Papers, Please

Washington, D.C., never wants for looming deadlines, and here’s a date that has Beltway bureaucrats and contractors scurrying: Oct. 27, 2006. That is when all federal agencies must be able to issue employees identification cards meeting technological standards demanded by President George W. Bush and developed by the National Institute of Standards and Technology.

“Everyone is working hard to meet this challenging deadline,” chirped a White House press release last week.

Whether everyone meets the deadline or not doesn’t matter much to Jay M. Meier, senior analyst at Minneapolis’ MJSK Equity Research. “If it’s Oct. 27 or March 27,” he says. “I don’t care.”

Meier covers a handful of technology outfits, several with an interest in credentialing: Fargo Electronics, Identix, LaserCard and Zebra Technologies. While his ratings vary among those stocks, he’s bullish on the identification business as a whole, deadlines or no. “The opportunity is so big,” he argues.

Full story at Forbes.com

Defense Play: Big, Cheap And French

WASHINGTON, D.C. – Investing, internationally or otherwise, requires making contrarian calls now and then. Thales, a French defense and technology concern, looks like one such situation.

Thales’ Paris-listed shares are down 25% from a 52-week high (a U.S.-listed depositary receipt is thinly traded over the counter and not sponsored by the company). By several measures of valuation, the stock looks cheap relative to industry averages for both European and North American aerospace and defense concerns.

It also looks reasonable relative to its own history. For example, it changes hands at 6.8 times cash flow (in the sense of net income plus depreciation and amortization). Over the last five years, the average is 8.8.

Full story at Forbes.com

Interstate Highways: Big Numbers In Washington

WASHINGTON, D.C. – Long before there was an Interstate Highway System, there were highway lobbyists. In fact, the American Road and Transportation Builders Association, or ARTBA, was founded 104 years ago. As the Interstate turns 50 this week, ARTBA is using the occasion to pound the table on its policy priorities.

As part of that effort, ARTBA’s formidable economics staff has put out a barrage of statistics on the Interstate’s economic 50-year impact and outlook. The stats make good fodder for the ARTBA’s arguments on expanding highway capacity. They’re also startling for anyone presently bothered by traffic congestion.

Full story at Forbes.com

Flir Systems: Seeing Beyond Government Sales

WASHINGTON, D.C. – It’s been a frustrating year for shareholders in Flir Systems, the maker of thermography and infrared imaging technology. The stock has lagged the S&P 500 by 22 percentage points and trades 35% below a 12-month high set last August.

The slow spell could be a good time to do some buying. “Flir has an interesting story to tell,” says Michael Davies, senior research analyst at Next Generation Equity Research and a bull on the company (his employer does no banking or other work for it).

Part of what makes that story interesting, as Forbes reported last October, is Flir’s products and customer roster. The Wilsonville, Ore., company sells gadgets like portable thermal imagers, which law enforcement or military personnel can use to track targets obscured by darkness, dust, haze or other obscurants. Flir’s cameras are the most widely used to monitor the U.S. border.

Full story at Forbes.com

In The Eye Of The Global Warming Storm

WASHINGTON, D.C. – Asked to name his most formative Washington experience, Thomas Kuhn comes back with a quick reply: the Clean Air Act. Kuhn, the chief executive of the Edison Electric Institute, the electric utilities trade group, remembers the tumult that accompanied the passage of that 1990 law.

“Some of the toughest battles in Washington are the environmental battles,” says Kuhn.

And judging by some of the rhetoric flying around Washington this week, more of such battles loom. “Global warming, I believe, is the number one environmental challenge,” Sen. Dianne Feinstein, D-Calif., told a crowd of several hundred who gathered on Wednesday for the United States Energy Association’s and Johnson Controls’ annual Energy Efficiency Forum. “We have to choose our energy future,” added colleague Sen. Hillary Rodham Clinton, D-N.Y. “We can’t just stumble along and expect everything to work out.”

Full story at Forbes.com

Veterans Data Debacle: Biz Opportunity?

WASHINGTON, D.C. – What a mess. At the end of May, the U.S. Department of Veterans Affairs acknowledged that thieves had made off with a laptop containing Social Security numbers and other sensitive information for as many as 27 million veterans.

On Wednesday, five veterans groups filed a class action seeking, among other relief, $1,000 for each veteran able to demonstrate being harmed by the data loss.

But, as often happens in business, one man’s disaster is another’s opportunity. For Nicholas Magliato, chief executive of Trust Digital of McLean, Va., situations like the VA’s serve as a way to fire up his 50 employees.

Full story at Forbes.com

Power Player

Not much has changed since the reformers went after stock analysts in the aftermath of the tech bust. Brokerage firm analysts are still, for the most part, bullish; it’s hard to make a living telling people what not to buy. And their employers still make much of their revenue doing investment banking for companies the analysts are expected to evaluate. Still, the best of the breed certainly earn their keep by making accurate forecasts of earnings. Sanjay Shrestha is one of these.

Shrestha fits the sell-side archetype. He rates 15 of the 18 stocks he covers a “buy” or a “strong buy,” and many of those are companies for which his employer, First Albany Capital, either makes a market or does investment banking. That hasn’t stopped him from making extremely accurate predictions about earnings. For two years he has won a spot in our Best Analysts rankings, based on data maintained by StarMine about individual forecasts.

The 32-year-old Shrestha is quick with a laugh and holds forth freely on topics such as the implications of the polysilicon shortage, the history of 20th-century energy infrastructure or the political turmoil that has recently shaken Nepal, the land of his birth. He has hopes for a return to peace in Kathmandu and is grateful for the opportunities he’s had in America. On an undergraduate scholarship to the College of St. Rose in Albany, he switched from his prior interest in science to finance and turned that background into a Wall Street career. In 2000 he took a job at First Albany covering companies that are developing new energy technologies. Two years later he added the engineering and construction services sector.

Full story at Forbes.com (reg. required)

The Gatekeepers

WASHINGTON, D.C. – It’s not hard to see why FIFA, soccer’s governing body, chose Munich, Germany, to host the 2006 World Cup’s opening ceremonies and match. The city’s 69,000-seat soccer stadium, Allianz Arena, is a spectacle itself. Finished in April 2005 at a cost of €280 million, the orb-like structure’s façade radiates color thanks to three thousand foil panels that can each glow red, white or blue.

The stadium also showcases hooligan-addled FIFA’s efforts when it comes to safety and security. Take the automated access system, which can admit those 69,000 fans in an hour and a half, funnel supporters of opposing teams to separate sections, track occupancy of those sections in real time, block tickets in the event of theft or loss, and regulate turnstiles to ensure orderly exits.

For the designer of that access system, SkiData of Salzburg, Austria, the World Cup is no less of a showcase event. The company, which is owned by Geneva-listed Kudelski, a Swiss technology group, hopes the tournament’s exposure will entice more customers, notably North American ones, to upgrade to its ticketing gear.

Full story at Forbes.com

Stock Picking Contest: Update

Halfway through our annual stock picking contest, the bears have the edge. On average, their picks have declined 1%, versus the market’s 5% advance since last Halloween. Bulls, as a group, are just beating the market with a 6% gain as of yesterday’s close.

We call this exercise “Love Only One,” and we’ve been doing it for decades. The gist of it is to pit the finest minds on Wall Street against the market. Twelve bulls each give us one stock they think will beat the S&P 500 over a one-year period, while five bears offer up one that need only lag the index’s performance. Anyone successful gets invited back for another year.

Full story at Forbes.com

Congress Tees Up Dividend Stocks

WASHINGTON, D.C. – In early March, we noted that Beltway analyst Stuart Sweet saw a 70% likelihood that Congress would extend tax rate cuts on dividends. It took a bit longer than Sweet expected, but that extension now appears to have a rendezvous with President George W. Bush’s pen.

At the time of our earlier story, we also relayed that Sweet, based on his bullishness on the tax-cut extension, was advising clients to consider stocks paying nice dividends. So we put together a list of five dividend standouts. As of midday today, that group was up 8%, on average, versus the market’s 3% advance.

Full story at Forbes.com