SPAR

**itor06** Sat May 06, 2006 3:02 am

SPAR
Pros:
1. Five continuous growing Q.
2. 1Q 06 EPS 0.35. In year 05, EPS 0.65 (including small part of non-recurring), trading around 15pe. Year 03 @ 28pe, 02 @ 20PE.
3. Fire rescue truck business is good. RV(recreational vehicle) business decrease a little but company see growth in 06.
4. Add new order to supply chassis for an additional 79 Cougar Joint Explosive Ordnance Disposal Rapid Response Vehicles (JERRV). Previous order is for 100 JERRVs.
Cons:
1. Niche market. Highly uncertainties of the industry trend.
2. Growth of its traditional business sounds uncertain and should be slow (What is the effect of the new Clean Air Act?). Will it be sustainable? Not sure whether they could get new orders for JERRV. FRPT.OB is better for JERRV play because it should have better profit margin (need researches).

Suggested operation:
1. Sell high before the 2Q06 result.
2. Target: 15pe*1.2(my estimation EPS) = 18.