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Harman International’s New Plans, Ranked Top Service Provider

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Price movement of Harman International Industries

Harman International Industries (HAR) has a market cap of $5.4 billion. HAR rose by 3.4% to close at $75.67 per share as of February 22, 2016. The price movement on a weekly, monthly, and YTD basis is 7.8%, -0.36%, and -19.3%, respectively.

At times, the stock has broken the support of all moving day averages. Currently, HAR is trading 4.0% above its 20-day moving average, 8.1% below its 50-day moving average, and 25.9% below its 200-day moving average.

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The Guggenheim Raymond James SB-1 Equity ETF (RYJ) invests 0.71% of its holdings in HAR. This ETF tracks an equal-weighted index of US-listed stocks expected by analysts to achieve a 15% total return and outperform the S&P 500 over the next six to 12 months. The YTD price movement of RYJ was -10.4% as of February 19, 2016.

The Schwab US Mid-Cap ETF (SCHM) invests 0.37% of its holdings in HAR. The ETF tracks a market-cap-weighted index of midcap stocks in the Dow Jones US Total Stock Market Index.

The competitors of Harman International Industries (HAR) and their market caps are:

  • Apple (AAPL) – $537.2 billion
  • Sony Corp.-ADR (SNE) – $28.5 billion

Harman new plans

A global advisory firm, Zinnov Research ranked Harman International Industries (HAR) in the leadership zone among global service providers in the gaming vertical for the media and entertainment industry. HAR also secured a position in the leadership zone in the Information Services and New Media segments.

HAR and SoftBank Group companies Sprint and Brightstar have announced their plan to launch the third generation of the Harman Kardon Onyx Studio line.

Harman International is advancing toward the connected car ecosystem by making it easier for automakers to introduce and launch enterprise- and vehicle-centric services from leading providers.

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Performance of HAR in fiscal 2Q16

Harman International Industries (HAR) reported fiscal 2Q16 net sales of $1,772.2 million, a rise of 11.9% compared to net sales of $1,583.5 million in fiscal 2Q15. Sales of the Connected Car and Lifestyle Audio segments rose by 2.1% and 20.4%, respectively, and sales in the Professional Solutions segment fell by 6.7% in fiscal 2Q16.

The company’s cost of sales as a percentage of net sales and gross profit rose by 1.5% and 10.5%, respectively, in fiscal 2Q16 compared to fiscal 2Q15. Its non-GAAP net income and non-GAAP EPS rose to $134.2 million and $1.84, respectively, in fiscal 2Q16, compared to $126.0 million and $1.79, respectively, in fiscal 2Q15.

Meanwhile, its cash and cash equivalents fell by 32.6%, and inventories rose by 26.2% in fiscal 2Q16 compared to fiscal 4Q15. Its current ratio rose to 1.43x, and debt-to-equity ratio fell to 1.36x in fiscal 2Q16 compared to a current ratio and a debt-to-equity ratio of 1.36x and 1.45x, respectively, in fiscal 4Q15.

HAR has declared a quarterly cash dividend of $0.35 per share on its common stock. The dividend is set to be paid on February 23, 2016, to each shareholder of record as of the close of business on February 8, 2016.

The PE (price-to-earnings) and PBV (price-to-book value) ratios of HAR are 15.9x and 2.2x, respectively, as of February 22, 2016.

In the final part of this series, we’ll take a look at B&G Foods.

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