April 30, 2008

The Long Case for NCR

Seeking Alpha has an article on NCR Corp today. To summarize:

"All in all, expect EPS ~$1.5 in 2008, with EPS increasing to $1.8-2 in 2010, growth rebounding to healthy 7-8%. Assuming NCR, as the leader in its industry with attractive long-term growth prospects, should trade at 16-17x EPS multiple, slight premium to the market, the shares should go towards $30-35 range.

Current price level provides a decent entry point, but it's even better if you're able to accumulate on any pullbacks towards $20, potentially driven by overall market weakness or not-so-great short term company results."

April 29, 2008

Value in Chemed

Seeking Alpha has an article on Chemed, the parent company for Roto Rooter and VITAS Healthcare. To summarize, they believe the stock is oversold and gives the stock a 25% to 50% upside to a price targer around $50.

Pixelworks A Steal at Under $1

Zacks has a write-up on Pixelworks, a small cap company that makes LED components. From the article:

"Shares of Pixelworks are currently trading at a P/E of 3.3 on estimated earnings and a 0.29 multiple of price to our estimate of revenue for the next four quarters. We expect this to improve as new products are introduced and revenue growth accelerates. The P/E ratio is well below our esatimated growth rate of earnings of 12%."

Zacks has given a target price of $5.00

April 28, 2008

Heartland Payment Systems: Hidden Gem

Heartland Payment Systems is a MF Hidden Gem pick as disclosed in this article.

April 24, 2008

IPG Photonics: MF Rule Breaker

IPGP was first discovered in a Zacks article last May, about the same time the stock was selected as a MF Rule Breaker selection according to this article.

April 23, 2008

Discovering Apogee

Apogee Enterprises was featured in the Value Stock feature on Zacks today. The full article can be found here. To summarize:

"Apogee's 2009 P/E is only 10.70, well under the industry average of 17.15. Its price-to-book of 2.12 is also under the industry average of 2.31. Last year, the company repurchased 339,000 shares for a total of $5.4 million. APOG also pays a dividend of 1.50%."

Looking at Applied Signal

Applied Signal was first discovered here. From the article:

"That drop gave us the opportunity to buy what we think is a $16-$18 per share business," Cinnamond said, noting that, for about 80% of the company's sales, Applied Signal is the sole provider of that product.
Applied Signal could also be a buyout candidate, Cinnamond said.
"I think they are going to get snapped up," he said. "Their technology can be used in so many ways. They have stuff for the battlefield and stuff for the telecommunications market. They are not really correlated to defense spending."

April 22, 2008

Long Idea: Garmin

Garmin is near a 52 week low right now and they report earnings on April 3o. Seeking Alpha has an article on Garmin today, but it seems like it is tied to trading options on the stock.

April 21, 2008

Apollo Investment

Apollo Investment was discovered while reading the Fool here. It is a MF Hidden Gems Paydirt selection and an Income Investor pick. It seems to be a well-managed company that has fallen on hard times along with a lot of other financial stocks. This may probe to be a good entry point.

April 18, 2008

Salesforce: $83 Price Target

Zacks has an article on Salesforce.com where they give the stock a six month price target of $83. The link appears broken, so the entire text is below:

Salesforce.com, Inc. (CRM) is the market leader in the on-demand CRM space and continues to see substantial subscriber and customer growth. Although the stock has been volatile, we believe over the long-term, CRM will be the leader in a potentially huge market for on-demand software.

Moreover, the company has had excellent traction into larger customers with thousands of subscribers, reflecting greater acceptance, and should continue to displace Siebel/Oracle (ORCL). We therefore reiterate our Buy recommendation on CRM shares with a six-month price target of $83.00.

We believe a price-to-sales multiple is an appropriate valuation metric for CRM shares given the early stage of the company and its software-centric business. Traditionally, leading software providers trade in a range of 5x to 15x revenue.

On our FY 2009 revenue estimate of $1,033 million, or $8.68 per share, the stock is trading at a P/S multiple of 7.2x. Although the on-demand software model is inherently less profitable, CRM is beginning to show its operating leverage as revenue growth is rapidly outpacing cost of sales.

We believe the stock can approach a multiple of at least 9x revenue over the long-term as the leader in the space. We therefore maintain a Buy rating on the stock of Salesforce.com with a price target of $83.00, representing a P/S multiple of approximately 9.6x our 2009 revenue estimate, which we believe the stock can reach over the next six months.

April 16, 2008

Sigma Designs: Buy with $43 Target

Notable Calls has a piece on Sigma Designs saying the sell-off is unwarranted. From the article:

"Deutsche continues to like Sigma due to its leadership position in the IPTV and Blu-ray DVD markets. They believe SIGM will likely to outgrow all its peers this year and again likely next year.

Maintains Buy and $43 tgt on the stock."

April 15, 2008

Zacks: Hold PetMed Express

Zacks has an article today which states to hold PetMeds Express and gives the stock an $11.50 price target. From the article:

"In order for us to get more bullish on the stock, PetMed will need to drive sales growth while keeping its costs in check. As such, we think the stock is fairly valued and should trade in line with the overall market for the next six months."

This is quite a change from this analysis found at Zacks in January. To be fair, today's article seems to focus on the next six months, while the January article appears to give more of a long term analysis.

April 14, 2008

$13.75 Price Target on Emergent BioSolutions

Seeking Alpha has a good write-up on Emergent BioSolutions and give the stock a 12 month price target of $13.75. They weigh the risk with the reward and overall seem favorable on the stock. Disclosure: I own shares of Emergent BioSolutions.

Office Depot is Cheap

Office Depot was mentioned as being cheap in this MF article. It is currently trading near a 52 week low.

April 11, 2008

Montpelier Re in the News

Zacks has an article on Montpelier Re today, which they rate as a buy. No price target is given, but the article states that the company may incur higher up-front costs in order to invest in future growth. They site that the reinsurance market will expand and MRH should stand to profit as a leader in the market.

April 10, 2008

$19.50 Price Target on Dell

Zacks has an article on Dell, which they rate a "Hold" and give a six month price target of $19.50.

April 9, 2008

Great Analysis on American Eagle

Seeking Alpha has a great financial analysis on American Eagle Outfitters. They estimate the stock should be worth $35-40. The Fool has also been bullish on the company, and they note in their disclaimer that the MF as a company owns shares.

Looking at SoundBite Communications

Seeking Alpha has an article on SoundBite Communications and its cheap valuation. From the article:

"Using a modified DCF analysis, here’s what I get under 3 different scenarios:
  • Best Case Scenario: SoundBite’s shares are valued at anywhere from $15.81 - $18.33 per share ($17.07 median).
  • Middle Scenario: SoundBite’s shares are valued at anywhere from $9.63 - $10.84 per share ($10.23 median).
  • Worst-Case Scenario: SoundBite’s shares are valued at anywhere from $5.30 - $5.86 per share ($5.58 median).

Using the DCF metric, SoundBite’s share value is trading way below its intrinsic value of about $11.33 per share, and should be at least double where it stands today."

April 8, 2008

Biotech Ideas

Seeking Alpha did an interview with Zacks senior biotechnology industry analyst, where he discusses his favorite picks in the biotech industry right now. He favors Regeneron, ZymoGenetics Inc., Eurand N.V., Myriad Genetics and BioMarin Pharmaceuticals. The full article is here.

April 7, 2008

Virtualization: Cheap Growth?

I came across two articles on VmWare today. One is on the parent company EMC, who is $1 from its 52 week low and the other is on the growth prospects on virtual technology in general and VmWare in particular.

The long term prospects on both companies look very good, and this may be a great entrance point. However, in tough economic times, IT budgets get cut, which may pose challenges for both of these companies.

Tiny Cap Iteris

This pick is risky, but they appear to be the emerging leader in "traffic management." They were first discovered in this article at the Fool.

April 4, 2008

CryptoLogic Back in the News

The Fool has a new article on CryptoLogic today. This is a stock that I have had my eye on for a while. It is trading near its 52 week low and also pays out a dividend. It is still a MF Hidden Gems selection.

April 3, 2008

Price Target $15 on Website Pros

Zacks has an article on Website Pros giving it a price target of $15.

"The company has also been rapidly growing its private brand strategy. We therefore reiterate our Buy rating at a target price of $15.00, which represent a multiple of 24.2x our 2008 EPS estimate and 3.1x our 2008 revenue estimate."

April 2, 2008

$11 Price Target on SkyWorks

Zacks gives an $11 price target on Skyworks. From the article:

"We think the company's business model will demonstrate significant earnings leverage in 2008.

We have set a target price of $11, which implies a P/E multiple of approximately 16.7x based on our FY2008 EPS estimate of $0.66. We think our target P/E multiple is reasonable when compared to the median multiple of its peers."

April 1, 2008

Amgen Undervalued- $48 Price Target

Zacks has an article about Amgen's pipeline being undervalued. From the article:

"In our view, investors have over-reacted to the Aranesp news. Amgen is still an enormously profitable company generating significant cash flow over $2 billion in 2007. Our DCF analysis shows fair value in the $60s. However, noting that perception takes precedence over reality, the stock will probably not achieve full DCF value until after the ODAC meeting in March, and after we get another one or two quarters of ESA stabilization.

Finally, as pipeline product -- specifically Denosumab -- offer data, the market should begin to assign more value to the future. We see fair value at $48 or 11.5x our 2008 EPS of $4.22. We encourage long-term investors to purchase the shares at today's price. We view Amgen as a core holding within the sector."

Target $18 on Sara Lee

Zacks has given Sara Lee a $18 price target. The company is in the middle of a five year turn-around plan:

"Sara Lee Corporation (SLE) implemented the five-year Transformation Plan to create a focused consumer brand company generating sales growth in the range of 4% to 5% and earnings growth in the range of 5% to 8% by 2010. The Transformation Plan was announced over two-and-one-half years ago, and year-over-year EPS comparisons are now expected. The Plan was supposed to benefit Sara Lee in the long term, as over the first two years the project provided little earnings visibility.

However, the company in now in the third year of the plan, and the brand-building process is proving to be successful. The company is focused on the more attractive product lines and the operating margin is beginning to expand. Quarterly earnings comparisons in fiscal 2008 are expected to be positive. Hence, the Buy recommendation is maintained. Sara Lee stock traded in a P/E multiple range of 11 to 18 during the five years prior to the current restructuring program.

The current trailing 12-month P/E of 17.7 is at the top end of the range due to the decline in earnings during the initial phase of Sara Lee's Transformation Plan. For food companies experiencing restructuring changes, the Price-to-Sales (P/S) metric is appropriate. During the five years prior to the announcement of the Transformation Plan, Sara Lee stock traded in a P/S multiple range of 0.69 to 1.06. The stock is currently selling at a P/S multiple of 0.78 times trailing 12-month sales. The target price of $18 is based on a 1 P/S valuation on trailing 12-month sales."