ARMOR HOLDINGS

I want to draw your attention on this stock (AH)
Armor Holdings is engaged in making military/defense goods for governments and public safety organisms. AH also has a subsidiary (Centigon) responsible for making armored cars to sell to the public covering a wide array of models, from a bullet proof windows Volvo S80 to a nuclear missile resistant Mercedes Maybach.
One important aspect of AH is that it is selling at a relative discount when compared to its peers in the defense industry. In fact AH P/E is around 16 whereas the industry average is approximately 23.
AH is has been considerably growing in the past years, having a average 5 year growth in sale of 63%. Yes, 16 P/E and 63% average growth rate... Mr. Lynch would probably like this one, refering to Mike's post.
Even though the company is a holding, it is operating at a margin of 30% when compared to an industry average of 17.31% (still 5 year average)
Heres a little graph for the trend line analyzer... the S&P 500 is the gray line

I want to add a FCFE valuation for the company. This analysis was done using bloomberg.

Using a 3 stage growth model, the estimated instrinsic value per share is: $85.13. The last price of the security was $61.70. The analysis used a high growth period of 3 years @ 22%, which then declined for 7 years to reach a stable growth of 2%. I do not expect the stock to reach its intrinsic value within a short term time frame. However, I do expect the price to appreciate significantly both on a short term and long term basis.

One of the main factor to consider would be the war in irak as well as the worldwide political climate with respect to the USA. There is no sign of an retreat of the US troops from Irak. The defense budget is forecasted to increase by approximately 5% in 2006 to reach $419bil. The bugdet has constantly increased since 2000. The budget totaled $267bil. back in 2000.