Harris (HRS): Specialty Communication Equipment Provider to Defense, Government and Private Sector

Harris (HRS) is worth investing in:

1. Harris (HRS) is a Specialized Communication Equipment Provider that caters to Government, Defense, and Civilian Organizations.
   
2. Harris is levered more to government and defense spending than consumer discretionary products.
   
3. Harris operates four main segments:
   1. Government Communication Systems (46.2% of 3rd quarter fiscal 2007 revenue)
   2. RF Communications (28.2%)
   3. Broadcast Communications (12.8%)
   4. Harris Stratex Networks (12.8%)
   
4. Market Cap: 9.16B
   
5. Forward PE: 16.21
   
6. 5 Year Estimated Growth Rate: 27%
   
7. Price Earnings to Growth Ratio: 0.60 (under 1 is very cheap!)
   
8. Current Ratio: 1.16 (anything over 1 is okay)
   
9. 80% domestic, 20% international.
   
10. Upgrading military communications and infrastructure is key driver.
    
11. Analog to Digital TV is a key driver.
    
12. Microwave communications needed for 3G cell technology.
    
13. Broad product line and high government contract win rate (60%, and 80% in recent quarters).
    
14. Since products are very specialized, Harris doesn't really have direct competitors.
    
15. Harris remains subcontractor to companies such as Boeing (BA), and Lockheed Martin (LMT)
    
16. Recently Raised Dividend by 36%
    
17. $600 Million Buyback announced May 2007.
    
18. Company is currently at or near its 52 week high.
    
19. From the companies 10-K:
    

    
    Defense Markets: The U.S. President's budget proposal for the U.S. Government fiscal years 2008 to 2012 focuses on achieving a balanced budget while addressing the nation's most critical needs and the continuing trend by Federal agencies to reduce costs by outsourcing IT and communications related operations. The Administration's priorities include a continued and accelerated commitment to modernizing the military to focus more on the needs of its combat commanders and to develop portfolios of joint capabilities. As a result, the U.S. Government remains committed to funding intelligence, information superiority, special operations and support. Requirements to upgrade and modernize tactical radio communications capabilities and provide more secure, interoperable and reliable communications remain a funding priority. International defense forces continue to drive toward tactical communications upgrades and interoperability with the systems and equipment used by the U.S. Government.
    

    
    

To continue research, I recommend:
1. SeekingAlpha/Zack's Research on Harris (HRS)
2. Aug-27 10-K Summary.
3. Full 10-K June 29, 2007
4. Yahoo Finance Research on Harris (HRS)
5. Harris Corporation Website