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FLIR Systems (Nasdaq: FLIR): Grow Your Portfolio With The "Eye in the Sky"
Smile…. you're on the 21st century's version of Candid Camera.
Whether you're an Islamic troublemaker in North Waziristan, a rowdy football fan, or a hopeful immigrant trying to slip across the border, the eye in the sky sees everything.
In the halls of power, there's a term for this. It's called the surveillance society. And it is one of the biggest trends inside and outside the military industrial complex.
Also known as ISR – intelligence, surveillance and reconnaissance-it's an outgrowth of more than a decade of war in Iraq and Afghanistan. It's a place where everyone has heard of unmanned aerial vehicles or UAVs.
But while UAVs are an amazing technology in themselves, they aren't very effective unless they can report on what they see -that's the ISR piece of the puzzle.
And that's precisely where a company like FLIR Systems Inc. (Nasdaq: FLIR) comes in. FLIR provides the optics and equipment to make it all happen both in the air and on the ground.
What Analysts are Missing About FLIR Systems
Founded in 1978, FLIR has developed a reputation for building world-class equipment.
And now that these systems have proven themselves in some of the harshest conditions on Earth, the company is expanding to a broad number of other applications in market sectors outside the military.
However, looking at FLIR's chart, it's an understatement to say that this specialty defense imaging stock has been hit hard by the budget cuts and the winding down of our presence in Iraq and Afghanistan.
Buy, Sell or Hold: Why Now is the Time to Buy Bacterin International
Holdings Inc. (AMEX: BONE)
Getting old isn't all it's cracked up to be.
When I was young, dumb, and all too daring, I took chances that in hindsight were pretty boneheaded, and I'm still paying for them.
Once I even jumped off the roof of my grandmother's house, thinking I was going to catch the storm drain as I dropped by. Why I believed that I'm not sure.
Instead, I ended up in the hospital needing five reconstructive surgeries that included bone grafts donated from my own hip.
In fact, today I still suffer from a dull ache in the same hip, which is a decent trade off because I can still use my arm.
Fortunately, medicine has come a long way since the day I stood on that roof eyeing up that gutter.
Today someone in the same situation would turn to a biotech company to provide the material needed for that surgery, not a human donor.
This is one of the reasons I like Bacterin International Holdings Inc. (AMEX: BONE)
Breaking Down Bacterin
Bacterin designs, manufactures and markets revolutionary dermal and skeletal health products, bone graft material, biological scaffolds and related medical devices.
They also design and produce bioactive, anti-microbial coatings for implantable devices that act as barriers to infection.
Their total potential markets in the United States alone are estimated at over $8.5 billion. Of that, Bacterin has gained a small but growing percentage.
But here's what more impressive:
Buy, Sell or Hold: Hecla Mining Co.'s (NYSE:HL) Silver Moment
I think that presents some value for investors willing to take a contrarian view.
As I write this, Hecla Mining is down 50% in the past 52 weeks. I honestly find this situation a headscratcher − especially in light of where silver prices may be headed.
What's more, the company is sitting on a horde of cash and carries no net debt. This means the company is stable and able to function without access to capital markets.
As an investor, I consider this situation nearly bulletproof.
Notice that I said "nearly" – not completely.
There is one thing that can severely damage a company with a solid balance sheet. It is called lawsuits.
Unfortunately for Hecla, they had a bad 2011 in that regard.
The company had two fatal accidents at a producing mine with an additional third event that injured seven more workers.
These events caused the Mine Safety and Health Administration ( MSHA) to close the shaft in question and require the removal of built-up material before Hecla can resume operations.
Known as the Lucky Friday mine, it may be shut down throughout 2012.
In the aftermath, a specific group of investors became so angry with management's disclosures relating to these fatal accidents that they filed suit.
This bad luck streak in the mines and in the courtrooms has hammered the stock price to a point I now find cheap, even considering the potentially damaging lawsuits.
In short, when I look at Hecla Mining today, I see value investing is at its best.
I love to find an out-of-favor stock where the fundamentals are still strong and the company is already profitable.
Buy, Sell or Hold: The Real Winner in the Yahoo (YHOO) vs Facebook Fight Could Be Augme Technologies (AUGT)
I love to find asymmetric risk/reward scenarios in the market.
You can do that with a small company which has the ability to unlock a large payday – and I believe I have found one with Augme Technologies Inc. (OTC: AUGT ).
To understand the value of mobile marketing company Augme, first we have to look at what Yahoo! Inc. (Nasdaq: YHOO) has done to Facebook.
Ripples shot through the technology space last week when Yahoo launched an all-out patent assault against Facebook.
Yahoo is demanding billions in licensing fees for the use of its technologies.
Yahoo has asserted claims on patents that include the technical mechanisms in Facebook's ads, privacy controls, newsfeed and messaging service.
In simple terms, Yahoo is getting ready to try and bring Facebook to its knees through legal means.
"Yahoo has a responsibility to its shareholders, employees and other stakeholders to protect its intellectual property," a Yahoo spokesman said in an e-mailed statement. "We must insist that Facebook either enter into a licensing agreement or we will be compelled to move forward unilaterally to protect our rights."
Should Yahoo sue Facebook, it would mark the first major legal battle among technology giants in the social media sphere.
Yahoo's patent claims come hot on the heels of Facebook's IPO announcement to raise money that would roughly give them a $100 billion valuation.
This lawsuit threat can only have Facebook's management, its bankers and lawyers rushing to secure some sort of defensive arsenal to fight off this and other pending attacks.
While this battle has captured everyone's attention, what I find more interesting is Yahoo's seemingly blatant hypocrisy.
Yahoo appears to be throwing rocks from its glass house at the neighbors by wanting to make others pay for the unauthorized use of its patented technology.
What Yahoo is seemingly trying to ignore is that it, too, has been accused of the same type of intellectual property theft – and the accuser is Augme Technologies.
Buy, Sell or Hold: Buy the Dips in Gold (NYSE: GLD)
SPDR Gold Trust (NYSE: GLD) experienced a major pullback on Leap Day this week, dropping almost exactly 100 points on the day.
This happened while the European Central Bank (ECB) offered its second tranche of three-year Long Term Recapitalization Operations (LTRO).
The sell-off in gold on Wednesday is a related sign that liquidity is currently in demand.
But you only have to look at gold's big move up since the start of 2012 to know this stage of the move was unsustainable short-term.
It's why investors shouldn't be surprised by the pullback, and should use this latest move down to increase their long-term exposure to gold.
This dip is a buying event and nothing more.
The pullback in the price of gold also hit equities along with bonds and some other commodities.
Even so, it appears that the ECB has provided enough liquidity to fight off the near-term fears.
Once these funds begin to work their way through the system, I believe they will be bullish for commodity prices.
Over time, banks will eventually put that capital to work, with an eye toward generating a positive rate of return on it. One of those avenues will undoubtedly be gold.
Here's why, along with a bit of background.
Amazon.com Inc. (NASDAQ: AMZN) Will Get Burned by the Fire
Amazon.com, Inc. (NASDAQ: AMZN) has lost its focus.
The pioneer of clicks for sales has decided it wants to be the next Apple Inc. (NASDAQ: AAPL).
But there's a big difference between selling other people's products for a profit on a Website and becoming the provider of custom hardware solutions for retail buyers.
This transition isn't going to end well.
The Amazon Fire is a chopped-down tablet designed to compete with the iPad. There is a world of difference between the two products and where they are in their lifecycles.
Amazon is selling its Fire tablet for half the price of the iPad, which looks great on the surface. When you compare exactly what each product brings to the table, though, it's obvious the iPad 3 (due in mid-March) will douse the Fire.
The iPad 3 will have a slew of hardware enhancements over the last iPad, and while iPad 2 was a generational upgrade over the original, it still caught the world by surprise.
The tablet market has tried before to build a better-valued product to compete with the iPad, which is where the Amazon Fire comes into play.
The reality is that the Fire is a first-generation equivalent to the iPad but with smaller physical size and limited features.
The Fire is easily two years behind the curve in the Apple-equivalent build cycle of features for same purchase price. Two-year-old technology is an eternity when you're competing against the best product designers on the planet.
This is important because the bar continues to rise, and Apple can start to sell a similar product with a premium feature set at a slight markup, destroying Fire's niche.
This weakness is a terminal issue in my opinion.
When you think about it, Amazon is subsidizing the construction and sale of the Fire, with estimated losses on each unit, as it deploys them around the world to users.
This makes me wonder when the pain of the Fire will cause Amazon to adopt a less volatile business plan.
So it's time to sell Amazon.com Inc. (NASDAQ: AMZN) (**). The Fire will continue to burn investors in Amazon for quarters.
Buy, Sell or Hold: BOK Financial Corp. (Nasdaq: BOKF) – the Only Bank Safe Enough to Buy
I was on the road lately and had the chance to drop into the Bank of Oklahoma's main branch in Oklahoma City. Upon entering, it was obvious these were prudent, old-school bankers. No matter the floor I was on, quiet and calm ruled.
That's the pace of banking I like.
Indeed, there are two types of banks in the world: The old-school banks, and the modern, frenzied versions that blew up in 2008.
Obviously, the latter are rightly hated in my opinion. The excessive leveraging of the bubble era has left the world's banks severely weakened. Since 2007, the non-stop deleveraging going on in the global economy has left banks on life support, propped up by their national balance sheets. And the velocity of money has slowed to a crawl.
Yes, in most cases the banks have paid back their TARP funds – but the stigma remains.
Citigroup Inc. (NYSE: C), Bank of America Corp. (NYSE: BAC), and Wells Fargo & Co. (NYSE: WFC) all needed bailing out. And both Goldman Sachs Group Inc. (NYSE: GS) and Morgan Stanley (NYSE: MS) had to convert their charters to bank status to hide from the reality of their own numbers.
They blew up. It's that simple. Wall Street failed.
However, not all banks blew up, failed, and needed government aid to keep their doors open.
I've been watching Bank of Oklahoma's parent for a while now, even before my visit inside their building, and they're one of the banks I consider a solid institution.
This is a contrarian bank. They skipped TARP. They didn't need access to the capital, even if markets were locked up. Their dividend rate is still going up and their earnings are growing.
So it's time to buy BOK Financial Corp. (Nasdaq: BOKF) (**).