Rivals Burst Force Protection's Bubble

Fierce competition for a big government armored-truck deal is dimming Force Protection's (FRPT Quote) glow.

The Ladson, S.C., military-vehicle maker has been the biggest winner so far in the Army's mine-resistant, ambush-protected vehicles contract. But as the MRAP show goes on, Force Protection is sharing more and more of the spotlight with its rivals.

Navistar (NAVZ Quote) -- once viewed as a minor character at best -- recently grabbed the largest single MRAP order placed so far. Other players like Armor Holdings (AH Quote) and Oshkosh Truck (OSK Quote), as well as an upstart launched by Force Protection's founder, are poised to crowd the stage as well.

Wall Street is starting to worry about Force Protection shares, which have risen sharply over the last year. The company's current production capacity "is insufficient to supply the total MRAP requirements," Stanford analyst Josephine Millward stressed last month. "We continue to believe that the military will select multiple vendors for the program. ... In our view, this is positive news for the remaining bidders."

Millward's words should carry some weight. Last Tuesday, Millward predicted that Force Protection would field an order for around 500 MRAP vehicles -- or one-fourth the number the company was expecting. The military disclosed an order for 455 Force Protection vehicles that very night.

Force Protection investors, disturbed by the order's small size, hammered the company's stock and have kept it under pressure ever since. The shares, which peaked at $31 just before Navistar's surprising win, slipped 68 cents to $23.07 on Friday.