Force Protection Inc. (Nasdaq:FRPT) is set to report earnings Monday, May 11, 2009 before the market open (FRPT earnings webcast).

Force Protection, Inc. is the world’s leading manufacturer of ballistic- and blast-protected vehicles, which have been used to support armed forces and security personnel in Iraq, Afghanistan, Kosovo and other hot spots around the globe.

Headquartered on a sprawling campus near Charleston, South Carolina, Force Protection also has become the nation’s leading center for blast protection technology and research to counter improvised explosive devices (IEDs).

FRPT is expected to earn 8 cents for its 1st quarter. We expect the Trucks & Other Vehicles company to announce earnings that will beat investors’ and analysts’ expectations.

The last two earnings announcements have seen FRPT share price rise by 15.6% and 14.6%. Apparently some investor(s) are expecting another big move or have created a major hedge as FRPT has seen some gigantic action in its May call options. The May 7.5 call option has an open interest of 20,002, the May 10 call option 4,268. The May 5, 7.5 and 10 put options have a combined 625 open interest.

The 40:1 call option to put option ratio in open interest is an extremely bullish reading as almost all the bets are on the call option side of the ledger. However, there are some investors who see this lopsided ratio as a contrarian indicator.

Fundamentally FPRT is good shape as it passes our tests on some key metrics. With a PEG ratio of just .83, trading at merely 36 cents for every dollar in sales and with a hefty return on equity of 18.4%, FRPT’s share have plenty of room to rise.

FRPT stock has been down a bit as late, but its fortunes may turn quickly as they are 1 of 5 finalists for a new Pentagon contract for somewhere between 2,000 and 10,000 vehicles for Afghanistan. Hopefully management can provide some guidance or good news in its upcoming conference call.

Suggested Stop: $6.17