Thursday, February 28, 2013

Aruba Networks Soars As Dilution Is Reduced


Aruba Networks (ARUN) has long been an interesting stock. The provider of next-generation network access solutions for mobile enterprises had a serial issue with diluting away the strong revenue growth. It reported Q2 2013 earnings that exceeded the market estimates, sending the stock higher in after-hours trading.

Previous research for this article (see Aruba Networks: Revenue Growth Disappears In Thin Air) had suggested ignoring this stock until revenue growth actually flowed to the bottom line. Back then; the company had 34% revenue growth in the December 2011 quarter that lead to earnings only increasing from $0.14 to $0.16. Has management finally changed the tune to suit shareholders?

Read the full article at Seeking Alpha.


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



Millennial Media: When 68% Growth Isn't Enough


After the close on Tuesday, Millennial Media (MM) reported Q4 2012 earnings that greatly disappointed the market due to substantially lower revenue than expected. While the company reported earnings in line with expectations based on solid margins, it failed to predict the shortfall in several large brand deals sending the stock down over 25% in after-hours.

The company is the leading independent mobile ad network provider. Its technology, tools, and services help developers maximize their advertising revenue, acquire users for their apps, and gain insight about their users. The company has a platform that enables advertisers powerful Mobile Audience Solutions (MAS) that use the significant scale, sophisticated targeting and uniquely engaging creative capabilities to deliver meaningful results.

The article (see Buy Millennial Media Prior To Q4 Earnings) had suggested buying the stock prior to this earnings release as all data pointed towards huge numbers. Even with the missed revenue numbers, the company still reported nearly 68% growth. The results are similarly disappointing as those of fellow mobile advertising firm Velti (VELT) that continuously disappoints even in the midst of a surging market.


Read the full article at Seeking Alpha.


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



Wednesday, February 27, 2013

Do You Know the Earnings Growth at Jack?


After the close last Wednesday, Jack in the Box (NASDAQ: JACK) reported smashing results that easily beat analyst estimates. In fact the company has been on a tear lately of easily surpassing those estimates in each quarter during 2012.

The company operates and franchises Jack In the Box restaurants with more than 2,200 restaurants in 21 states. Additionally, the company operates and franchises Qdoba Mexican Grill with more than more »


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


Is Green Dot Cheap Based on the NetSpend Buyout?


After last writing about Green Dot (NYSE: GDOT) as a potential winning stock based on the new mobile banking platform, the stock has crept higher. The leading independent prepaid card provider for the underbanked got a boost on Tuesday after TSYS (NYSE: TSS) agreed to buy NetSpend (NASDAQ: NTSP) for $1.4 billion.

Considering Green Dot is the leader in the sector though only worth $540 million, investors should consider more »


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



The Surprisingly High Yields of Defense Contractors


The defense sector has been under attack for the last few years as federal government budget cuts pressure the major companies in the sector. The surprising part is that the associated stocks continue to support very strong dividend yields combined with major stock buyback programs.

Lockheed Martin (NYSE: LMT), Northrop Grumman (NYSE: NOC), and Raytheon Company (NYSE: RTN) have not only survived the cuts, but in most cases the companies more »


Disclosure: Long LMT, NOC, RTN. Please review the disclaimer page for more details. 



Thursday, February 21, 2013

Should Investors Buy the Asset Managers on Rebounding Equity Flows?

After years of outflows from equity funds should investors finally invest in the asset managers as the money starts flowing back? One key to the equation is that most of the money flowed into bond funds that have low average fees placing an importance on finding the asset managers with the least exposure to bond funds. Or at least the ones that will see those funds rotate into equity funds more »


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



Has Angie's List Finally Turned the Corner?


Editors Choice
After a rocky start as a public company, has Angie’s List (NASDAQ: ANGI) finally turned the corner? The company that regularly spends a major portion of revenues on sales and marketing was able to generate strong membership growth by only increasing marketing spend by 10% in Q4. Will the company be able to continue the trend in 2013?
The company helps consumers find local service professionals in more than more »

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



Wednesday, February 20, 2013

Will A New CEO Deliver Gains For Chesapeake Investors?


With the surprise retiring of Chesapeake (CHK) CEO Aubrey McClendon a few weeks back, will investors benefit from the company shifting towards a more disciplined strategy? Or will the company remain on the same collision course with debtors?

The company is the second-largest producer of natural gas, a top 15 producer of oil and natural gas liquids, and the most active driller of new wells in the United States. The company's operations are focused on discovering and developing unconventional natural gas and oil fields onshore with leading positions in the Eagle Ford, Utica, Granite Wash, and Mississippi Lime unconventional liquids plays and in the Marcellus, Haynesville, and Barnett unconventional natural gas shale plays.

While most investors don't doubt that Chesapeake owns the largest domestic oil and natural gas resource base, the question exists as to whether shareholders will reap the value of those resources due to a huge debt load.

Read the full article at Seeking Alpha.


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



Did CenturyLink Just Become A Gold Mine To New Investors?


Last week CenturyLink, Inc. (CTL) did the unthinkable by slashing the dividend in favor of a more flexible stock buyback program. In response, investors slashed the stock price 26% to correspond with the dividend cut. Were investors being rational?

Per the company, it is the third largest telecommunications provider in the United States and is recognized as a leader in the network services.

Read the full article at Seeking Alpha.


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



Buy Baidu At Much Cheaper Prices Now


Based on the post earnings sell-off of Baidu (BIDU), investors now get the opportunity to buy the market leader in the explosive Chinese market at a substantial discount to growth potential. While investors fret over the increased costs and the transition to mobile search, they missed the big picture that mobile will eventually lead to much higher traffic for a country with only 42% Internet penetration.

The company is the leading Chinese language Internet search provider with over 70% market share. As mentioned prior to earnings on February 4th, the company is an extreme value with strong growth potential.

The stock reached close to all-time highs last April around $150 and a market value of $55B. The stock fell off the China cliff until December and has returned back to those levels since the recent sell-off. While investors mull over more competition from Qihoo 360 Technology (QIHU), the real issue remains a market transition outside of the control of the company. The transition to mobile should ultimately expand the search market in China even if it reduces profit margins this year.

Read the full article at Seeking Alpha.


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

Note: Stock was purchased on 2/20 after the article was published. 



Tuesday, February 19, 2013

Coming Soon: More Losses At Clean Energy Fuels


The promise of a national natural gas highway continues to be a money-losing ordeal for Clean Energy Fuels Corp. (CLNE). The company reports Q4 2012 earnings on February 28th and analysts have become increasingly bearish over the last few weeks. A big concern with the stock remains that the company has been unable to establish a large market while the natural gas fuel is extremely cheap.

Per the company, it is the largest provider of natural gas fuel for transportation in North America and a global leader in the expanding natural gas vehicle fueling market.

A key component to the Q4 earnings report will be an update on the natural gas highway and the natural gas engines being built to support the use of the highway by long-haul trucking industry.

Read the full article at Seeking Alpha.


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



An IPO Xooming Too High


On Friday, the IPO for the cash-transfer service provider Xoom, Inc. (XOOM) soared 59% after being priced above the initial range. After reading the final prospectus, the company harkens back to the technology IPOs of the late 1990s when a stock had as much hope as hype.

The company is a global online money transfer provider, focused on helping consumers send money in a secure, fast, and cost-effective way using their mobile phone, tablet or computer. Xoom has 750,00 active customers that sent more than $3.2B to family and friends in 30 countries worldwide during 2012.

With a revenue base of $80M, Xoom follows in the footsteps of the recent ExOne (XONE) IPO (see Does The ExOne IPO Offer Any Value?) where the company was substantially smaller than companies going public over the last few years.

Read the full article at Seeking Alpha.


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



Sunday, February 17, 2013

American Capital: Surging NAV With More Upside Potential


Strangely, the stock market continues to allow a company to repurchase stock at a substantial discount to net asset value (NAV). American Capital, Ltd (ACAS)has completed a 52M share repurchase program for nearly $500M over the last 6 quarters at an average discount to a continuously soaring NAV of nearly 40%. The stock though continues to trade at a substantial discount even after having the ability to spend that much cash.

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 $18.6 billion of assets, including assets on its balance sheet and fee earning assets under management by affiliated managers, with $117 billion of total assets under management (including levered assets).

The question remains why investors allow the stock to trade at the dramatic discount to the assets of the company. Especially considering signs exist that the company conservatively reports NAV.

Read the full article at Seeking Alpha.


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



Buy Millennial Media Prior To Q4 Earnings


Millennial Media (MM) remains the leading independent mobile advertising network with a market share behind Google (GOOG). The company had one of the hottest IPOs in 2012 yet the stock fizzled from day one. As the mobile advertising market heats up should this stock trade near the lows?

The company is the leading independent mobile ad network provider. Its technology, tools, and services help developers maximize their advertising revenue, acquire users for their apps, and gain insight about their users. The company has a platform that enables advertisers powerful Mobile Audience Solutions (MAS) that utilize the significant scale, sophisticated targeting and uniquely engaging creative capabilities to deliver meaningful results.

The company reports earnings on the 19th and investors should consider entering the stock prior to the release as mobile advertising heats up.

Read the full article at Seeking Alpha.


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



A Cheaper Nuance By The Day


Nuance Communications, Inc. (NUAN) remains a stock long on potential and short on performance. The company reported Q1 2013 results that largely missed estimates and provided disappointing guidance. The stock initially sold off 18% the following day and continues to get cheaper by the day after hitting 52-week lows on Tuesday. While the company continues to disappoint, the market ignores the valuation. A company that earns nearly $2 a year is still a company that generates strong profits regardless of its ability to meet estimates.

The company 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.

Read the full article at Seeking Alpha.


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



Thursday, February 14, 2013

Does The ExOne IPO Offer Any Value?


After a 47% gain on the opening day and another huge follow-on gain Friday, does ExOne (XONE) offer any value now? First, investors need to understand that the company competes in the ultra hot 3D printing sector with the likes of 3D Systems (DDD) and Stratasys (SSYS). Second, the company is a throw back to the old technology IPOs with a revenue base of only $30M in 2012.

The company focuses on manufacturing and selling 3D printing machines for industrial customers and printing products to specification for customers using in-house 3D printing machines. The company has Production Service Centers (PSCs) located in the United States, Germany and Japan. It also supplies consumables and replacement parts for the machines to print products.

The stock provides the unique opportunity of investing in a very small company prior to massive growth. While ExOne priced with a market value of roughly $240M, both 3D Systems and Stratasys already approach the $4B mark. While market cap is no sure sign of future gains, it is much easier to grow from $300M to $3B than from $3B to $30B.

Read the full article at Seeking Alpha.


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



Prospect Capital: Prospecting For Even Higher Dividends

When last writing about Prospect Capital Corporation (PSEC), the stock traded right above Net Asset Value (NAV) with fears of another capital raise. After reporting Q4 results last week, management calmed the fears of another capital raise due to strong liquidity. The dilemma remains on whether to invest now and collect the high monthly dividends or wait for a capital raise that might never happen.

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.

The stock continues to yield nearly 12% after possibly the smallest monthly dividend increases in the market. The company continues to raise the monthly distribution by a fraction of a cent.

Read the full article at Seeking Alpha.


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

Should Investors Buy the Asset Managers on Rebounding Equity Flows?

After years of outflows from equity funds should investors finally invest in the asset managers as the money starts flowing back? One key to the equation is that most of the money flowed into bond funds that have low average fees placing an importance on finding the asset managers with the least exposure to bond funds. Or at least the ones that will see those funds rotate into equity funds more »


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



Should Investors Buy ConocoPhillips if the Company No Longer Does?


Over the last few years, ConocoPhillips (NYSE: COP) was a huge buyer of its own stock. Unfortunately for investors the company has suddenly stopped buying the stock over the last two quarters. Should investors hold onto the stock if the company isn’t buying any more?

After the spin-off of the refining business, Phillips 66, last year, the company is now a leading independent oil and gas producer. The stock more »


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



Wednesday, February 13, 2013

4 High Yielding Resource Stocks to Buy


After a year of weak stock returns and strong cash flow generation, natural resource mining stocks have joined the high yielding asset class. In the old days, natural resource stocks didn’t focus on paying dividends. Now investors can find a solid selection of high yielding resource stocks that yield in excess of the 2% offered by the 10-year treasury.

The following high yielding stocks include two limited partnerships that more »


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




Friday, February 8, 2013

Any Hope Left for Investors in Mobile and Social Gaming?


While the public markets provide limited focused investment options in the hot mobile and social gaming sector, the stocks of Glu Mobile (NASDAQ: GLUU) and Zynga (NASDAQ: ZNGA) continue to struggle as the firms have lacked the ability to produce consistent game winners especially on mobile. Currently small, private companies have produced most of the huge mobile gaming franchises such as Angry Birds, Minecraft, and Temple Run.

Does recent failures more »


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




4 High Yielding Tech Stocks to Buy


After years of weak stock returns and strong cash flow generation, tech stocks have become the new high yielding asset class. In the old days, tech stocks didn’t even pay dividends, but now investors can find a solid selection of high yielding tech stocks. Even the great Apple now provides a dividend yield in excess of 2%.

The following high yielding tech stocks all provide yields in excess of more »


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



A 3D Printing IPO from the Past


The main 3D printing companies, 3D Systems and Stratasys, recently hit all-time highs so naturally this would be a great time for a related IPO. Industrial 3D printing firm ExOne (NASDAQ: XONE) plans to join the party this week. A major surprise popped up when reading the prospectus. The company harkens back to the technology IPOs of the late 1990s when a stock had as much hope as hype.

The more »


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



Tuesday, February 5, 2013

One REIT IPO Without Much of a Yield


Hardly a week goes by these days without a company going public with a decent yield. A couple of weeks ago CyrusOne (NASDAQ: CONE) joined the party with a highly successful IPO pricing above the expected range and trading higher for the week. The REIT though has a meager expected dividend yield of only 2.9%.

The company is a spin-off data center operator from majority owner Cincinnati Bell (NYSE: CBBmore »)


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



Monday, February 4, 2013

Top 10 Net Payout Yield Stocks For February 2013


This article is a continuation of a monthly series highlighting the top net payout yield stocks that was started in June, 2012 (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.
January Returns
Below are two charts highlighting the monthly returns of the top ten stocks from January (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, and WLP. Please review the disclaimer page for more details. 



Sunday, February 3, 2013

Facebook Remains A Short For 2 Prime Reasons



After the close on Wednesday, Facebook (FB) reported earnings for Q4 2012 that generally beat expectations of the market. Investors though need to be careful; the company is still focused on monthly active users (MAU) and not total usage. The real story isn't the monetization of active users, but rather the ability to keep those users active on the platform. The market isn't telling that story.
As discussed back after the Q3 report, the company faces two issues mostly ignored by the market: surging costs for the new products and a saturation of MAUs in the most valuable US market.

Read the full article at Seeking Alpha. 


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




Friday, February 1, 2013

2 Stocks to Buy on the Waning Dominance of Apple


The recent revelation that Apple (NASDAQ: AAPL) might no longer be the dominant mobile device developer might create an opportunity for other tech stocks. Between sucking up investment dollars and squeezing margins, the dominance by Apple in the mobile device sector hasn’t always been good for suppliers.

The developer of the iPhone and iPad still has a market cap of $430 billion even after a decline from nearly $700 more »


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