Thursday, January 31, 2013

WPX Energy Hints at Explosive Results in the Niobrara


Last week WPX Energy (NYSE: WPX) announced a discovery in the Niobrara shale that might ultimately double the current 18 Tcfe of natural gas 3P reserves. The discovery well produced an initial high of 16 Mcfe per day suggesting that reserves in the area are much higher than expected.

The company is one of the largest leaseholders in the Niobrara/Mancos shales that underlie the companies expansive leasehold position in more »


Disclosure: No positions mentioned. Please review the disclaimer page for more details. 



The Surging Net Payout Yield of Seagate Technology


When Seagate Technology (NASDAQ: STX) reported earnings on Monday night, it confirmed that the company had continued a massive buyback spree that began in January of 2012. Along with a current 4.5% dividend yield, the stock provides a massive net payout yield (NPY) of almost 30%.

The company is a worldwide leader in hard disk drives and storage solutions.

Seagate dropped over 9% as investors were disappointed with results more »


Disclosure: Long MSI. Please review the disclaimer page for more details. 



Urban Outfitters: No Longer the Sector Bargain


After nearly doubling over the last 15 months, Urban Outfitters (NASDAQ: URBN) appears no bargain anymore. The stock continues to trade at all time highs after reporting strong sales numbers yet the rebound appears overdone.

The specialty retail company operates under the Anthropologie, BHLDN, Free People, Terrain, and Urban Outfitters brands with nearly 500 stores mostly in the United States and Canada. It reported record holiday sales for the two more »


Disclosure: No positions mentioned. Please review the disclaimer page for more details. 



Smashingly Strong Results as This Rental Company


After a year of smashing results, will United Rentals (NYSE: URI) continue leaving analyst estimates in the dust? The company reported earnings of $1.27 for Q4 that smashed the $1.01 estimate.

A leading supplier of construction and industrial equipment for rent has become a surprising breakout star during a time period when those particular markets were expected to struggle. In fact, a prime rental equipment market of non-residential more »


Disclosure: Long TEX. Please review the disclaimer page for more details. 


Tuesday, January 29, 2013

Not Looking Good For Under Armour At These Levels


With disappointing results from other high-end retail brands, Under Armour (NYSE: UA) investors face a scary earnings report on January 31. A leading developer and marketer of athletic apparel and footwear has already seen a significant decline providing some solace that any weak results might already be priced into the stock.

The main concerns come from retail peers such as Coach (NYSE: COH) and Lululemon Athletica (NASDAQ: LULU) that have more »


Disclaimer: No positions mentioned. Please review the disclaimer page for more details. 



Investors Ignore Data Center Firms Spending Problems


Has a leading data center firm finally seen the stock stall after a strong year of gains? Equinix (NASDAQ: EQIX) now trades at a phenomenal 67x forward earnings yet investors apparently can’t get enough of the stock with it up 120% since the start of 2012.

While the stock surged to a multi-year high last week, the data center firm continues to spend more on capital expenditures than operations more »


Disclosure: No positions mentioned. Please review the disclaimer page for more details. 



Kansas City Southern Is Worth How Much?

An amazing thing in the market are stocks such as Kansas City Southern (NYSE: KSU) that are suddenly worth an amazing value such as $10 billion. How many social media stocks or recent IPOs does the market obsess about with market caps hardly above the $1 billion level? Railroads have been hot for years and Warren Buffett has already collected Burlington Northern for his Berkshire portfolio, yet how many people more »


Disclosure: Long CSX. Please review the disclaimer page for more details. 



Net Payout Yields Model Gained 21.5% in 2012

The Net Payout Yields Model maintained at Covestor gained 21.5% in 2012. The model out gained the benchmark S&P 500 by 810 basis points. The gains were slightly better than the 650 beat of the benchmark in 2011 as reported by Covestors. Already the model has gained 4.9% in 2013. Please the data copied from Covestor below:




For more information about the model, please contact Stone Fox Capital directly at info@stonefoxcapital.com or Covestor via the above link to the model.



Disclosure: Please review the disclaimer page for more details. 



Fifth Street Finance Struggles To Grow NAV

The business development companies ((BDCs)) continue to garner more investor attention as the access to a different investment class and high yields become ever more attractive. After highlighting Prospect Capital Corporation (PSEC) a few weeks back, Fifth Street Finance Corp. (FSC) now garners our attention with a yield above 10%.

Fifth Street Finance is a specialty finance company that lends to and invests in small and mid-sized companies in connection with investments by private equity sponsors. The company provides full debt structure financing solutions including: first lien, second lien, mezzanine, and one-stop. It trades as a closed-end investment company that has elected to be treated as a business development company (BDC) under the Investment Company Act of 1940.

Though the company that went public in 2008 has historically not grown Net Asset Value (NAV), Fifth Street recently reported record transaction volumes for the December quarter.

Read the full article at Seeking Alpha.


Disclosure: Long ACAS. Please review the disclaimer page for more details. 



Friday, January 25, 2013

InvenSense Finally Turning The Corner

InvenSense (INVN) has remained an appealing technology firm with huge upside potential since its IPO back in 2011. Unfortunately, the company has had to continuously throttle back expectations including the guidance for Q3 2013 provided 90 days ago.

As pointed out in previous articles, the maker of motion sensing technology had tons of potential held back by the inability to correctly forecast the growth potential.

The company reported strong results Wednesday night. The stock soared 11% on Thursday after the guidance impressed investors downbeat on the stock for most of last year. The stock might finally be turning the corner with the new CEO.

Read the full article at Seeking Alpha.


Disclosure: Long INVN and AAPL. Please review the disclaimer page for more details. 



Prospect Capital: Prospecting For Higher Dividends

In a market that can't get enough yield, it's interesting that a dividend grower can yield nearly 12%. In fact, Prospect Capital Corporation (PSEC) has consistently increased the monthly dividend ever since the bottom of the financial crisis impact in 2010.

Prospect Capital is a leading provider of flexible private debt and equity capital to sponsor-owned and non-sponsor-owned middle market companies in the United States and Canada. It trades as a closed-end investment company that has elected to be treated as a business development company ((BDC)) under the Investment Company Act of 1940.


Read the full article at Seeking Alpha.


Disclosure: Long ACAS. Please review the disclaimer page for more details. 



Key Takeaways From The Verizon Earnings Report

Prior to the open on Tuesday, Verizon Communications, Inc. (VZ) reported disappointing Q4 adjusted earnings as high subsidy costs for Apple (AAPL) iPhones hurt margins.

While the company is becoming the leading domestic provider for 4G wireless services, the biggest question in the telecom sector remains whether it can continue to generate enough cash flow to pay for the capital expenditures to constantly upgrade the networks.


Read the full article at Seeking Alpha.


Disclosure: Long VOD. Please review the disclaimer page for more details. 



Thursday, January 24, 2013

McMoRan Investors Focus Too Much on Davey Jones


Last week, McMoRan Exploration (NYSE: MMR) announced Q4 earnings that provided more of same regarding failures at the high profile Davey Jones #1 well. Considering the potential of the Davey Jones well and the famous pedigree (member of the musical group the Monkees), it can be understandable that investors ignore the other ultra-deep wells.

Back in December, the leading ultra-deep Gulf of Mexico explorer accepted a buyout along with Plains more »


Disclosure: Long FCX. Please review the disclaimer page for more details. 



Graph Search Wasn't the Most Important New Regarding Facebook


Last week, Facebook (NASDAQ: FB) announced the graph search function that grabbed the media attention for the rest of the week. Heated debates occurred on numerous media outlets on whether this search service would impact the likes of Google (NASDAQ: GOOG) and Yelp (NYSE: YELP). In the end, the stock sold off as the market isn’t as sold on the ability to monetize the service.

The leading internet social more »


Disclosure: No positions mentioned. Please review the disclaimer page for more details. 



Monday, January 21, 2013

Interesting Interview With Chegg CEO

While Chegg is a private firm, it is a top holding of GSV Capital (GSVC) allowing investors to profit from any gains by the online renter of textbooks. Considering GSVC is a small holding of the Opportunistic models, the CNBC interview with CEO Dan Rosenweig was intriguing. As of the end of Q3, Chegg was the 4th largest holding with a value of $14M or roughly 5.2% of the NAV of the company.

Rosenweig is the former COO at Yahoo (YHOO). He makes a compelling story for creating Chegg into a professionally oriented network for college students. As an investor in GSVC, the top positions of Twitter, Palantir, Violin Memory, and Dropbox are the reasons for owning that stock. The interview below was intriguing and further backs why an investment in GSVC is as much a reliance on the management team as research of the individual holdings.

 



Disclosure: Long GSVC. Please review the disclaimer page for more details. 


 

Sunday, January 20, 2013

Should Investors Bank on Gains with Green Dot?


Editors Choice

Green Dot Corp. (NYSE: GDOT), a leading independent prepaid card provider for the underbanked, announced yesterday the launch of the first mobile-focused bank. Will this turn around the prospects of a stock that has been crushed over the last year as fears of new entrants into the prepaid card sector have hurt expectations?

GoBank is designed to be the first bank account focused on being used on a mobile device more »


Disclosure: No positions mentioned. Please review the disclaimer page for more details. 




Buy the Financials Trading Below Book Value - Part 2


After the financial crisis, numerous financial related stocks traded at prices below book values due to the fears in the accuracy of their reported balance sheets. In the years since the crisis, most of those fears have disappeared yet many financial stocks haven’t regained the valuations suggested by the improving asset bases.

A prime example exists in the airplane leasing sector where the majority of the stocks trade below more »


Disclosure: Long AER. Please review the disclaimer page for more details. 


Is kate spade the Next Michael Kors?


Editors Choice

Most investors probably haven’t noticed the strong growth of the kate spade brand since it’s been wrapped up as a small component in Fifth & Pacific (NYSE: FNP). As the brand continues to grow at dizzying comps, it has quickly become a bigger catalyst for the company as a whole.

The former Liz Claiborne is probably even less known having changed names to Fifth & Pacific back in 2012. After more »


Disclosure: Long FNP. Please review the disclaimer page for more details. 



Is the Fresh and Organic Food Rally Over?

After a huge rally over the last couple of years, has the stock market lost interest in the organic food sector? As the market hits multi-year highs, organic grocery sector market leader Whole Foods Market (NASDAQ: WFM) is down 10% from all-time highs and The Fresh Market (NASDAQ: TFM) has plunged the last couple of months. The stock that hit $65 in August has fallen all the way to nearly more »


Disclosure: No positions mentioned. Please review the disclaimer page for more details. 



Thursday, January 17, 2013

Investors Ignore These Strong Results

In a surprising turn of events on Monday, Sears Holdings Corporation (NASDAQ: SHLD) investors completely ignored the surprising earnings guidance in favor of the news regarding the CEO leaving. The company reported that earnings would smash the analyst estimates of $0.86, but the market focused more on the replacement of the CEO due to family health issues. The stock plunged 6.4% on Tuesday as investors became concerned that more »


Disclosure: Long SHLD. Please review the disclaimer page for more details. 




Monday, January 14, 2013

Buy the Financials Trading Below Book Value


After the financial crisis, numerous financial-related stocks traded at prices below book values due to the fears in the accuracy of the reported balance sheets. In the years since the crisis, most of those fears have disappeared, yet many financial stocks haven’t regained the valuations suggested by the improving asset bases.

A prime example exists in the insurance and retirement services sector where both Hartford Financial Services Group (NYSE: HIG more »)


Disclosure: Long HIG and LNC. Please review the disclaimer page for more details. 



Proto Labs: The Ignored Rapid Prototyper


While the whole market is going crazy over 3D printing and rapid prototyping technologies, Proto Labs (NYSE: PRLB) remains a relatively unknown equity. The stock regularly trades fewer than 100,000 shares in a day, while sector leaders 3D Systems (NYSE: DDD) and Stratasys (NASDAQ: SSYS) regularly trade over 1M shares in a day.

The company is a leading online and technology-enabled quick-turn manufacturer. Its motto is “Real Parts, Real more »


Disclosure: No positions mentioned. Please review the disclaimer page for more details. 



Sunday, January 13, 2013

Savient Phama: The Ultimate Biotech Option

After reporting Q3 earnings, Savient Pharma (SVNT) plummeted back to $1 from the meteoric rise to nearly $3 during September. The stock has been stuck around that $1 level for the last two months. Will the new EU approval for KRYSTEXXA finally unleash the stock?

The company is a specialty biopharmaceutical company focused on developing and commercializing KRYSTEXXA (pegloticase) for the treatment of chronic gout in adult patients refractory to conventional therapy.

As written in previous articles (see here), the company was able to complete a restructuring that provided time to build the revenue base in the US. While all of those moves left the company better equipped to survive long enough for the promising new drug to thrive, Savient has yet to prove to the market that the drug will ever meet the original estimates. Will the lowered cost structure even be sufficient enough to survive?

Read the full article at Seeking Alpha.


Disclosure: Long SVNT. Read the disclaimer page for more details. 



Nuance Strikes Again

Though Nuance Communications, Inc. (NUAN) remains valued relatively cheap; investors continue to complain that the company is a serial buyer of other technologies instead of building on the existing strong product base. According to TechCrunch, the company has struck again with the purchase of virtual assistant specialist VirtuOz; a company that recently made news with a sizeable deal with Windstream Corporation (WIN).

Nuance is a leading provider of voice and language solutions for businesses and consumers around the world. Its technologies, applications, and services make the user experience more compelling by transforming the way people interact with devices and systems.

Besides this potential purchase, the company announced several interesting deals at CES suggesting the future remains bright and the owner of the android mobile operating system isn't the threat that most fear.

Read the full article at Seeking Alpha.


Disclosure: No positions mentioned. Please review the disclaimer page for more details. 



Thursday, January 10, 2013

Nat Gas Inventories Plunging

Investors need to keep an eye on the plunging nat gas inventories. The EIA reported today that inventories dropped a huge 201 Bcf for the week ending January 4th. The inventory levels are now below those of last year.









The price of nat gas remains low so that should continue encouraging the usage while at the same time E&P firms are not drilling more wells. This dual situation could eventually lead to much lower supplies and higher prices.


Disclosure: Please review the disclaimer page for more details. 



Monday, January 7, 2013

American Capital: The Buyback That Keeps Giving

The market remains so uninterested in buybacks that a company can continuously buy its own stock at a substantial discount to net asset value [NAV]. American Capital, Ltd (ACAS) is a prime example, having recently completed an 8.8M share buyback in Q4 that will again help boost the NAV.

The company bought the stock at an average price of $11.72, for a total cost of $103M. In the previous quarter, substantial purchases below book value added $0.23 to NAV. The NAV stood at $17.39 prior to the quarter's start, so it undoubtedly added to that value.

American Capital is a private equity firm and global asset manager. American Capital, both directly and through its asset management business, originates, underwrites and manages investments in middle market private equity, leveraged finance, real estate and structured products. American Capital manages $17.2 billion of assets, including assets on its balance sheet and fee earning assets under management by affiliated managers, with $101 billion of total assets under management (including levered assets).

Read the full article at Seeking Alpha.


Disclosure: Long ACAS. Please review the disclaimer page for more details. 



Sunday, January 6, 2013

Top 10 Net Payout Yield Stocks For January

This article is a continuation of a monthly series highlighting the top net payout yield stocks that was started in June (see article). The series highlights the best stocks for the upcoming month. Please review the original article for more information on the net payout yield concept.

December Returns

Below are two charts highlighting the monthly returns of the top 10 stocks from December (see list here). Due to limitations with YCharts, the chart was broken into the Top 5 and Next 5 lists.

Read the full article at Seeking Alpha.


Disclosure: Long AMP, COP, DTV, KSS, MSI, NLY, WLP. Please review the disclaimer page for more details. 


Mobile Monetization Index - January

This article is the fourth in a monthly series to analyze the stocks at the forefront of the monetization of the trend towards mobile data traffic. The original mobile monetization index highlighted the leading public companies and defined the concept.

Market Data

The expectations for the monetization of mobile traffic increased dramatically in December following the nice surprise when Facebook (FB) reported very strong mobile revenue back in October. Analysts continue to become more bullish on the concept.

Read the full article at Seeking Alpha.


Disclosure: Long AAPL, GLUU, and VELT. Please review the disclaimer page for more details. 



How Does Document Security Systems Compare To Other Patent Stocks?

Though the recent history of new patent focused stock Document Security Systems, Inc. (DSS) has been anything but negative, the stock still offers tremendous upside potential. Considering the well-documented success of VirnetX Holding Corp. (VHC) and recent success of Vringo Inc. (VRNG), investors might be surprised by the lack of initial success of those patent firms.

The first article, Document Security Systems Has Significant Patent Monetization Plans, offered a glimpse at the potential in the stock. A big key for the stock will be the execution of those plans highlighted in Important Dates For Document Security Systems. This article will attempt to compare the different patent stocks to provide a glimpse into the potential of DSS.

Read the full article at Seeking Alpha.


Disclosure: No positions mentioned. Please review the disclaimer page for more details. 



Friday, January 4, 2013

Will The New Stratasys Create The Same Returns For Shareholders?

After finalizing the Objet merger and surging to new all-time highs, what is the prognosis for Stratasys, Ltd. (SSYS)? After a major sell off to $57.77 back in early November, our analysis suggested the sector was ripe for investing. At the time, 3D Systems (DDD) remained the preferred stock in the sector. So what should investors do now?

Even with valuations sky high, the sector remained relatively obscure until recently. The December announcement by Staples (SPLS) of in-store 3D printing plans and the recent segment focus by Jim Cramer on his Mad Money show is pushing the sector into the overheated area.

Read the full article at Seeking Alpha.


Disclosure: No positions mentioned. Please review the disclaimer page for more details. 



Riverbed Completes OPNET Merger to Little Fanfare

Back at the end of October, in the midst of Hurricane Sandy, Riverbed Technology (NASDAQ: RVBD) made an accretive deal to purchase OPNET Technologies that caused the stock to plummet 18%. While investors clearly didn’t like the stock back then, the mood hasn’t improved significantly now with the stock trading between the original post announcement days range.

The deal provided the leader in the WAN optimization market inroads more at Motley Fool »


Disclosure: Long RVBD. Please review the disclaimer page for more details. 


Thursday, January 3, 2013

Blogging At The Motley Fool

For any of the Stone Fox Capital followers on Seeking Alpha, Mark Holder has begun blogging on the The Motley Blogging Network. So far 7 posts have been published. Readers can check out his posts here. A permanent link will be placed in the sidebar as well.

For at least the time being, Mark will continue publishing articles under Stone Fox Capital on Seeking Alpha as well.

Please let us know if you have any questions.


Wednesday, January 2, 2013

Not Enough Workdays to Make This Stock Attractive


Demand for software companies that cater to business clients remains strong, but not enough workdays exist in a year to make Workday (NYSE: WDAY) attractive at current market multiples. The company went public in mid-October at highly unappealing multiples that leave limited upside for the retail investor buying now.

The provider of enterprise cloud-based applications for customers to manage critical business functions trades at around 20x 2013 revenue targets. A more »


Disclosure: No positions mentioned. Please review the disclaimer page for more details. 



Buy the Nasdaq-100 Index Removals - Part II


This article is the second part of a series focused on the stocks being removed from the Nasdaq-100 Index. The first part highlighted the stocks being removed and the research behind the benefits of investing in these stocks. This one will focus on analyzing which stock might provide the best investment opportunity.

Valuation Metrics
One way to ascertain the stock that provides the best value at the current levels is more »


Disclosure: No positions mentioned. Please review the disclaimer page for more details. 



Buy Freeport-McMoRan as a Real Estate Rebound Play


Editors Choice

With the homebuilders and home improvement stocks already racking up impressive gains over the last year, investors are now looking for derivative plays to benefit from the coming rebound in the domestic real estate market. One of the most appealing stocks might just be copper producer Freeport-McMoRan Copper & Gold (NYSE: FCX).

The company is one of the world’s largest miners of copper, gold, and molybdenum in terms of reserves more »


Disclosure: Long FCX. Please review the disclaimer page for more details.



Tuesday, January 1, 2013

A Ruckus of an IPO


Editors Choice

When Ruckus Wireless (NYSE: RKUS) went public in mid-November, the stock immediately crashed from an opening price of $15 all the way to close at $12.25 for an 18% loss on the initial day. A month later the stock has soared to a high of $20 highlighting the issues with the IPO market.

The market for IPOs remains as arcane as decades ago with institutional investors blocking out individual more »


Disclosure: No positions mentioned. Please review the disclaimer page for more details.