Force Protection, Inc. (FRPT)

This company makes some of the best vehicles for soldiers today. I used to be an EOD Technician in the US Army, and have personally used the JERRV model that Force Protection makes while deployed to Iraq. It is an outstanding vehicle. It has a longer range than the standard HMMWV, it can be configured for almost any mission that may come up, and it has a great air conditioning system that allows soldiers to perform better in 120+ degree heat. Its armor design is amazing. I have been inside one of these vehicles during direct IED strikes, and I swear by its armor. One IED in particular detonated directly underneath the vehicle, and due to its size and placement, this IED would have killed at least one, if not all of the occupants inside a HMMWV. Lucky for us, we were inside a JERRV, and when the IED detonated directly underneath my seat, all it did was pop my foot off the floor and sound like someone hit the outside of the truck with a hammer. The armor alone is unbelievable, but coupled with the V-shaped hull design, it makes this truck nearly impossible to destroy.

Granted, the boast that no one has ever been killed inside a Force Protection vehicle no longer holds true, but with the types of IED’s used in Iraq today, no vehicle can withstand them all. That being said, the MRAP series of vehicles made by Force Protection save lives every day in Iraq and Afghanistan, and it doesn’t go without notice. Commanders across the Army and Marine Corps are calling for them, and there is a HUGE push right now to get more of these vehicles out to the force.

In addition to the vehicles being pushed out to US troops, there are also versions of the vehicle that are being fielded to the Iraqi Army. These versions are cheaper, with less armor and capabilities, but they are being fielded at a faster rate. This company has a great product, a growing demand, and has built themselves a relationship and experience with the Department of Defense. Force Protection is in a good position to grow in the coming years.

I first heard about this stock when it was trading at about $1. I watched it go to $4 dollars, and didn’t think much of it. Before I knew it, it was at about $12, and I recommended it in CAPS shortly thereafter. It went almost to $30, just after I ended my pick at around $20.

When a company introduces a new piece of equipment to the military, it takes a while to work out bugs, get parts standardized, and work through red tape. Force Protection is much farther along than most of the other companies, which presents a growing moat for them. During my second tour in Iraq, my battalion maintenance NCO worked directly with Force Protection representatives to fix problems and to improve on the existing platform. I watched as many of our suggestions and complaints were being added and fixed in the newer trucks coming into theater. It was great to see, but it showed how much work needed to be done to streamline the system. The reason I ended my CAPS pick for FRPT at around $20 was because I saw the stock price outgrowing the company’s progress. Not that FRPT didn’t have the growth potential, they just had a few more humps to get over before they could stand up and sprint. Now that they have fixed more of their problems, along with the stock’s much more conservative valuation, I am back with this stock.