Harman International Industries comes in at #2 in the week-long countdown of the top five S&P 500 stocks to own for 2015. Harman is a $7 billion company that makes high-end speakers as well as dashboard interface systems for higher-end 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. Now shares of Harman have sold off in recent weeks over reports that Google is aiming to enter the infotainment space. But these concerns are unwarranted, as Harman is actually partnering with Google’s Android system in an attempt to embed its software within the car. No one is displacing Harman because it is an absolute gorilla in its industry, ranking number one in every market where it competes. It is widely considered the gold standard in both professional audio and infotainment, and its leadership in these categories is surely 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. The company is projected to grow 20% annually for the next 5 years, giving me confidence in my $125 price target, which is 25% higher from its current price.
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