Harman: Why You Should Turn the Volume Up on This Industry Laggard

Earlier this week we learned that U.S. auto sales were on their best annualized pace in over a decade, with the sales rate rising to 17.2 million vehicles. And while shares of the top manufacturers surged on the news, one of the industry’s lesser-known participants has actually traded down since the release, providing investors a rare opportunity to buy a top tier innovator on the cheap. The company is Harman International Industries, a $7 billion company that designs, develops and manufactures high-end speakers for homes, cars and even stadiums, as well as making dashboard interface systems for luxury cars that integrate everything from navigation and safety to media and smartphone connectivity, all of which are bundled together into what’s known as an infotainment system. Harman is an absolute gorilla in its industry, ranking number one in every market where it competes. Harman is widely considered the gold standard in audio, both for professional grade sound systems and consumer-oriented speakers and car stereos. Meanwhile, their in-car infotainment systems are used by ten of the world’s fifteen largest auto-makers and widely recognized as the best in the business. Harman's leadership in these categories is sustainable, as its business is very much a proprietary one. The company is a serial innovator with over 5,000 patents or patents pending. This proprietary edge is the reason why Harman is constantly winning awards from both industry groups and the automakers themselves. It's the classic stealth technology name, and a stock worth keeping on your dashboard.

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