Out Fox The $treet

The recent IPO of flash-storage provider Violin Memory ( NYSE: VMEM     ) failed to impress the market due to several persistent issues including an auditors going concern doubt. The IPO process can be very volatile and investors need to look no further than the Facebook IPO to see how a disappointing market reaction can quickly turn around. The major problem with Violin Memory was the shocking level of losses. The company lost so much money over the last six months that it likely had to raise money. Another factor in the recent pricing weakness has been the horrible market trading of other flash-storage providers Fusion-io ( NYSE: FIO     ) and OCZ Technology ( NASDAQ: OCZ     ) . Does the recent weakness provide a buying opportunity for patient long-term investors? Read the full article here . Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

Small-Cap Insight Investors looking for a stock that provides large yields from owning venture capital firms should look know further than Hercules Technology Growth Capital ( HTGC ) . The company invests primarily in senior secured debt with floating interest rates of venture capital-backed companies in tech-related markets, including technology, biotechnology, life science, and cleantech industries at all stages of development. Investors typically see venture capital firms as raising equity so the concept of venture debt is unique in the public markets. With the need to raise more money as companies take longer to exit the venture path via an IPO, debt is used to lengthen the time before the next equity round and provides negotiating leverage for higher valuations. Even at average loan rates of over 14%, the venture firms can increase returns by avoiding a dilutive VC round as long as possible. Read the full article at Seeking Alpha. Disclosure: No positions ment...

This enterprise storage maker continues to struggle as major customers pulled back on short-term orders to end 2012. This caused the stock of Fusion-io ( FIO ) to crater back to all-time lows below $16. The company is a leader in delivering storage solutions that accelerate virtualization, databases, cloud computing, and big data. It is a play on the trend of storage conversion from hard disk drives to solid state drives (SSDs) or flash memory. SSDs have advantages that include immediate start-up, energy efficiency, faster, and no movable parts making them less breakable. The sector is one of the fastest growing around, but the leading public companies continue to struggle with all of the stocks trading near lows. Both OCZ Technology Group ( OCZ ) and STEC ( STEC ) have had issues either with past executives or financial reporting. Read the full article at Seeking Alpha. Disclosure: Long AAPL and short FB. Please review the disclaimer page for more details. ...

The drama for OCZ Technology Group Inc (OCZ) just won't end. The manufacturer of solid state drives has gone through a series of dramatic announcements in recent months from missing earnings due to a NAND shortfall, the retirement of the CFO, the resignation of the CEO, and now an earnings warning and reporting delay. Not to forget that the company hired a new CEO, existing board member Ralph Schmitt. After announcing materially lower revenue expectations, Ralph hosted a conference call that was short on details and long on questions. Due to the lack of firm details, the stock is currently untouchable by investors. Read the full article at Seeking Alpha. Disclosure: Long SVNT. Please review the disclaimer page for more details.

Even with the recent supply issues of competitor OCZ Technology (OCZ) , Fusion-io (FIO) remains a market leader so far unaffected by the supposed supply issues in the solid state drive (SSD) sector. The stock is generally considered expensive, but once compared to other tech stocks, the relative valuation in the sector and the stock appears clearer. The company is a leader in delivering storage solutions that accelerate virtualization, databases, cloud computing, and big data. The sector is one of the fastest growing around, with the two leading companies reporting revenue growth in the 80% range recently. But why are the companies trading at lower valuations than other hot tech stocks? Read the full article at Seeking Alpha. Disclosure: Long OCZ. Please review the disclaimer page for more details. 

As chronicled a few weeks back, OCZ Technology Group Inc (OCZ) is one of the most drama-ridden stocks in the market. The stock has been whipped around by numerous buyout rumors and a wild pattern of high growth followed by disappointing earnings. After the close on Wednesday, the company again reported disappointing preliminary revenue numbers, even as demand soars. That was the bad news and likely what the market will focus on, with the stock trading down 20% in the after-markets. The good news that the market will ignore is that the guidance miss is due to the lack of NAND supply from third party suppliers. Bookings again exceeded expectations and that should ultimately guide the stock price. The shortage of NAND appears related to Apple (AAPL) buying up all available supplies for either the iPad-Mini or the iPhone5. This caused suppliers to cut capacity for the 2xnm MLC NAND used in the Vertex and Agility line of products. Read the full article at Seeking Alpha. Disclosure: L...

This model lost a disappointing 6.6% in July versus a 1.3% gain for the benchmark S&P 500. This model typical outpaces the major indices by a large margin in up periods so the last month was a major exception. Since the end of 2011, this model has been running on the theme that the majority of stocks would retrace the losses experienced since the July 2011 levels. In essence, our theory all along has been any losses since that time period were from irrational fear of a second financial collapse that the Europeans were unlikely to allow. Naturally this fluctuates on a case by case basis where any individual stock could move a lot higher or lower depending on circumstances since then. Unfortunately this theory took a major hit as investors piled into dividend paying stocks sending most major indices back close to 2012 highs while at the same time selling the higher risk, global growth stocks. In some cases, stocks actually hit new 52 week lows recently. T...

Anybody following the stock or the solid-state drives (SSDs) industry has probably seen the drama with OCZ Technology (OCZ) over the last few weeks. Several influential journalists reported that a deal was done with Seagate Technology (STX) for over $1B, valuing the stock at close to $15. Unfortunately weeks have passed without a deal announcement and the stock that shot up to over $8 in after market trading on July 27th now trades under $5. On top of that news, the CFO announced his retirement last week adding more fuel to the speculation fire. Not to mention the annual shareholders meeting took place on Monday eliciting investor hopes of noteworthy news. At times like this, investors need to understand what they own with a clear defined plan for exciting the position. A smart investor either took advantage of the price spike or is now loading up shares as the rumors fade. Read the full article at Seeking Alpha. Dsiclosure: Long OCZ. Please review the disclaimer page for more de...

Anybody following OCZ Tech (OCZ) knows that rumors have been swirling that Seagate Tech (STX) has made a bid to buy the company for over $1B. Well the rumors suggested that the deal would be announced on Monday during the Q212 earnings report for Seagate. After the close on Monday, Seagate reported disappointing numbers that sent its stock down some 8%. Unfortunately though for OCZ shareholders no mention was made of the OCZ buyout. Not even a question from analysts regarding the rumors. Not to much of a surprise but the stock plummeted during the regular session and even further after hours. Closing at $5.36 most of the rumor gains were gone. Then the story gets strange. While the CEO was busy claiming no real need for buying technology, the CFO trots out late and tells Reuters the desire to purchase a SSD company. Within a span of hours, the company appears happy with the in-house program to suddenly needing external sources. Heck, even Piper Jaffray came out after the conf...

After it released its Q1 2013 earnings report on July 10th, OCZ Technology (OCZ) dropped over 20% in a matter of days. Importantly, though, the stock did not hit a new 52 week low below $4.14, suggesting that maybe the worst was finally over for long suffering shareholders. The leading provider of high-performance solid-state drives (SSDs) for computing devices and systems met on the revenue line and missed on the bottom line. So naturally the 20% selloff must've been justified with a earnings miss? Earnings Miss The company reported a $0.17 loss versus expectations of a $0.12 loss. The bigger than expected loss cemented all of the fears of the longs and encouraged the shorts to press further on the stock. Read the full article at Seeking Alpha. Disclsoure: Long OCZ. Please review the disclaimer page for more details. 

Or at least OCZ Technology (OCZ) dropped due to missing the headline numbers. The stock dropped 9% in the regular session and another 9% in after hours to trade below $5. The company reported Q113 numbers after the close that generally missed expectations. The guidance though was maintained. The provider of high-performance solid-state drives (SSDs) for computing devices and systems still reported 54% revenue growth even if it slightly missed expectations at $115M What the market has missed is that the company reported record bookings of $140M or some $26M above the reported revenues. The company typically has minimal bookings that push over to the next quarter. The main culprit this quarter being a power regulator shortage. Otherwise, revenue for Q113 would've been closer to $140M and earnings undoubtedly would've smashed estimates. On top of the parts issue, the company increased marketing expenses in order to capture the bookings revenue that ended up not shipping. S...

The more I review the numbers, the more the plan from OCZ Technology (OCZ) makes sense. The company reported Q4 2012 earnings last week that mostly disappointed investors as the stock plunged 14% the day after the report. While OCZ Technology dramatically upped guidance for the current fiscal year that started in March, the Street was very disappointed that the company decided to push development expenses forward into Q4 2012 and Q1 2013. So even though the company guided to upward of $700 million in revenue from estimates down in the low $500 million range, investors appear more concerned about short-term losses. What stunned investors was that research and development expenses jumped over 100% sequentially to $13 million, from $6.6 million in Q3 2011. Other operating expenses jumped as well, leading to a nearly 75% increase, or $14 million more. If the company had chosen to growth expenses at the same rate of revenue, it would have been very profitable. Read the full article at S...

Back in February, OCZ Technology (OCZ) did a secondary at $9 to raise $110M. The company had recently faced low cash balances so analysts and investors a like were concerned about the need to raise funds. The company was always clear about the need to raise major funds would only occur if it signed a major customer. Fast forward to the Q412 earnings report last night and the company guided to nearly $700M in revenue for fiscal 2013 compared to estimates around $513M. Based on that, one would think the stock has now soared way beyond the secondary price.  Well that person would be mistaken. The stock has now plunged 50% from the highs around $10 shortly after the secondary while all but confirming a deal with the much speculated Facebook (FB) .  The company clearly stated in the conference call that it had a deal with a leading social media company not to mention numerous other data center customers. No to mention that Yahoo (YHOO) had forecasted a 3x increase in ...

At one point today, OCZ Technology (OCZ) was down more than 5% to below $7 before a massive end of day rally. This stock has been a major conundrum since completing a secondary at $9 to raise over $100M. The stock even hit $10 around that time. Even worse is that the market has been consistently rising during that period. Management had previously hinted that if the company needed to raise cash it would be due to significant orders that required more cash for operations. Absent any big deal announcement since the secondary, it appears that investors have become disenchanted with this story. Analysts expect the company to have wrapped up nearly 100% revenue growth for FY'12 and follow that up with a 35% revenue growth for FY'13. The stock currently trades at a 13 forward PE though the 5 year growth rate is over 22%. That number even appears low considering the growth rate. On the technicals, the stock closed right around the 200ma. Being so oversold, the stock is due for ...

Today's news on the closing of the secondary and the exercise of over-allotments shouldn't be that big of a deal, but the stock is down 5.5% now. Hard to tell the reason for the selloff other than maybe the over-allotment was partially exercised. This is possibly seen as a negative in the market though I don't see this move as surprising. The secondary was for $9 and the stock is selling below those levels. Why take that deal when the open market is cheaper? OCZ Tech (OCZ) remains a leading provider of high-performance solid state drives (SSDs) for computing devices and systems that remains in very high demand. The company will presumably use these funds to land a very large customer though the company has yet to verify or deny. That might also be the cause of the selloff. Traders might be fleeing the stock considering the secondary has been closed and the speculated major deal has not been announced. Sure appears like a buy the dip scenario though our models are ...

This model gained a solid 21.4% in February versus 4.1% for the benchmark S&P 500. This model typical outpaces the major indices by a large margin in up periods and last month was no exception. Since the end of 2011, this model has been running on the theme that the majority of stocks would retrace the losses experienced since the July 2011 levels. In essence, our theory all along has been any losses since that time period were from irrational fear of a second financial collapse that the Europeans were unlikely to allow. Naturally this fluctuates on a case by case basis where any individual stock could move a lot higher or lower depending on circumstances since then. This conviction has allowed us to hold onto a highly leveraged portfolio and see significant gains this year as stocks like Apple (AAPL) , Dicks Sporting Goods (DKS) , Liz Claiborne (LIZ) , and Radware (RDWR) all reached those July levels by February. Other stocks like Manitowoc (MTW), Sears Hold...

After a bad 2011, this year got off to a fantastic start with the model seeing a 25% gain in January easily outperforming the 4.4% gain for the S&P500. The model spent most of the month accumulating cheap stocks in order to take advantage of the market rallying against the proverbial 'wall of worry'. January was an interesting month with stocks rising even in the face of what appeared like continued negative news out of Europe. With the continued focus on Greece, most investors stayed out of the stock market and missed that yields on Italian and Spanish bonds saw dramatic declines. The ability to isolate the problems to Greece and Portugal to a lessor extent were a big relief to a market pricing in a European blowup in December. In addition, the decline in emerging markets inflation was a big benefit to the under performing stock class in the new year. Specifically fast growing countries like China and India saw multi year lows in inflation rates allowing monetary polic...

Though Fusion-io (FIO) reported earnings that slightly beat estimates and revenue that handily beat estimates, the stock sold off 13% after hours. With 170% year-over-year revenue growth, the report made clear that the move to flash memory storage was gaining steam. Fusion-io provided revenue guidance for the next quarter that easily surpassed the Capital IQ analyst consensus, but that might also be weighing on the stock as investors tend to prefer more growth than basically flat sequential guidance. Read full article at Seeking Alpha. Disclosure: Long OCZ. Please review the disclaimer page for more details. 

After a strong 2009 and 2010, 2011 was a year to forget for this portfolio. The market hit highs around the end of April and this model was soaring to new heights at the time. Many of the holdings had valuations nowhere near the 2007/08 peaks or even close to what would normally be considered rich. Regardless, leverage was reduced since some gains were significant. Then, unfortunately most of the stocks collapsed and even in a few cases approached 2009 lows. With too much leverage left, the model was hit very hard. The good news is that valuations started the year as attractive as during the financial collapse of 2009. 2012 Outlook Portfolio Construction The portfolio remains overweight on the global growth theme. Most of the stocks in this sector trade as if emerging markets are headed towards a recession instead of continued growth. The biggest challenge to our investment strategy in 2011 was the major inflation fears in emerging markets like China, India, and Brazil. As 201...