Force Protection--A Cult Following

Charles Bradlaugh (1833 – 1891), a colorful freethinker and political activist in England, said: “Without free speech no search for truth is possible... no discovery of truth is useful.”

When I posted the commentary on Force Protection yesterday, I did not know that I was stepping on a landmine—planted by the ‘longs’ in the Common Stock! According to http://www.shortsqueeze.com/, the days to cover the open short interest in Force Protection (FRPT) is only 1.2 days (779,931 shares shorted). Looking at the comments left on my blog, however, the BULLS believe that my posting is part of some concerted ‘SHORT’ conspiracy to test their faith:

• “I think if you had a son over in Iraq you would be begging for him to be in a Cougar. Your little write-up about FRPT seems suspicious at best. You sound more like a short.”

[Ed. reply: You are correct—if I had a son in Iraq, I would want him to travel in a blast-protected military vehicle like the Cougar. It is the policy of the 10Q Detective to fully disclose whether or not I or any of my staff has a position—long or short—in any stock that is posted on this blog. To be honest, I wish that I established a long position in the Common Stock of Force Protection—nine months ago when the share price was still trading at the $1.00 per share level. That said—I’m sorry, but the current valuation—given MY ASSUMPTIONS—is ahead of the fundamentals.]

• “Please!....U are missing the big picture of FRPT....I suggest U continue to do greater DD [sic. Due Diligence] via contacting Marc Robbins at Catalyst Financial(its obvious U didn't!), and read the FRPT Ragingbull message board(there is some really great info there).”

[Ed. reply: I spent more than fifteen hours—yes, 15 hours, doing the necessary due diligence sufficient to write a ‘balanced’ report.]

• “….More information is available from Marc Robins, CFA at Catalyst Research….”
  
  http://catalystresearch.biz/ResearchFRPT.html”Use the link below to get the real deal on FRPT. They have a 9.00-12.00 conservative price outlook on FRPT.... http://catalystresearch.biz/files/FRPT_Note_08_15.pdf

[Ed. Response: And speaking of Full Disclosure: Force Protection is paying Catalyst Financial Resources $6,000 per month for 12 months for services rendered.]

• “FRPT pps [sic. Price per Share] will be north of $20+ next year (conservatively)....why?? The demand for FRPT's products are staggering World-wide….”

[Ed. Reply: Even if the demand is outstripping supply, where do you come out with a $20.00 valuation? The Company’s (factory) capacity utilization cannot put out enough Cougars on a monthly basis to justify such an exorbitant P/S ratio. And remember-the DoD can cancel any contract at any time. If a Democrat—like H. Clinton is elected in 2008—watch out saith the Republicans]

• “WAR IS HERE FOR A LONG TIME AND SO IS THE NEED FOR IED SOLUTIONS. NUMBERS MEAN NOTHING AT THIS POINT IN THE INVESTMENT….”

[Ed. reply: You are correct. As long as man has the capacity and the free will to kill—he will. War is not going away. Read my recent posting on Halliburton Corp. WAR—What is it good for? P-R-O-F-I-T-S!]

• "…you were remiss by failing to mention the Force Protection / BAE alliance which is supplying Cougars for the Iraqi police (over 1,000 vehicles).”

[Ed. Reply: Force Protection is the subcontractor on a BAE Systems agreement to supply (up to) 1,050 Light Armored Vehicles to the Iraqi army. The Iraqi Light Armored Vehicles are similar to the Cougar armored vehicles and will include Force Protection's V-shaped hull designed to deflect the force of explosions away from passengers inside the armored hull.]

• “I would like to know in all of your analysys [sic. Spelling] why there is no mention of the contract with the U.K. This in itself shows that the companies [sic.] future is looking much brighter and has not only the need to expand but is gaining the capitol [sic.] to expand. If you decide to revise your review you might want to add that part in.”

[Ed. note. This contract announcement was mentioned in the posting: [See Investment Risks & Considerations. Force Protection markets its products to a limited customer base…. As previously mentioned, the Company did just receive a contract with the British government for 85 Cougar armored vehicles.]

• Are you part of Al Qaeda? Only Al Qaeda has a beef with Force Protection….Be sure and tell Osama those IED's aren't working on the Cougar's and Buffalo's. Maybe you should ride in one of those Humvee's over an IED and you might have a different prospective on FRPT. Better yet, interview a young soilder [sic] sitting in a hospital missing an arm or leg because he wasn't provided a Cougar. You should be ashamed Mr. Phillips!
• “Dude, this analysis isn't even on a 3rd grade level. Did you actually recommend paying a defense lobyist? Right...great idea…..”
• “I just would like to remind everyone what a schmuck and bad stock picker Cramer is. THIS GUY ONE OF HIS BITCHES.”

[Ed. note. Yup. Ad hominem argument wins me over every time! Who is the research analyst/firm making $72,000 for coming out with a bullish report on Force Protection? The 10Q Detective does not receive remuneration for any posting—good news or bad.]

A famous line from an ode by Horace goes—"Dulce et decorum est / Pro patria mori," (meaning "It is sweet and proper to die for the fatherland")—I guess the same goes for a cult.

As I said in my original posting: (For the BULLS)—A turnaround at Force Protection is well underway…(Now one for the BEARS)—but lingering concerns on future contract wins will likely put a ceiling on further multiple expansion….(And, now one for the BULLS)—A step-up in new product flow coupled with new contract wins—especially Humvee replacement orders—are the necessary positive catalysts for additional short-term trading gains in the price of the Common Stock….And, now to Duck and Cover—The 10Q Detective, however, prefers to stay on the sidelines….