6 Jan

New Developments, Acquisition Boost Harman International’s Stock

WRITTEN BY Gabriel Kane

Price movement of Harman International Industries

Harman International Industries (HAR) has a market capitalization of $6.8 billion. After the announcement of new developments in products and technology, HAR rose by 3.1% to close at $96.00 per share as of January 5, 2016. The stock’s price movements on a weekly, monthly, and YTD (year-to-date) basis are 2.0%, -4.6%, and 1.9%, respectively.

New Developments, Acquisition Boost Harman International’s Stock

Technically, HAR has broken the support of all its moving averages throughout 2015. Currently, the stock is trading 2.6% above its 20-day moving average, 4.2% below its 50-day moving average, and 14.2% below its 200-day moving average.

The Guggenheim S&P Equal Weight Consumer Discretionary ETF (RCD) invests 1.2% of its holdings in HAR. The ETF tracks an equal-weighted index of large-cap US Consumer Discretionary stocks drawn from the S&P 500. RCD’s YTD price movement is -2.3%.

The iShares Morningstar Mid-Cap Growth Index ETF (JKH) invests 0.50% of its holdings in HAR.

Competitors of Harman International Industries and their market capitalizations are as follows:

  • Apple (AAPL)— $572.6 billion
  • Sony (SNE) — $32.6 billion

Advancements in technology by HAR

HAR is set to acquire TowerSec, an automotive cyber security company. According to HAR’s news release on the matter, “TowerSec’s technology will be integrated into HARMAN’s 5+1 security architecture aimed at protecting the critical points of vulnerability in the connected and autonomous car, including hardware, network and Over The Air (or OTA) updates.”

HAR launched a cloud-based service delivery platform for the connected car and its Life-Enhancing Intelligent Vehicle Solution (or LIVS) at CES (Consumer Electronics Show) 2016.

HAR also announced a connected car collaboration with Microsoft at CES 2016. This collaboration will introduce new mobile productivity services. It will also utilize existing products, services, and technologies, including cloud platforms, telematics, and driver productivity, to offer better safety and reliability for drivers and greater operating efficiencies for auto manufacturers.

The company has announced that it is the first systems integration partner for Google’s Brillo and Weave platforms.

These new developments in products, technology, and acquisitions rose the stock price of Harman International Industries by 3.1% to $96.00 per share.

Performance of HAR in recent fiscal 1Q16

HAR reported fiscal 1Q16 net sales of $1.6 billion, a rise of 14.3% when compared to net sales of $1.4 billion in fiscal 1Q15. It reported a rise on foreign exchange of $1.8 million in fiscal 1Q16.

The company’s non-GAAP (generally accepted accounting principles) net income and non-GAAP EPS (earnings per share) rose to $107.0 million and $1.48, respectively, in fiscal 1Q16, compared to non-GAAP net income and non-GAAP EPS of $91.9 million and $1.31, respectively, in fiscal 1Q15.

Meanwhile, its cash and cash equivalents fell by 38.1%, and its inventories rose by 22.0% in fiscal 1Q16 on a quarterly basis. Its debt-to-equity ratio fell to 1.44 in fiscal 1Q16 compared to a debt-to-equity ratio of 1.47 in fiscal 4Q15.

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