FLIR Systems Inc Valuation – February 2019 $FLIR

Company Profile (excerpt from Reuters): FLIR Systems, Inc. (FLIR), incorporated on March 8, 1978, designs, develops, markets and distributes thermal imaging systems, visible-light imaging systems, locater systems, measurement and diagnostic systems and threat-detection solutions. The Company’s segments include Surveillance, Instruments, Security, OEM & Emerging Markets, Maritime and Detection. Its Surveillance segment provides enhanced imaging and recognition solutions under its commercially developed, military qualified (CDMQ) model to a range of military, law enforcement, public safety and other government customers. Its Instruments segment provides devices that image, measure and assess thermal energy, gases and other environmental elements for industrial, commercial, and scientific applications under the FLIR and Extech brands. Its Security segment develops and manufactures a range of cameras and video recording systems for use in commercial, critical infrastructure, and home monitoring applications. Its OEM & Emerging Markets segment provides thermal imaging camera cores and components that are utilized by third parties to create thermal and other types of imaging systems. Its Maritime segment develops and manufactures electronics and imaging instruments for the recreational and commercial maritime market under the FLIR and Raymarine brands. The Detection segment offers sensors, instruments and integrated platform solutions for the detection, identification, and suppression of chemical, biological, radiological, nuclear and explosives (CBRNE) threats.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of FLIR – February 2019

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $7,250,818,658 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 4.09 Pass
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Fail
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 16.70% Fail
6. Moderate PEmg Ratio PEmg < 20 30.16 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 3.87 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 4.09 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.43 Pass
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $1.74
MG Growth Estimate 2.69%
MG Value $24.14
Opinion Overvalued
MG Grade C-
MG Value based on 3% Growth $25.20
MG Value based on 0% Growth $14.77
Market Implied Growth Rate 10.83%
Current Price $52.41
% of Intrinsic Value 217.11%

FLIR Systems, Inc. is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings growth over the last ten years, and the poor dividend history, and the high PEmg and PB ratios. The Enterprising Investor has no initial concerns. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Overvalued after growing its EPSmg (normalized earnings) from $1.47 in 2015 to an estimated $1.74 for 2019. This level of demonstrated earnings growth does not support the market’s implied estimate of 10.83% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into FLIR Systems, Inc. revealed the company was trading above its Graham Number of $26.61. The company pays a dividend of $0.64 per share, for a yield of 1.2% Its PEmg (price over earnings per share – ModernGraham) was 30.16, which was above the industry average of 29.46. Finally, the company was trading above its Net Current Asset Value (NCAV) of $2.8.

FLIR Systems, Inc. receives an average overall rating in the ModernGraham grading system, scoring a C-.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) $2.80
Graham Number $26.61
PEmg 30.16
Current Ratio 4.09
PB Ratio 3.87
Current Dividend $0.64
Dividend Yield 1.22%
Number of Consecutive Years of Dividend Growth 8

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 12/1/2018
Total Current Assets $1,292,647,000
Total Current Liabilities $316,014,000
Long-Term Debt $421,948,000
Total Assets $2,781,242,000
Intangible Assets $1,051,416,000
Total Liabilities $904,456,000
Shares Outstanding (Diluted Average) 138,509,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $2.32
Dec2018 $2.01
Dec2017 $0.77
Dec2016 $1.20
Dec2015 $1.72
Dec2014 $1.39
Dec2013 $1.22
Dec2012 $1.45
Dec2011 $1.38
Dec2010 $1.54
Dec2009 $1.45
Dec2008 $1.28
Dec2007 $0.89
Dec2006 $0.66
Dec2005 $0.58
Dec2004 $0.46
Dec2003 $0.29
Dec2002 $0.29
Dec2001 $0.20
Dec2000 -$0.23
Dec1999 -$0.48

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $1.74
Dec2018 $1.44
Dec2017 $1.19
Dec2016 $1.40
Dec2015 $1.47
Dec2014 $1.37
Dec2013 $1.37
Dec2012 $1.44
Dec2011 $1.39
Dec2010 $1.32
Dec2009 $1.13
Dec2008 $0.90
Dec2007 $0.67
Dec2006 $0.52
Dec2005 $0.43
Dec2004 $0.30
Dec2003 $0.15

Recommended Reading:

Other ModernGraham posts about the company

FLIR Systems Inc Valuation – April 2018 $FLIR
FLIR Systems Inc Valuation – November 2016 $FLIR
FLIR Systems Inc Valuation – May 2016 $FLIR
FLIR Systems Inc. Valuation – November 2015 Update $FLIR
FLIR Systems Inc. Analysis – August 2015 Update $FLIR

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Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

FLIR Systems Inc Valuation – April 2018 $FLIR

Company Profile (excerpt from Reuters): FLIR Systems, Inc. (FLIR), incorporated on March 8, 1978, designs, develops, markets and distributes thermal imaging systems, visible-light imaging systems, locater systems, measurement and diagnostic systems and threat-detection solutions. The Company’s segments include Surveillance, Instruments, Security, OEM & Emerging Markets, Maritime and Detection. Its Surveillance segment provides enhanced imaging and recognition solutions under its commercially developed, military qualified (CDMQ) model to a range of military, law enforcement, public safety and other government customers. Its Instruments segment provides devices that image, measure and assess thermal energy, gases and other environmental elements for industrial, commercial, and scientific applications under the FLIR and Extech brands. Its Security segment develops and manufactures a range of cameras and video recording systems for use in commercial, critical infrastructure, and home monitoring applications. Its OEM & Emerging Markets segment provides thermal imaging camera cores and components that are utilized by third parties to create thermal and other types of imaging systems. Its Maritime segment develops and manufactures electronics and imaging instruments for the recreational and commercial maritime market under the FLIR and Raymarine brands. The Detection segment offers sensors, instruments and integrated platform solutions for the detection, identification, and suppression of chemical, biological, radiological, nuclear and explosives (CBRNE) threats.

FLIR Chart

FLIR data by YCharts

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of FLIR – April 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $7,355,798,698 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 3.51 Pass
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Fail
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end -7.55% Fail
6. Moderate PEmg Ratio PEmg < 20 36.33 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 4.10 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 3.51 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.42 Pass
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $1.46
MG Growth Estimate 1.01%
MG Value $15.33
Opinion Overvalued
MG Grade C
MG Value based on 3% Growth $21.13
MG Value based on 0% Growth $12.39
Market Implied Growth Rate 13.92%
Current Price $52.95
% of Intrinsic Value 345.33%

FLIR Systems, Inc. is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings growth over the last ten years, and the poor dividend history, and the high PEmg and PB ratios. The Enterprising Investor has no initial concerns. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Overvalued after growing its EPSmg (normalized earnings) from $1.37 in 2014 to an estimated $1.46 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 13.92% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into FLIR Systems, Inc. revealed the company was trading above its Graham Number of $24.81. The company pays a dividend of $0.6 per share, for a yield of 1.1% Its PEmg (price over earnings per share – ModernGraham) was 36.33, which was below the industry average of 51.31, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $2.9.

FLIR Systems, Inc. receives an average overall rating in the ModernGraham grading system, scoring a C.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) $2.90
Graham Number $24.81
PEmg 36.33
Current Ratio 3.51
PB Ratio 4.10
Current Dividend $0.60
Dividend Yield 1.13%
Number of Consecutive Years of Dividend Growth 7

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 12/1/2017
Total Current Assets $1,387,219,000
Total Current Liabilities $394,933,000
Long-Term Debt $420,684,000
Total Assets $2,810,026,000
Intangible Assets $1,077,941,000
Total Liabilities $975,468,000
Shares Outstanding (Diluted Average) 142,025,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $2.07
Dec2017 $0.77
Dec2016 $1.20
Dec2015 $1.72
Dec2014 $1.39
Dec2013 $1.22
Dec2012 $1.45
Dec2011 $1.38
Dec2010 $1.54
Dec2009 $1.45
Dec2008 $1.28
Dec2007 $0.89
Dec2006 $0.66
Dec2005 $0.58
Dec2004 $0.46
Dec2003 $0.29
Dec2002 $0.29
Dec2001 $0.20
Dec2000 -$0.23
Dec1999 -$0.48
Dec1998 $0.03

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $1.46
Dec2017 $1.19
Dec2016 $1.40
Dec2015 $1.47
Dec2014 $1.37
Dec2013 $1.37
Dec2012 $1.44
Dec2011 $1.39
Dec2010 $1.32
Dec2009 $1.13
Dec2008 $0.90
Dec2007 $0.67
Dec2006 $0.52
Dec2005 $0.43
Dec2004 $0.30
Dec2003 $0.15
Dec2002 $0.04

Recommended Reading:

Other ModernGraham posts about the company

FLIR Systems Inc Valuation – November 2016 $FLIR
FLIR Systems Inc Valuation – May 2016 $FLIR
FLIR Systems Inc. Valuation – November 2015 Update $FLIR
FLIR Systems Inc. Analysis – August 2015 Update $FLIR
47 Companies in the Spotlight This Week – 5/16/15

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TE Connectivity Ltd Valuation – March 2018 $TEL
Juniper Networks Inc Valuation – March 2018 $JNPR
NVIDIA Corp Valuation – March 2018 $NVDA
Seagate Technology PLC Valuation – March 2018 $STX
HP Inc Valuation – February 2018 $HPQ

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

FLIR Systems Inc Valuation – November 2016 $FLIR

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Stocks for Using A Benjamin Graham Value Investing Strategy – August 2016.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how FLIR Systems Inc (FLIR) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): FLIR Systems, Inc. (FLIR) designs, develops, markets and distributes thermal imaging systems, visible-light imaging systems, locater systems, measurement and diagnostic systems and advanced threat-detection solutions. The Company’s segments include Surveillance, Instruments, Security, OEM & Emerging Markets, Maritime and Detection. Its Surveillance segment provides enhanced imaging and recognition solutions. Its Instruments segment provides devices that image, measure and assess thermal energy, gases and other environmental elements for industrial, commercial, and scientific applications under the FLIR and Extech brands. Its OEM & Emerging Markets segment provides thermal imaging camera cores and components. Its Maritime segment develops and manufactures electronics and imaging instruments. Its Security segment develops and manufactures a range of cameras and video recording systems. The Detection segment offers sensors, instruments and integrated platform solutions.

FLIR Chart

FLIR data by YCharts

[level-free]
To read the details of this valuation, you must be logged in as a premium member. If you are not a premium member, please consider becoming one.

Premium members can view a full ModernGraham valuation of the company and have access to download a PDF version of the valuation for easy reference. Recent valuations of the components of the Dow Jones Industrial Average are available for free members, including this one of Microsoft Corporation.  In addition, here is a post detailing what can be found within each individual company’s valuation.

[/level-free]
[not-level-free]

Downloadable PDF version of this valuation:

moderngraham-valuation-of-flir-november-2016

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $4,761,974,243 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 4.69 Pass
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Fail
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 20.99% Fail
6. Moderate PEmg Ratio PEmg < 20 24.72 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 2.93 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 4.69 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.44 Pass
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Fail

Stage 2: Determination of Intrinsic Value

flir-value-chart-november-2016

EPSmg $1.42
MG Growth Estimate -0.19%
MG Value $11.51
Opinion Overvalued
MG Grade C
MG Value based on 3% Growth $20.58
MG Value based on 0% Growth $12.06
Market Implied Growth Rate 8.11%
Current Price $35.08
% of Intrinsic Value 304.74%

FLIR Systems, Inc. is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings growth over the last ten years, and the poor dividend history, and the high PEmg and PB ratios. The Enterprising Investor is only concerned with the lack of earnings growth over the last five years. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Overvalued after seeing its EPSmg (normalized earnings) decline from $1.44 in 2012 to an estimated $1.42 for 2016. This level of demonstrated earnings growth does not support the market’s implied estimate of 8.11% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into FLIR Systems, Inc. revealed the company was trading above its Graham Number of $18.63. The company pays a dividend of $0.47 per share, for a yield of 1.3% Its PEmg (price over earnings per share – ModernGraham) was 24.72, which was below the industry average of 34.5, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $3.78.

FLIR Systems, Inc. receives an average overall rating in the ModernGraham grading system, scoring a C.

Stage 3: Information for Further Research

flir-charts-november-2016

Net Current Asset Value (NCAV) $3.78
Graham Number $18.63
PEmg 24.72
Current Ratio 4.69
PB Ratio 2.93
Current Dividend $0.47
Dividend Yield 1.34%
Number of Consecutive Years of Dividend Growth 6

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Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 9/1/2016
Total Current Assets $1,456,140,000
Total Current Liabilities $310,648,000
Long-Term Debt $501,606,000
Total Assets $2,587,894,000
Intangible Assets $762,121,000
Total Liabilities $934,488,000
Shares Outstanding (Diluted Average) 137,938,000

Earnings Per Share History

Next Fiscal Year Estimate $1.27
Dec2015 $1.72
Dec2014 $1.39
Dec2013 $1.22
Dec2012 $1.45
Dec2011 $1.38
Dec2010 $1.54
Dec2009 $1.45
Dec2008 $1.28
Dec2007 $0.89
Dec2006 $0.66
Dec2005 $0.58
Dec2004 $0.46
Dec2003 $0.29
Dec2002 $0.29
Dec2001 $0.20
Dec2000 -$0.23
Dec1999 -$0.48
Dec1998 $0.03
Dec1997 -$0.46
Dec1996 $0.11

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $1.42
Dec2015 $1.47
Dec2014 $1.37
Dec2013 $1.37
Dec2012 $1.44
Dec2011 $1.39
Dec2010 $1.32
Dec2009 $1.13
Dec2008 $0.90
Dec2007 $0.67
Dec2006 $0.52
Dec2005 $0.43
Dec2004 $0.30
Dec2003 $0.15
Dec2002 $0.04
Dec2001 -$0.11
Dec2000 -$0.25

Recommended Reading:

Other ModernGraham posts about the company

FLIR Systems Inc Valuation – May 2016 $FLIR
FLIR Systems Inc. Valuation – November 2015 Update $FLIR
FLIR Systems Inc. Analysis – August 2015 Update $FLIR
47 Companies in the Spotlight This Week – 5/16/15
FLIR Systems Inc. Quarterly Valuation – May 2015 $FLIR

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Tyco International PLC Valuation – November 2015 Update $TYC
ADT Stock Analysis – 2015 Annual Update $ADT
Tyco International Limited Annual Valuation – 2014 $TYC
ADT Corporation 2014 Annual Valuation $ADT

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

FLIR Systems Inc Valuation – May 2016 $FLIR

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Companies Benjamin Graham Would Invest In Today – March 2016.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how FLIR Systems Inc (FLIR) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): FLIR Systems, Inc. (FLIR) designs, develops, markets and distributes thermal imaging systems, visible-light imaging systems, locater systems, measurement and diagnostic systems and advanced threat-detection solutions. The Company’s segments include Surveillance, Instruments, Security, OEM & Emerging Markets, Maritime and Detection. Its Surveillance segment provides enhanced imaging and recognition solutions. Its Instruments segment provides devices that image, measure and assess thermal energy, gases and other environmental elements for industrial, commercial, and scientific applications under the FLIR and Extech brands. Its OEM & Emerging Markets segment provides thermal imaging camera cores and components. Its Maritime segment develops and manufactures electronics and imaging instruments. Its Security segment develops and manufactures a range of cameras and video recording systems. The Detection segment offers sensors, instruments and integrated platform solutions.

[level-free]

To read the details of this valuation, you must be logged in as a premium member. If you are not a premium member, please consider becoming one.

Premium members can view a full ModernGraham valuation of the company and have access to download a PDF version of the valuation for easy reference. Here is a free sample valuation pdf, and here is a post detailing what can be found within each individual company’s valuation.

[/level-free]
[not-level-free]

Downloadable PDF version of this valuation:

ModernGraham Valuation of FLIR – May 2016

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $4,125,272,044 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 2.41 Pass
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Fail
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 30.11% Fail
6. Moderate PEmg Ratio PEmg < 20 19.77 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 2.52 Pass
Score
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 2.41 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.12 Pass
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

FLIR value chart May 2016

EPSmg $1.53
MG Growth Estimate 0.95%
MG Value $15.91
Opinion Overvalued
MG Grade C
MG Value based on 3% Growth $22.18
MG Value based on 0% Growth $13.00
Market Implied Growth Rate 5.63%
Current Price $30.23
% of Intrinsic Value 189.97%

FLIR Systems, Inc. is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings growth over the last ten years, and the poor dividend history. The Enterprising Investor has no initial concerns. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Overvalued after growing its EPSmg (normalized earnings) from $1.44 in 2012 to an estimated $1.53 for 2016. This level of demonstrated earnings growth does not support the market’s implied estimate of 5.63% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value below the price.

FLIR Systems, Inc. receives an average overall rating in the ModernGraham grading system, scoring a C.

Stage 3: Information for Further Research

FLIR charts May 2016

Net Current Asset Value (NCAV) $3.93
Graham Number $20.89
PEmg 19.77
Current Ratio 2.41
PB Ratio 2.52
Current Dividend $0.45
Dividend Yield 1.49%
Number of Consecutive Years of Dividend Growth 6

[/not-level-free]

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information
Total Current Assets $1,290,230,000
Total Current Liabilities $535,149,000
Long-term Debt $90,000,000
Total Assets $2,413,209,000
Intangible Assets $739,886,000
Total Liabilities $745,180,000
Shares Outstanding (Diluted Average) 138,779,000

Earnings Per Share History

Next Fiscal Year Estimate $1.60
12/1/2015 $1.72
12/1/2014 $1.39
12/1/2013 $1.22
12/1/2012 $1.45
12/1/2011 $1.38
12/1/2010 $1.54
12/1/2009 $1.45
12/1/2008 $1.28
12/1/2007 $0.89
12/1/2006 $0.66
12/1/2005 $0.58
12/1/2004 $0.47
12/1/2003 $0.32
12/1/2002 $0.29
12/1/2001 $0.20
12/1/2000 -$0.23
12/1/1999 -$0.48
12/1/1998 $0.18
12/1/1997 -$0.65
12/1/1996 $0.11

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $1.53
12/1/2015 $1.47
12/1/2014 $1.37
12/1/2013 $1.37
12/1/2012 $1.44
12/1/2011 $1.39
12/1/2010 $1.32
12/1/2009 $1.13
12/1/2008 $0.90
12/1/2007 $0.67
12/1/2006 $0.53
12/1/2005 $0.43
12/1/2004 $0.31
12/1/2003 $0.16
12/1/2002 $0.05
12/1/2001 -$0.11
12/1/2000 -$0.25

Recommended Reading:

Other ModernGraham posts about the company

FLIR Systems Inc. Valuation – November 2015 Update $FLIR
FLIR Systems Inc. Analysis – August 2015 Update $FLIR
47 Companies in the Spotlight This Week – 5/16/15
FLIR Systems Inc. Quarterly Valuation – May 2015 $FLIR
58 Companies in the Spotlight This Week – 1/31/15

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Analog Devices Inc Stock Valuation – February 2016 $ADI
Garmin Ltd Stock Valuation – February 2016 $GRMN
Emerson Electric Co Valuation – February 2016 $EMR
Applied Materials Inc Valuation – February 2016 $AMAT
Skyworks Solutions Inc Stock Valuation – February 2016 $SWKS
Analog Devices Inc Stock Valuation – February 2016 $ADI
Emerson Electric Co Valuation – February 2016 $EMR

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

FLIR Systems Inc. Valuation – November 2015 Update $FLIR

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Most Undervalued Companies for the Defensive Investor – November 2015.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how FLIR Systems Inc. (FLIR) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): FLIR Systems, Inc. (FLIR) designs, develops, markets and distributes thermal imaging systems, visible-light imaging systems, locater systems, measurement and diagnostic systems and advanced threat-detection solutions. The Company’s operating segments include: Surveillance, Instruments, OEM and Emerging Markets, Maritime, Security and Detection. The Surveillance segment provides enhanced imaging and recognition solutions. The Instruments segments provide devices that image, measure and assess thermal energy, gases and related elements. The OEM and Emerging Markets segment provides thermal imaging camera cores and components. The Maritime segment develops and manufactures electronics and imaging instruments. The Security segment develops and manufactures cameras and video recording systems. The Detection segment offers sensors, instruments and integrated platform solutions for the detection, identification and suppression of chemical and other related threats.

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Premium members can view a full ModernGraham valuation of the company and have access to download a PDF version of the valuation for easy reference. Here is a free sample valuation pdf, and here is a post detailing what can be found within each individual company’s valuation.

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Downloadable PDF version of this valuation:

ModernGraham Valuation of FLIR – November 2015

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $3,610,827,276 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 4.29 Pass
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Fail
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 51.24% Pass
6. Moderate PEmg Ratio PEmg < 20 17.95 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 2.26 Pass
Score
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 4.29 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.34 Pass
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

FLIR value Chart November 2015

EPSmg $1.46
MG Growth Estimate 0.71%
MG Value $14.46
Opinion Overvalued
MG Value based on 3% Growth $21.12
MG Value based on 0% Growth $12.38
Market Implied Growth Rate 4.72%
Current Price $26.14
% of Intrinsic Value 180.83%

FLIR Systems Inc. qualifies for both the Enterprising Investor and the more conservative Defensive Investor.  The Defensive Investor is only initially concerned by the short dividend record, while the Enterprising Investor has no initial concerns.  As a result, all value investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with further research.

As for a valuation, the company appears to be overvalued after growing its EPSmg (normalized earnings) from $1.39 in 2011 to an estimated $1.46 for 2015.  This level of demonstrated earnings growth does not support the market’s implied estimate of 4.72% annual earnings growth over the next 7-10 years.  As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value below the price.

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on FLIR Systems Inc. (FLIR)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Stage 3: Information for Further Research

FLIR Charts November 2015

Net Current Asset Value (NCAV) $4.39
Graham Number $20.87
PEmg 17.95
Current Ratio 4.29
PB Ratio 2.26
Dividend Yield 1.64%
Number of Consecutive Years of Dividend Growth 5

 

[/level-mg-stocks-screens-subscriber]

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Total Current Assets $1,346,200,000
Total Current Liabilities $313,883,000
Long-Term Debt $347,080,000
Total Assets $2,354,803,000
Intangible Assets $660,389,000
Total Liabilities $729,945,000
Shares Outstanding (Diluted Average) 140,525,000

Earnings Per Share History

Next Fiscal Year Estimate $1.67
Dec14 $1.39
Dec13 $1.22
Dec12 $1.45
Dec11 $1.38
Dec10 $1.54
Dec09 $1.45
Dec08 $1.28
Dec07 $0.89
Dec06 $0.66
Dec05 $0.58
Dec04 $0.46
Dec03 $0.29
Dec02 $0.29
Dec01 $0.20
Dec00 -$0.23
Dec99 -$0.48
Dec98 $0.03
Dec97 -$0.46
Dec96 $0.11
Dec95 $0.09

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $1.46
Dec14 $1.37
Dec13 $1.37
Dec12 $1.44
Dec11 $1.39
Dec10 $1.32
Dec09 $1.13
Dec08 $0.90
Dec07 $0.67
Dec06 $0.52
Dec05 $0.43
Dec04 $0.30
Dec03 $0.15
Dec02 $0.04
Dec01 -$0.11
Dec00 -$0.25
Dec99 -$0.22

Recommended Reading:

Other ModernGraham posts about the company

FLIR Systems Inc. Analysis – August 2015 Update $FLIR
47 Companies in the Spotlight This Week – 5/16/15
FLIR Systems Inc. Quarterly Valuation – May 2015 $FLIR
58 Companies in the Spotlight This Week – 1/31/15
FLIR Systems Inc. Quarterly Valuation – January 2015 $FLIR

Other ModernGraham posts about related companies

FMC Technologies Inc. Valuation – November 2015 Update $FTI
Applied Materials Inc Valuation – November 2015 Update $AMAT
Micron Technology Inc. Valuation – November 2015 Update $MU
Xilinx Inc. Valuation – November 2015 Update $XLNX
Ametek Inc. Valuation – November 2015 Update $AME
Skyworks Solutions Inc. Valuation – October 2015 Update $SWKS
Agilent Technologies Inc. Valuation – October 2015 Update $A
Western Digital Corporation Valuation – October 2015 Update $WDC
MTS Systems Corporation Valuation – October 2015 Update $MTSC
Linear Technology Corp Valuation – October 2015 Update $LLTC

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

FLIR Systems Inc. Analysis – August 2015 Update $FLIR

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Most Undervalued Companies for the Defensive Investor – August 2015.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how FLIR Systems Inc. (FLIR) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): FLIR Systems, Inc. (FLIR) designs, develops, markets and distributes thermal imaging systems, visible-light imaging systems, locater systems, measurement and diagnostic systems and advanced threat-detection solutions. The Company’s operating segments include: Surveillance, Instruments, OEM and Emerging Markets, Maritime, Security and Detection. The Surveillance segment provides enhanced imaging and recognition solutions. The Instruments segments provide devices that image, measure and assess thermal energy, gases and related elements. The OEM and Emerging Markets segment provides thermal imaging camera cores and components. The Maritime segment develops and manufactures electronics and imaging instruments. The Security segment develops and manufactures cameras and video recording systems. The Detection segment offers sensors, instruments and integrated platform solutions for the detection, identification and suppression of chemical and other related threats.

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To read the rest of this valuation, you must be logged in as a premium member. If you are not a premium member, please consider becoming one.

Premium members can view a full ModernGraham valuation of the company and have access to download a PDF version of the valuation for easy reference. Here is a free sample valuation pdf, and here is a post detailing what can be found within each individual company’s valuation.

[/level-free]
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Downloadable PDF version of this valuation:

ModernGraham Valuation of FLIR – August 2015

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 Pass
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Fail
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end Pass
6. Moderate PEmg Ratio PEmg < 20 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 Fail
Score
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 Pass
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

EPSmg 1.43
MG Growth Estimate 0.42%
MG Value $13.37
Opinion Overvalued
MG Value based on 3% Growth $20.74
MG Value based on 0% Growth $12.16
Market Implied Growth Rate 6.42%
Current Price $30.53
% of Intrinsic Value 228.37%

FLIR Systems Inc. qualifies for the Enterprising Investor but is not suitable for the more conservative Defensive Investor.  The Defensive Investor is concerned with the short dividend history, and the high PEmg and PB ratios.  The Enterprising Investor has no initial concerns.  As a result, all Enterprising Investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with further research into the company.

As for a valuation, the company appears to be overvalued after growing its EPSmg (normalized earnings) from $1.39 in 2011 to an estimated $1.43 for 2015.  This level of demonstrated earnings growth does not support the market’s implied estimate of 6.42% annual earnings growth over the next 7-10 years.  As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value below the price.

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on FLIR Systems Inc. (FLIR)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Stage 3: Information for Further Research

FLIR charts August 2015

Net Current Asset Value (NCAV) $4.46
PEmg 21.35
Current Ratio 4.42
PB Ratio 2.64
Dividend Yield 1.38%
Number of Consecutive Years of Dividend Growth 5

 

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Total Current Assets $1,372,923,000
Total Current Liabilities $310,307,000
Long-Term Debt $350,715,000
Total Assets $2,379,716,000
Intangible Assets $666,845,000
Total Liabilities $741,241,000
Outstanding Shares 141,491,000

Earnings Per Share History

Next Fiscal Year Estimate $1.59
Dec14 $1.39
Dec13 $1.22
Dec12 $1.45
Dec11 $1.38
Dec10 $1.54
Dec09 $1.45
Dec08 $1.28
Dec07 $0.89
Dec06 $0.66
Dec05 $0.58
Dec04 $0.46
Dec03 $0.29
Dec02 $0.29
Dec01 $0.20
Dec00 -$0.23
Dec99 -$0.48
Dec98 $0.03
Dec97 -$0.46
Dec96 $0.11
Dec95 $0.09

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $1.43
Dec14 $1.37
Dec13 $1.37
Dec12 $1.44
Dec11 $1.39
Dec10 $1.32
Dec09 $1.13
Dec08 $0.90
Dec07 $0.67
Dec06 $0.52
Dec05 $0.43
Dec04 $0.30
Dec03 $0.15
Dec02 $0.04
Dec01 -$0.11
Dec00 -$0.25
Dec99 -$0.22

Recommended Reading:

Other ModernGraham posts about the company

47 Companies in the Spotlight This Week – 5/16/15
FLIR Systems Inc. Quarterly Valuation – May 2015 $FLIR
58 Companies in the Spotlight This Week – 1/31/15
FLIR Systems Inc. Quarterly Valuation – January 2015 $FLIR
14 Companies in the Spotlight This Week – 10/18/14

Other ModernGraham posts about related companies

Nvidia Corporation Analysis – August 2015 Update $NVDA
Applied Materials Inc. Analysis – August 2015 Update $AMAT
Xilinx Inc. Analysis – August 2015 Update $XLNX
Qorvo Inc. Analysis – Initial Coverage $QRVO
Agilent Technologies Inc. Analysis – July 2015 Update $A
Skyworks Solutions Inc. Analysis – Initial Coverage $SWKS
Western Digital Corporation Analysis – July 2015 Update $WDC
MTS Systems Corporation Analysis – July 2015 Update $MTSC
Linear Technology Corporation Analysis – July 2015 Update $LLTC
Altera Corporation Analysis – July 2015 Update $ALTR

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.

[/level-mg-stocks-screens-subscriber]

FLIR Systems Inc. Quarterly Valuation – May 2015 $FLIR

FLIR_logoBenjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 5 Most Undervalued Companies for the Defensive Investor – April 2015.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a specific look at how FLIR Systems Inc. (FLIR) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): FLIR Systems, Inc. (FLIR) is a designer, manufacturer, and marketer of thermal imaging systems. The Company’s sensors and integrated sensor systems enable the gathering and analysis of critical information through a range of applications in commercial, industrial, and government markets across the world. The Company operates in six segments, which include Thermal Vision & Measurement (TVM), Raymarine, Surveillance, Detection, and Integrated Systems. It offers a range of sensor products, including infrared imaging cameras and systems, detector cores, Chemical, Biological, Radiological, Nuclear and Enhanced Conventional Weapons (CBRNE) threat detectors, test and measurement instruments, radars, maritime electronics, and related products and solutions.

Defensive Investor – must pass at least 6 of the following 7 tests: Score = 4/7

  1. Adequate Size of Enterprise – market capitalization of at least $2 billion – PASS
  2. Sufficiently Strong Financial Condition – current ratio greater than 2 -PASS
  3. Earnings Stability – positive earnings per share for at least 10 straight years – PASS
  4. Dividend Record – has paid a dividend for at least 10 straight years – FAIL
  5. Earnings Growth – earnings per share has increased by at least 1/3 over the last 10 years using 3 year averages at beginning and end of period – PASS
  6. Moderate PEmg ratio – PEmg is less than 20 – FAIL
  7. Moderate Price to Assets – PB ratio is less than 2.5 or PB x PEmg is less than 50 – FAIL

Enterprising Investor – must pass at least 4 of the following 5 tests or be suitable for a defensive investor: Score = 5/5

  1. Sufficiently Strong Financial Condition, Part 1 – current ratio greater than 1.5 – PASS
  2. Sufficiently Strong Financial Condition, Part 2 – Debt to Net Current Assets ratio less than 1.1 – PASS
  3. Earnings Stability – positive earnings per share for at least 5 years – PASS
  4. Dividend Record – currently pays a dividend – PASS
  5. Earnings growth – EPSmg greater than 5 years ago – PASS

Valuation Summary

Key Data:

Recent Price $31.69
MG Value $13.50
MG Opinion Overvalued
Value Based on 3% Growth $20.78
Value Based on 0% Growth $12.18
Market Implied Growth Rate 6.80%
Net Current Asset Value (NCAV) $4.20
PEmg 22.11
Current Ratio 4.48
PB Ratio 2.83

Balance Sheet – March 2015

Current Assets $1,321,000,000
Current Liabilities $295,000,000
Total Debt $354,000,000
Total Assets $2,312,000,000
Intangible Assets $663,000,000
Total Liabilities $727,000,000
Outstanding Shares 141,500,000

Earnings Per Share

2015 (estimate) $1.60
2014 $1.39
2013 $1.22
2012 $1.45
2011 $1.38
2010 $1.54
2009 $1.45
2008 $1.28
2007 $0.89
2006 $0.66
2005 $0.58

Earnings Per Share – ModernGraham

2015 (estimate) $1.43
2014 $1.37
2013 $1.37
2012 $1.44
2011 $1.39
2010 $1.32

Dividend History

Conclusion:

FLIR Systems Inc. is suitable for the Enterprising Investor but not for the Defensive Investor.  The Defensive Investor is concerned by the short dividend history, and the high PEmg and PB ratios, while the Enterprising Investor has no initial concerns.  As a result, Enterprising Investors following the ModernGraham approach based on Benjamin Graham’s methods should feel very comfortable proceeding with further research and comparing the company to other opportunities.  From a valuation side of things, the company appears to be overvalued after growing its EPSmg (normalized earnings) from $1.39 in 2011 to only an estimated $1.43 for 2015.  This level of demonstrated growth does not support the market’s implied estimate of 6.8% annual earnings growth over the next 7-10 years and leads the ModernGraham valuation model, based on Benjamin Graham’s formula, to return an estimate of intrinsic value falling below the price.

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on FLIR Systems Inc. (FLIR)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Disclaimer:  The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  Logo taken from Wikipedia for the sole purpose of identifying the company; this article is not affiliated with the company in any manner.

FLIR Systems Inc. Quarterly Valuation – January 2015 $FLIR

FLIR_logoBenjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 5 Most Undervalued Companies for the Defensive Investor – January 2015.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a specific look at how FLIR Systems Inc. (FLIR) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): FLIR Systems, Inc. (FLIR) is a designer, manufacturer, and marketer of thermal imaging systems. The Company’s sensors and integrated sensor systems enable the gathering and analysis of critical information through a range of applications in commercial, industrial, and government markets across the world. The Company operates in six segments, which include Thermal Vision & Measurement (TVM), Raymarine, Surveillance, Detection, and Integrated Systems. It offers a range of sensor products, including infrared imaging cameras and systems, detector cores, Chemical, Biological, Radiological, Nuclear and Enhanced Conventional Weapons (CBRNE) threat detectors, test and measurement instruments, radars, maritime electronics, and related products and solutions.

Defensive Investor – must pass at least 6 of the following 7 tests: Score = 4/7

  1. Adequate Size of Enterprise – market capitalization of at least $2 billion – PASS
  2. Sufficiently Strong Financial Condition – current ratio greater than 2 – PASS
  3. Earnings Stability – positive earnings per share for at least 10 straight years – PASS
  4. Dividend Record – has paid a dividend for at least 10 straight years – FAIL
  5. Earnings Growth – earnings per share has increased by at least 1/3 over the last 10 years using 3 year averages at beginning and end of period – PASS
  6. Moderate PEmg ratio – PEmg is less than 20 – FAIL
  7. Moderate Price to Assets – PB ratio is less than 2.5 or PB x PEmg is less than 50 – FAIL

Enterprising Investor – must pass at least 4 of the following 5 tests or be suitable for a defensive investor: Score = 5/5

  1. Sufficiently Strong Financial Condition, Part 1 – current ratio greater than 1.5 – PASS
  2. Sufficiently Strong Financial Condition, Part 2 – Debt to Net Current Assets ratio less than 1.1 – PASS
  3. Earnings Stability – positive earnings per share for at least 5 years – PASS
  4. Dividend Record – currently pays a dividend – PASS
  5. Earnings growth – EPSmg greater than 5 years ago – PASS

Valuation Summary

Key Data:

Recent Price $30.51
MG Value $12.38
MG Opinion Overvalued
Value Based on 3% Growth $19.56
Value Based on 0% Growth $11.46
Market Implied Growth Rate 7.06%
Net Current Asset Value (NCAV) $4.20
PEmg 22.62
Current Ratio 4.64
PB Ratio 2.70

Balance Sheet – September 2014

Current Assets $1,335,000,000
Current Liabilities $288,000,000
Total Debt $362,000,000
Total Assets $2,354,000,000
Intangible Assets $699,000,000
Total Liabilities $733,000,000
Outstanding Shares 143,400,000

Earnings Per Share

2014 (estimate) $1.34
2013 $1.22
2012 $1.45
2011 $1.38
2010 $1.54
2009 $1.45
2008 $1.28
2007 $0.89
2006 $0.66
2005 $0.58
2004 $0.47

Earnings Per Share – ModernGraham

2014 (estimate) $1.35
2013 $1.37
2012 $1.44
2011 $1.39
2010 $1.32
2009 $1.13

Dividend History

Conclusion:

FLIR Systems Inc. is suitable for the Enterprising Investor but not for the Defensive Investor.  The Defensive Investor is concerned by the short dividend history and the high PEmg and PB ratios.  The Enterprising Investor has no initial concerns.  As a result, Enterprising Investors following the ModernGraham approach based on Benjamin Graham’s methods should feel very comfortable proceeding with further research and comparing the company to other opportunities.  From a valuation side of things, the company appears to be overvalued after growing its EPSmg (normalized earnings) from $1.32 in 2010 to only an estimated $1.35 for 2014.  This level of demonstrated growth does not support the market’s implied estimate of 7.06% earnings growth and leads the ModernGraham valuation model, based on Benjamin Graham’s formula, to return an estimate of intrinsic value below the price.

Be sure to check out previous ModernGraham valuations of FLIR Systems Inc. (FLIR) for greater perspective!

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on FLIR Systems Inc. (FLIR)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Disclaimer:  The author did not hold a position in FLIR Systems Inc. (FLIR) or in any other company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  Logo taken from Wikipedia for the sole purpose of identifying the company; this article is not affiliated with the company in any manner.

FLIR Systems Inc. Quarterly Stock Valuation – October 2014 $FLIR

FLIR_logoBenjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 5 Highest Dividend Yields Among Undervalued Companies for the Defensive Investor – September 2014.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a specific look at how FLIR Systems Inc. (FLIR) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): FLIR Systems, Inc. (FLIR), is a designer, manufacturer, and marketer of thermal imaging systems. The Company’s advanced sensors and integrated sensor systems enable the gathering and analysis of critical information through a range of applications in commercial, industrial, and government markets worldwide. Its business is organized into two divisions: Commercial Systems and Government Systems. Commercial Systems division includes Thermal Vision & Measurement and Raymarine. Government Systems division include Surveillance, Detection, and Integrated Systems. It offers a range of sensor products, including infrared imaging cameras and systems, detector cores, CBRNE threat detectors, test and measurement instruments, radars, maritime electronics, and related products and solutions. In August 2013, Tessera Technologies Inc announced that FLIR Systems, Inc. acquired a portion of the assets of Tessera’s Micro-Optics business based in Charlotte, North Carolina.
FLIR Chart

FLIR data by YCharts

Defensive Investor – must pass at least 6 of the following 7 tests: Score = 4/7

  1. Adequate Size of Enterprise – market capitalization of at least $2 billion – PASS
  2. Sufficiently Strong Financial Condition – current ratio greater than 2 – PASS
  3. Earnings Stability – positive earnings per share for at least 10 straight years – PASS
  4. Dividend Record – has paid a dividend for at least 10 straight years – FAIL
  5. Earnings Growth – earnings per share has increased by at least 1/3 over the last 10 years using 3 year averages at beginning and end of period – PASS
  6. Moderate PEmg ratio – PEmg is less than 20 – FAIL
  7. Moderate Price to Assets – PB ratio is less than 2.5 or PB x PEmg is less than 50 – FAIL

Enterprising Investor – must pass at least 4 of the following 5 tests or be suitable for a defensive investor: Score = 5/5

  1. Sufficiently Strong Financial Condition, Part 1 – current ratio greater than 1.5 – PASS
  2. Sufficiently Strong Financial Condition, Part 2 – Debt to Net Current Assets ratio less than 1.1 – PASS
  3. Earnings Stability – positive earnings per share for at least 5 years – PASS
  4. Dividend Record – currently pays a dividend – PASS
  5. Earnings growth – EPSmg greater than 5 years ago – PASS

Valuation Summary

Key Data:

Recent Price $29.05
MG Value $11.79
MG Opinion Overvalued
Value Based on 3% Growth $19.18
Value Based on 0% Growth $11.24
Market Implied Growth Rate 6.73%
Net Current Asset Value (NCAV) $4.25
PEmg 21.96
Current Ratio 4.54
PB Ratio 2.53

Balance Sheet – 6/30/2014

Current Assets $1,363,000,000
Current Liabilities $300,000,000
Total Debt $365,000,000
Total Assets $2,402,000,000
Intangible Assets $723,000,000
Total Liabilities $750,000,000
Outstanding Shares 144,100,000

Earnings Per Share

2014 (estimate) $1.25
2013 $1.22
2012 $1.47
2011 $1.38
2010 $1.54
2009 $1.42
2008 $1.25
2007 $0.89
2006 $0.66
2005 $0.58
2004 $0.47

Earnings Per Share – ModernGraham

2014 (estimate) $1.32
2013 $1.37
2012 $1.44
2011 $1.38
2010 $1.30
2009 $1.11

Dividend History
FLIR Dividend Chart

FLIR Dividend data by YCharts

Conclusion:

FLIR Systems qualifies for the Enterprising Investor but not the Defensive Investor.  The Defensive Investor has concerns with the company’s short dividend history, and high PEmg and PB ratios.  The Enterprising Investor has no initial concerns.  As a result, Enterprising Investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with further research into the company and comparing it to other opportunities.  From a valuation side of things, the company appears to be overvalued after growing its EPSmg (normalized earnings) from $1.30 in 2010 to an estimated $1.32 for 2014.  This level of demonstrated growth does not support the market’s implied estimate of 6.73% earnings growth and leads the ModernGraham valuation model, based on Benjamin Graham’s formula, to return an estimate of intrinsic value below the price.

Be sure to check out previous ModernGraham valuations of FLIR Systems Inc. (FLIR) for better perspective!

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on FLIR Systems Inc. (FLIR)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Disclaimer:  The author did not hold a position in FLIR Systems Inc. (FLIR) or in any other company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  Logo taken from Wikipedia for the sole purpose of identifying the company; this article is not affiliated with the company in any manner.

FLIR Systems Inc. Quarterly Valuation – July 2014 $FLIR

FLIR logo.png

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 5 Undervalued Companies for the Defensive Investor Near 52 Week Lows.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a specific look at how FLIR Systems (FLIR) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): FLIR Systems, Inc. (FLIR), is a designer, manufacturer, and marketer of thermal imaging systems. The Company’s advanced sensors and integrated sensor systems enable the gathering and analysis of critical information through a range of applications in commercial, industrial, and government markets worldwide. Its business is organized into two divisions: Commercial Systems and Government Systems. Commercial Systems division includes Thermal Vision & Measurement and Raymarine. Government Systems division include Surveillance, Detection, and Integrated Systems. It offers a range of sensor products, including infrared imaging cameras and systems, detector cores, CBRNE threat detectors, test and measurement instruments, radars, maritime electronics, and related products and solutions. In August 2013, Tessera Technologies Inc announced that FLIR Systems, Inc. acquired a portion of the assets of Tessera’s Micro-Optics business based in Charlotte, North Carolina.
FLIR Chart

FLIR data by YCharts

Defensive Investor – must pass at least 6 of the following 7 tests: Score = 4/7

  1. Adequate Size of Enterprise – market capitalization of at least $2 billion – PASS
  2. Sufficiently Strong Financial Condition – current ratio greater than 2 – PASS
  3. Earnings Stability – positive earnings per share for at least 10 straight years – PASS
  4. Dividend Record – has paid a dividend for at least 10 straight years – FAIL
  5. Earnings Growth – earnings per share has increased by at least 1/3 over the last 10 years using 3 year averages at beginning and end of period – PASS
  6. Moderate PEmg ratio – PEmg is less than 20 – FAIL
  7. Moderate Price to Assets – PB ratio is less than 2.5 or PB x PEmg is less than 50 – FAIL

Enterprising Investor – must pass at least 4 of the following 5 tests or be suitable for a defensive investor: Score = 5/5

  1. Sufficiently Strong Financial Condition, Part 1 – current ratio greater than 1.5 – PASS
  2. Sufficiently Strong Financial Condition, Part 2 – Debt to Net Current Assets ratio less than 1.1 – PASS
  3. Earnings Stability – positive earnings per share for at least 5 years – PASS
  4. Dividend Record – currently pays a dividend – PASS
  5. Earnings growth – EPSmg greater than 5 years ago – PASS

Valuation Summary

Key Data:

Recent Price $33.68
MG Value $14.37
MG Opinion Overvalued
Value Based on 3% Growth $20.10
Value Based on 0% Growth $11.78
Market Implied Growth Rate 7.90%
Net Current Asset Value (NCAV) $4.28
PEmg 24.30
Current Ratio 4.90
PB Ratio 2.89

Balance Sheet – 3/31/2014

Current Assets $1,330,200,000
Current Liabilities $271,200,000
Total Debt $368,900,000
Total Assets $2,368,900,000
Intangible Assets $729,400,000
Total Liabilities $724,900,000
Outstanding Shares 141,310,000

Earnings Per Share

2014 (estimate) $1.44
2013 $1.22
2012 $1.47
2011 $1.38
2010 $1.54
2009 $1.42
2008 $1.25
2007 $0.89
2006 $0.66
2005 $0.58
2004 $0.47

Earnings Per Share – ModernGraham

2014 (estimate) $1.39
2013 $1.37
2012 $1.44
2011 $1.38
2010 $1.30
2009 $1.11

Dividend History

FLIR Dividend Chart

FLIR Dividend data by YCharts

Conclusion:

FLIR Systems qualifies for the Enterprising Investor but not the Defensive Investor.  The Defensive Investor has concerns with the short dividend history and the high PEmg and PB ratios, but the company passes all of the Enterprising Investor’s initial requirements.  As a result, Enterprising Investors following the ModernGraham approach, which is based on Benjamin Graham’s methods, should feel comfortable conducting further research into the company and comparing it to other opportunities through a review of ModernGraham’s valuation of L-3 Communications (LLL) and ModernGraham’s valuation of Raytheon Company (RTN).  As for a valuation, the company appears overvalued after growing its EPSmg (normalized earnings) from $1.30 in 2010 to only an estimated $1.39 for 2014.  This low level of demonstrated growth does not support the market’s implied estimate of 7.9% earnings growth and leads the ModernGraham valuation model, based on Benjamin Graham’s formula, to return an estimate of intrinsic value below the price.

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on FLIR Systems (FLIR)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Disclaimer:  The author did not hold a position in FLIR Systems (FLIR) or in any other company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  Logo taken from wikipedia for the sole purpose of identifying the company; this article is not affiliated with the company in any manner.  “FLIR logo” by The logo may be obtained from FLIR Systems. Licensed under Fair use via Wikipedia.

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