FLIR's Thermal Reaction

By Rich Duprey Yahoo Motley Fool

Given that FLIR Systems (Nasdaq: FLIR - News) shares jumped nearly 25% on news that the company was awarded a contract to provide infrared systems to a new Army helicopter, you’d have thought the deal was something new and special. 

Yes, the potential $250 million, seven-year contract to provide Textron’s (NYSE: TXT - News) new armed-reconnaissance Bell helicopters with thermal-imaging devices is the biggest contract in FLIR’s history. But it’s not really new, and it shouldn’t have been a surprise. Bell won the $2.2 billion Army contract last year, and it was known then that FLIR was part of the contract team, along with Lockheed Martin (NYSE: LMT - News) and Rockwell Collins (NYSE: COL - News). The deal should have already been factored into FLIR’s depressed stock price.....

...So the Bell contract is a big deal for FLIR, and a notable sign of the progress the company has made in its turnaround. Indeed, it may even make the business more attractive as an acquisition target from someone like Raytheon. But in terms of sending the stock up 24% in one day on the news, the deal appears to be much ado about nothing.