AFTER-
HOURS
PRICE
AFTER
TALK: 

26.37 

Spartan Motors, Inc. (SPAR)...

I didn't like it, and it's only covered by three tiny boutique firms... no big-shot analyst coverage.

I'll be honest.  Frankly I thought this one was barely worth my attention.  One of those sleep-inducing stocks...

I thought SPAR was levered to municipalities.

They make a chassis for fire trucks and emergency vehicles...nothing to get too excited about.

They're levered to RVs.  But, when you're worried about gas prices, who wants to buy an RV?

They're levered to Iraq.  They make the underbelly of the armored military vehicle.

Then I did some homework.

My new friend Dan (at Indiana University last night) was right about SPAR.  And I was wrong.

SPAR is a buy!

It's an idea totally worth stealing.

SPAR is a small-cap stock that might now fit your risk profile.

.  .  .  .  .

The company does two things.  It makes all kinds of chassis, and it makes emergency vehicles.

I didn't think the emergency vehicles play was any good at all, and then I looked at the data...

And then I saw that, nationwide, we've got an aging fleet of these things.  54% of them are 15 years old.  A third are over 20 years old.

You don't want your ambulance breaking down, because it's just too darn old.  You don't want the fire engine transmission to be shot.

These are old emergency vehicles and they're a huge safety concern.

I may not like stocks in general that are levered to municipalities, but SPAR is levered to their liabilities...

The one sure-fire way to get money out of local government is by selling them a product that prevents lawsuits... Enter SPAR.

Then there's this chassis business... which I'm liking...

I'm liking it for the military end of things.

Even if you believe we're out of Iraq by 2008 - which frankly seems preposterous to me, even with the Democrats' threat - SPAR works.

If you look over the big pentagon budget, you'll see that the big winners are companies that are levered to what is called 'mine-resistant, ambush-protected' (i.e., 'MRAP') vehicles. 

SPAR is one of those companies.  It's at the epicenter of MRAP...

Everybody knows that our guys have been woefully unprepared to deal with the roadside bombs, the improvised explosive devices (i.e., IEDs)...

But now the military is finally spending a lot of money to protect our soldiers from this stuff, and nobody in congress wants to block that kind of spending.  At least not in public.

Enter the Cougar!... which SPAR makes the chassis for.

This thing is covered with half an inch of steel plate, and is proving resistant to roadside bombs... no fatalities yet in a Cougar.

The Cougar is a must.  Under the MRAP program, SPAR's recently gotten two huge orders.  One on January 23rd.  One just a month ago, on March 6th, for $23.4 million, and $16.4 million, respectively.

Hey, even after that... These are orders from two big defense contractors... they only have 3% of the potential orders.  3%.

I think protecting our troops from roadside bombs is a great business for SPAR.  It's the reason its military division has the most growth.

By the way, if I were a defense contractor, this is a natural acquisition for me, because anybody who assembles the finished product, probably wants this product too.

The stock gapped up on the most recent order, but I don't think it's coming in (i.e., the stock price will go down), because the estimates keep rising...

.  .  .  .  .

Last, but not least, there's the RV business, which I was also wrong to dislike.

It turns out it's in a secular growth mode.  Baby boomers like these things and they make up a quarter of the population.

Do you know that 1 out of every 12 boomers has an RV?  And we can't forget that the elderly have tons of money, and they'd rather spend it on an RV, than spend it on one of those fancy-schmancy expensive hotel rooms.

SPAR makes the chassis for the top manufacturers, and I'll admit that this could be a good thing.  But, even if it's not, I don't see a lot of downside from the RV segment.

You know these things because they lost their arrangement with Fleetwood (i.e., an RV maker), and the stock barely skipped a beat.

SPAR has been doing really well.  Net income up 102% last year.  They blew away the numbers last quarter.

Balance sheet... superb.

Any stock that trades at 18x forward earnings, that's growing at a 35% clip, looks pretty good from where I'm standing...   

.  .  .  .  .

The bottom line!:    Dan (from Indiana) did some quality work.  I'm going with Dan from the Reese Fund.  I'm going with IU.  And I'm going with SPAR.  Now you go with Cramer.