’s still a double from here even though you missed the ad in November).

I think the strongest sell lines are these: “Discover how America’s IED solution could put an extra $41,120 in your pocket before next Thanksgiving”

and …

“I’m talking about a return of 412% in as little as 11 months”

So this is definitely a hard sell … if only you’ll subscribe to New America Investor, you can find out about this company that’s going to quadruple “overnight”

Or you can just check in with your favorite Stock Gumshoe … who will tell you that the key product they’re talking about is absolutely the Buffalo, a wacky looking mack truck of a thing that clears mines and is heavily armored. The company also produces the Cheetah, which is (did you guess?) a faster heavily armored car, as well as some other related war vehicles.

And the orders are indeed through the roof of late … which is why the price has already just about tripled from last September or so.

So that’s really enough to find it yourself, but I’ll save you the effort — the company is Force Protection (FRPT).

And they’ve been a stock market darling — they really have gone up more than a thousand percent in a bit over a year, and business appears to be pretty spectacular, with orders popping up all over the place for this relatively new product. And who doesn’t see the appeal of better armored vehicles and mine clearance vehicles for Iraq? To put a little cherry on top, they also just recently moved to the NASDAQ (in January), so that provides a little broader market for the company.

So it’s not a crazy stock, but it is a pretty expensive one … and it is a company that has experienced wild growth, so who knows how they’ll hold up. I don’t know if it will be a good investment, though I can pretty much promise it won’t be as good this year as it was last year …. and I know that you don’t have to spend your hard earned cash on a newsletter subscription just to find out the name when your favorite Stock Gumshoe is around.


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Anonymous
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Anonymous
March 22, 2007 1:06 pm

You need to do a little better investigating. Force’s brute of a vehicle is not the GIRAFFE, it’s the Buffalo. And their facilities are in South Carolina, not Buffalo, NY. If you’re not going to even do a smidge of investigating, then don’t talk about the company.

Anonymous
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Anonymous
March 22, 2007 1:22 pm

Not only that, but just a cursory flyby of their website: http://www.forceprotection.net would have prevented you from sounding foolish.

Travis
Guest
Travis
March 22, 2007 1:46 pm

Sorry, I’ll fix those — you’re right, of course. I mixed up the Buffaly, NY with the product name (this is what happens when you do this in the middle of the night). Apologies. I have no idea where “Giraffe” came from, I must have the Zoo on my brain.

But the company’s correct, at least — and that’s all I claim to provide.

Nick M. H.
Guest
Nick M. H.
March 22, 2007 10:18 pm

Who cares if the name of the vehicle was rhinocerous crap or elephant sh!t?! Big deal. All I care about is the name of the stock/company. Anyone who complains about irrelevant crap like that needs to get a life and do the hw themselves if they cannot appreciate the time and effort that another person puts in. Keep doing what your doing Travis!

Anonymous
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Anonymous
March 28, 2007 7:53 pm

Travis, sorry about the snarky tone of my comments. They didn’t sound quite as antagonistic when I wrote them. I appreciate the corrections, this is a solid company with a big future ahead.

And nick m.h: you’re a moron. And I mean that as antagonistically as it sounds.

Anonymous
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Anonymous
April 8, 2007 8:44 pm

I don’t know if it’s the “only vehicle that’s safe in Iraq”… Didn’t I just hear the kid from Indiana on Cramer talk about Spartan motors making a better mineclearing vehicle… ticker symbol SPAR?

Or do they make parts to the same unit? Anyone know anything about this?

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Anonymous
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Anonymous
April 8, 2007 8:46 pm

Either way, April is traditionally a good “millitaristic/war/defense” month, so I’ll be looking into this one… Thanks for the find as always Travis

Anonymous
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Anonymous
May 1, 2007 3:50 pm

I’ve been in FRPT (formerly FRCP.PK/FRPT.OB, now Naz) since early ’04, when they were building their vehicles one at a time in a “cell assembly” system, much like building a car in a repair bay behind an auto dealership showroom.

This stock is transparently manipulated (watching the B/A bounce around is the stock board equivalent of an LSD trip; usually the Bid is below the ask, but can be counted on to light up like a pinball machine the last few minutes of trade), but I bought cheap so I can afford this manipulation as big things are just around the corner.

The MRAP (basically, FRPT’s Cougar) is what the veto for funding our troops(plus the pork and a time-table for defeat), only Bush’s second, is all about. The bright side: they’re producing at full capacity now, while making several acquisitions recently.

Currently, 3 categories, from Cat I (smallest) to Cat III (largest; FRPT’s Buffalo has a lock on this category; 180 vehicle order (at $750k per plus 22% estimated spare parts – or ILS if you prefer acronyms – should result in about a million per.

FRPT has formed a joint venture with Gen Dynamics to produce these MRAP (Mine-Resistant Ambush-Protected) vehicles as FRPT was dead in the water for most of ’05 as they went to an assembly line system. The joint venture, Force Dynamics, recently split a $490 mill order 50-50. The stock tanked on this news.

FRPT also has irons in the fires of Cat I and Cat II. If the Cheetah doesn’t become the hummer (destroyed in explosions, where FRPT vehicles get direct hits, drive back to base, then are back in the field in a couple of days) replacement, chalk it up to the Good Ol’ Boys network in the DOD.

Strong point: they have the license for the v-shaped hull, which is currently being “borrowed” by other co’s, so the possibility of a large settlement isn’t out of the question.

Check ’em out at the Darlington (SC, where FRPT is located in Ladson) Avenger 500 race May 12. The Cheetah (clocked at 105 mph), the Cougar (which has about 5 versions – and acronymns! – including an ambulance), and the Buffalo, a behemoth with a 30-foot robotic arm with a spork and spike at the end (replaceable!) will be introduced at this race and are supposed to take a lap or two.

Troops and the DOD call the Cougar “the Gold Standard” for armored vehicles. One soldier noted that when they ran over an IED, exploding it, “the CD player might skip.”

You can’t buy at $2.50, anymore, but it’s at 20.99 right now (11:30 AM EST 5/2/07)…and as deliveries continue (timely delivery has been a problem in the past, hence the joint venture with GD, while having deals with BAE and several other def giants), those who follow this stock look for $30+ in the mid-term. At least.

Warning: Investor Frank Kavanaugh (without whom there wouldn’t be a there there) has an uncanny knack for selling off chunks of stock at exactly the wrong time and killing rallies, using pre-planned sell programs.

These guys have done wonders since ’04, but if I were to judge them from the recent big red days we’ve seen recently (especially the price action), I would probably run from the room screaming. However, I have ridden in a Cougar, toured the plant twice, and these guys have exactly the right products at exactly the right time.

Put this on a watch list if you don’t buy now. That way, you can check at the end of the summer to see what you missed.

I have a son in the Army. These are the vehicles I would want him to be transported in.

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Rich
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Rich
July 25, 2008 5:29 pm

Good call GS.
Is timing everything, or time? FRPT went from 15 to 31 to 1 now. SPAR went from 18 to 24 to 6 maybe headed for le