ARM Holdings plc

The official logo for the ARM processor archit...

The official logo for the ARM processor architecture (Photo credit: Wikipedia)

ARMH : NASDAQ : US$47.24
ARM : LSE
BUY 
Target: US$56.00

COMPANY DESCRIPTION:
ARM is a leading semiconductor IP supplier to the diverse global semiconductor market. ARM’s revenues are driven through a licensing and royalty business model, with a majority of the royalty sales driven by the mobile market
including handsets, smartphones, and tablets. ARM also supplies semiconductor IP to the server, PC, and embedded markets and physical implementation libraries and IP to semiconductor foundries.
All amounts in US$ unless otherwise noted.

Investment recommendation:
From ARM’s analyst day yesterday in London where ARM management highlighted strong longterm market and royalty growth opportunities in both high- and low-tier smartphones.

We believe ARM is well positioned to benefit from quickly increasing emerging market feature phone to smartphone upgrades, ramping low-tier tablets, and high-tier smartphone platform refreshes that should drive royalty TAM growth and rate expansion. Further, with a growing number of ARM partners moving toward multi-core Cortex-A, big.LITTLE, and ARMv8 designs at leading edge process nodes, we anticipate strong license sales in the near to medium term will drive strong royalty revenue growth and both operating and earnings leverage long term. We reiterate our BUY rating and raise our price target to $56.
Investment highlights
 Our Q1/13 monthly handset sales surveys and recent March quarter results and June quarter guidance for ARM mobile chipset partners are consistent with ARM’s estimates for very strong growth of the low- and mid-tier smartphone markets and also resilient growth of the high-tier market driven flagship launches and 4G/LTE upgrades.
 At its analyst day, ARM shared its target of 15-25% smartphone royalty sales CAGR through 2017 and anticipates smartphone unit CAGR of 20% for the industry during the same period. In fact, this estimate includes growth in both the high- and lower-tier smartphone markets, and we believe ARM will generate significant royalty revenue growth from both tiers driven by a royalty rate expansion multiplier in the slower-growing high-tier market and upgrades
from lower royalty feature phones in lower tiers.
 Due to increased royalty estimates from lower tier smartphones and tablets, we are increasing our 2013 earnings/ADS estimate from $1.01 to $1.02 and our 2014 estimate from $1.31 to $1.35.

Valuation:

Our $56 price target (from $52) is based on shares trading at
roughly 42x our 2014 normalized earnings/ADS estimate.

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by jackbassteam on May 23, 2013  •  Permalink
Posted in Smartphones, Tablets, Tech stocks, Telecommunications
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http://amp2012.com/2013/05/23/arm-holdings-plc/

AcelRx Pharmaceuticals

Image representing AcelRx Pharmaceuticals as d...

Image via CrunchBase

ACRX : NASDAQ : US$6.40
BUY 
Target: US$11.00 

COMPANY DESCRIPTION:
AcelRx Pharmaceuticals is a specialty pharmaceutical company focused on the development and commercialization of innovative therapies for the treatment of acute and breakthrough pain. AcelRx’s lead product, ARX-01, is designed to provide patient-controlled analgesia (PCA) and overcome the issues currently
encountered with IV PCAs.
All amounts in US$ unless otherwise noted.

RAISE TARGET TO $11 ON POSITIVE
PHASE 3 DATA; REITERATE BUY
AcelRx reported  that it has achieved its primary endpoint (SPID-48) for its placebo-controlled Phase 3 study in major orthopedic surgery (knee or hip replacement) for its sublingual Sufentanil NanoTab PCA System.
This is the third (of a total of three) Phase 3 studies the company has completed, and NDA submission remains on track for Q3 2013. We continue to see an attractive market opportunity for ARX-01 in the hospital setting, with un-risk adjusted peak sales of $577 million in 2022.
Post positive data we have reviewed our model and are lowering our risk adjustment and WACC rate given the further de-risked outlook. We
reiterate our BUY rating and raise our price target to $11.
 EPS and ARX-01 NPV move higher on lower risk-adjustment. Our EPS (risk-adjusted) estimates move to ($0.68), ($0.62), $0.11, $0.77, and $1.18 on a 70% risk-adjustment (from 60%), which reflects a derisked outlook post data. Our ARX-01 NPV also moves higher on a lower WACC rate (20% from 26%), which delivers a ~$10.77 value.
Our underlying ARX-01 assumptions remain unchanged, which still drives peak sales of $577 million (un-risk adjusted) in 2022.
 Study achieves primary endpoint with mild to moderate adverse events. The study enrolled 426 adult patients at 34 US sites and showed a significantly greater SPID-48 versus placebo-treated patients (+76.1 vs -11.5, p<0.001) while also hitting secondary endpoints. Adverse events were mild to moderate and were similar in both placebo and treatment groups for majority of AEs.
 Reiterate BUY, raising target to $11. Our $11 target is based on both our ARX-01 NPV (un-risk adjusted) and a 17.0x P/E multiple applied to our risk-adjusted 2017 EPS discounted back.

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by jackbassteam on May 23, 2013  •  Permalink
Posted in Drug Stocks
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Posted by jackbassteam on May 23, 2013

http://amp2012.com/2013/05/23/acelrx-pharmaceuticals-2/

Conn’s, Inc.

English: The new Conn's logo

English: The new Conn’s logo (Photo credit: Wikipedia)

CONN : NASDAQ : US$47.37
BUY 
Target: US$63.00

Conn’s is a specialty retailer selling home appliances, consumer electronics, furniture and mattresses, home office, and lawn and garden  quipment. The company operates approximately 70 retail stores located primarily in Texas, as well as Louisiana, Oklahoma, Arizona, New Mexico and online. Conn’s provides its own proprietary inhouse credit program, including sales of related credit insurance products.

All amounts in US$ unles

Consumer & Retail — Specialty Retail
TOP-LINE GROWTH AND  EXPANDING RETAIL GROSS MARGINS REMAIN SIGNIFICANT ATALYSTS

Investment recommendation


We expect Conn’s to generate average annual revenue growth of 21% over the next five years supported by the company’s proprietary in-house financing program. We believe Conn’s square footage growth potential is the highest in the retail group, and increasing penetration of the higher-margin furniture and mattress business should continue to expand retail gross margin.
We are raising our FY14 retail gross margin forecast of by 120bps to 37.7% driven by our expectation for a faster mix shift to the furniture assortment. As a result, our FY14 EPS estimate moves $0.13 higher to $2.63, $0.14 above consensus and the highest estimate among sell-side analysts. We are raising our FY15 projection by $0.18 to $3.61, which is $0.43 ahead of consensus and the high estimate.

Investment highlights
 Store surveys indicate Conn’s is on track to grow square footage in line with our +31% FY14 estimate. Furniture penetration appears as high as 75% at new locations.
 We are raising our price target from $53 to $63 using an equal blend of the peer group multiple, our sum-of-the-parts valuation, and our DCF valuation model.

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by jackbassteam on May 22, 2013  •  Permalink
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Posted by jackbassteam on May 22, 2013

http://amp2012.com/2013/05/22/conns-inc/

Ecolab

ECL : NYSE : US$88.08
BUY 
Target: US$100.00

COMPANY DESCRIPTION:
Based in St. Paul, Minnesota, Ecolab is a leading international provider of advanced technologies and services helping to optimize the use of resources such as water, energy, food and the environment

PRICE TARGET TO $100
Investment recommendation

We find Ecolab very well positioned to benefit from the convergence ofpopulation growth, resource volatility and rapid industrialization across
the world. The company’s recurring services model drives high visibility (even in an uncertain macro environment), while the energy platform
looks positioned for strong earnings growth post Champion. Maintain BUY.
Investment highlights
 We recently attended the National Restaurant Association (NRA) show in Chicago, including an impressive booth tour with CEO Doug Baker and presentation from Global F&B President Jill Wyant.
 In short, from food and beverage “factories” all the way to the food court and fine dining, Ecolab offers a comprehensive portfolio of solutions to ensure food safety/regulatory compliance and optimize operational efficiency, among other benefits (environmental sustainability, etc.). Full details below.
 The commitment to innovation is clear (including recent product introductions and healthy pipeline), while the outlook for Nalco cross-selling stays encouraging (3D TRASAR for clean-in-place, etc.).
Valuation
Our 12 month target of $100 (from $93) equates to an EV/EBITDA multiple of ~11.8x from (~11.2x) our 2014 estimate.
Risks
Global macroeconomic conditions, seasonal sales patterns, commodity
costs, competition, regulatory dynamics and M&A integration

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by jackbassteam on May 22, 2013  •  Permalink
Posted in Food
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Posted by jackbassteam on May 22, 2013

http://amp2012.com/2013/05/22/ecolab/

21Vianet Group

VNET : NASDAQ : US$9.46
BUY 
Target: US$15.00

COMPANY DESCRIPTION:
The largest carrier-neutral Internet data center service provider in China, 21Vianet hosts customers’ servers and networking equipment and provide interconnectivity services. The company also provides managed network services through its data transmission network

Investment recommendation


We maintain our BUY rating and $15.00 price target following 21Vianet’s Q1/13 report that demonstrates its ability to sustain its growth
momentum and overcome some of the temporary disruptions from capacity upgrades. We believe that the incremental investments in new
data centers, network capacity and cloud computing, while temporarily dampening margins, will result in higher growth and profitability in 2H13
and beyond. Priced at 5.7x 2014E adj. EBITDA, the shares of VNET offers compelling risk/reward for investors, in our view.
Investment highlights
 Solid revenue, slightly soft margin on investments – Q1/13 revenue came in stronger than expected (RMB 435.7M vs. 433.3M CGe) with
slightly lighter-than-expected EBITDA (RMB 80.1M vs. 82M). We note that higher-than-expected operating costs were attributed to higher
bandwidth costs with greater network capacity and continued investments ahead of revenue contribution from cloud computing.
 Signs of hope from Q2/13 outlook – Although Q2/13 guidance is not as strong as we had hoped, it nonetheless confirms our view that the
disruption from recent capacity upgrade is now behind and that the company’s growth momentum is picking up again. Following two quarters of decelerating growth, we believe the change in trajectory  marks an important inflection point for investors.
 shift to higher MRR cabinets in large cities and revenue contribution from Microsoft cloud will likely improve both revenue and margins

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by jackbassteam on May 21, 2013  •  Permalink
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Posted by jackbassteam on May 21, 2013

http://amp2012.com/2013/05/21/21vianet-group-2/

Bombardier

English: Bombardier CSeries mockup Italiano: M...

English: Bombardier CSeries mockup Italiano: Modello dimostrativo del Bombardier CSeries (Photo credit: Wikipedia)

BBD.B : TSX : $4.64

Shares of Bombardier were higher after press reports indicated that EasyJet is on the verge of a large new order that may include BBD’s CSeries commercial jets. As reported by LesEchos, the British company, which reported a significant improvement in half-yearly results, is preparing a new giant order of more than 100 aircraft in the coming weeks, which would incorporate Airbus A320 or Boeing 737, as well as Bombardier CSeries. “Our future order will focus on Airbus or Boeing, but also on Bombardier,” said Carolyn McCall, Executive Director, at the presentation of the half-year results.

Recently, BBD reported its Q1/13 report where the company reiterated its 2013 and 2014 guidance.

Key points include: BBD expects 190 business jet deliveries, up from 179 in 2012, and 55 regional airliners, an increase from 50 units in 2012.
BBD’s Q1/13 business jet orders of only 27 units were on the low side.

Canaccord s Analyst David Tyerman think this is temporary. Management reiterated that it is cautiously optimistic about order prospects
given the company’s pipeline, especially in larger aircraft types. Regional airliner orders were very weak in Q1/13, with no regional jets ordered and only four turboprop orders secured. However, as with business jets, these orders are lumpy.

BBD continues to believe it has a good shot at larger U.S. airline orders as those airlines up-gauge smaller regional jets. In addition, the company is positioned to capture further orders from Garuda from option conversion and Russia, China and Africa hold some promise.

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by jackbassteam on May 21, 2013  •  Permalink
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Posted by jackbassteam on May 21, 2013

http://amp2012.com/2013/05/21/bombardier/

Jack in The Box

Jack in the Box

Jack in the Box (Photo credit: Wikipedia)

I’m All Right Jack ?

JACK : NASDAQ : US$36.82

Jack in the Box‘s second-quarter profit fell 39% as the restaurant operator posted weaker sales, and the year-earlier was boosted by a large gain on the sale of restaurants. For the quarter ended April 14, Jack in the Box reported a profit of $13.3 million, or 29 cents a share, down from $21.6 million, or 48 cents a share, a year earlier.

The latest period included a loss of three cents a share that was mainly attributable to refranchising, while the year-earlier period saw a 21 cents ashare gain from refranchising. Excluding such items and restructuring charges, operating earnings were 33 cents, up from 30 cents. Revenue declined 3% to $355.6 million. Analysts surveyed had projected a per-share profit of 31 cents and revenue of $359 million. Same-store sales rose 0.9% at Jack in the Box company restaurants and slipped 2% at Qdoba company restaurants.

The company in February anticipated same-store sales will be flat at Jack in the Box and flat to down 2% at Qdoba. Restaurant operating margin widened to 15.8% from 15.5%, as company restaurant costs decreased 5%.

For the year, Jack in  the Box lifted its operating earnings guidance for the year, now expecting $1.55-1.65 a share, compared to its earlier forecast of $1.48-1.63 a share.

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by jackbassteam on May 21, 2013  •  Permalink
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Posted by jackbassteam on May 21, 2013

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Airline Stocks Headed Higher

George Leong, B.Comm. for Profit Confidential

The improved global economy has helped to drive up the spending habits of consumers, and an area that has really benefited from the income creation is the travel sector.

Airlines around the world have reaped the benefits from the improved travel sector.

The airline sector is estimated to earn $10.4 billion in profits this year, up from the previous estimate of $8.4 billion, according to the International Air Transport Association (IATA). (Source: “Small Boost to Airline Profitability – Industry Profit Margin Improves to 1.6%,” International Air Transit Association web site, March 20, 2013.)

According to the IATA report, the top market in the airline sector is predicted to be the Asian-Pacific airlines, with estimates calling for $4.2 billion in net profits this year, up from $3.9 billion in 2012 and accounting for a 40.4% share of the total global airline sector.

The North American airline sector is also looking good, with profits estimated at $3.6 billion this year, well ahead of the $2.3 billion recorded in 2012.

Coming in third is expected to be the Middle Eastern airline sector, with $1.4 billion in profits, more than 50% higher than the $900 million in 2012.

The airline sector has been improving since the end of the recession. Lower fuel costs and increased bookings and travelling have helped to drive up the sector.

Take a look at the Dow Jones US Airlines Index  Notice the beautiful uptrend since November 2012 in correlation with the S&P 500 In the low-cost discount side, a carrier that I frequently fly with and like is JetBlue Airways Corporation (NASDAQ/JBLU). I have followed the stock for over a decade and continue to feel the company has what it takes to be a major player in the discount airline sector.

First formed in 1998, JetBlue Airways is a discount air carrier serving markets in the United States, Puerto Rico, and Mexico; along with 10 countries in the Caribbean and Latin America region. JetBlue offers services to 77 cities via 800 daily flights.

In April, the airline’s key revenue passenger miles reading came in at 11.5 million for an 83.8% load factor, up 6.8% year-over-year. (Source: JetBlue Airways Corporation, last accessed May 16, 2013.)

Following a decline in revenues from 2008 to 2009, JetBlue came back with growth in 2010 to 2012 and Thomson Financial estimates call for the growth to continue in 2013 and 2014.

For more of a global airline sector play, United Continental Holdings, Inc. (NYSE/UAL) is worth a look. The company formed from the merger of Continental Airlines and United Airlines in 2010.

United Continental offers around 5,446 flights daily to 370 airports on six continents.

Revenues are predicted to rise three percent to $38.3 billion this year, followed by $39.7 billion in 2014, up 3.9% year-over-year.

 

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by jackbassteam on May 20, 2013  •  Permalink
Posted in Aircraft, Economic Recovery, Energy
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Posted by jackbassteam on May 20, 2013

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Macau Is Hot For These Entertainment Stocks

Official Logo of Galaxy Macau

Official Logo of Galaxy Macau (Photo credit: Wikipedia)

By George Leong, B.Comm. for Profit Confidential

Gambling is akin to trading, but with much more risk of failure. Everyone knows Las Vegas as the gambling capital of the United States, but Macau is hot and growing. Macau is designated a special administrative region of China, which means the area has the backing of the Chinese government for the purpose of casino development.

Attracted by abundant wealth and the appetite for risk and money in China and Asia, there has been a rapid move by the major casinos to establish and expand their presence on the island of Macau, China, which is the world’s largest gambling market, known in the gambling world as the “Monte Carlo of the Orient.”

I have visited this former Portuguese colony, which is located some 38 miles from Hong Kong, and there is an obvious push to build more high-end casinos, especially those integrated with hotel, retail, and casino operations. The market is primarily the China and Asia tourist market.

Much of the newer major development is along the Cotai strip in Macau, which will add to the original gambling establishments in the city.

The Cotai strip area is bustling with people armed with money to spend, and if the expansion plans are on target, it will inevitably make Vegas seem sedate in comparison.

In March, gross revenues in the Macau casino sector came in around $3.9 billion, up 25.4% year-over-year. (Source: Garlitos, K., “SLM Holdings Continue to Hold Top Revenue Spot in Macau,” CalvinAyre.com, April 3, 2013, last accessed May 9, 2013.)

The prospects for Macau, China are enormous; I’m betting on that, and so are some of the world’s largest casino operators.

Two of the major players expanding their presence in Macau are Las Vegas Sands Corp. (NYSE/LVS) and China-based Galaxy Entertainment Group Limited (OTC/GXYEY).

In the first quarter, Las Vegas Sands attributed its strong growth in part to its expansion in Macau, where the company’s four Cotai strip properties attracted a record 14 million visitors. The company is a major player on the Cotai strip, which is attracting even more major players. The company’s subsidiary Sands China Ltd. reported a 39.3% year-over-year jump in net revenues to $2.0 billion in the first quarter, while earnings surged 63.3% year-over-year.

Speculating On Gambling    

But the company that I feel has excellent prospects is Galaxy Entertainment because of the fact that it’s an Asian-based company. The company is on an aggressive expansion path. Currently, it has two core properties—Galaxy Macau and StarWorld Hotel and Casino.

Galaxy Entertainment’s expansion plans are aggressive. The current development includes doubling the size of Galaxy Macau by the middle of 2015, and there are plans to launch Phase 3 and 4 at Galaxy Macau, to be completed between 2016 and 2018.

Two smaller casino players in the Macau China casino scene are Wynn Resorts, Limited (NASDAQ/WYNN) and MGM Resorts International (NYSE/MGM).

 

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by jackbassteam on May 17, 2013  •  Permalink
Posted in China, entertainment
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Posted by jackbassteam on May 17, 2013

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NIKE How Five Hundred Bucks and a Handshake Created a Colossal Stock Market Winner

Footballshoes of the mark Nike.

Footballshoes of the mark Nike. (Photo credit: Wikipedia)

By Mitchell Clark, B.Comm. for Profit Confidential

One company that always reports early is NIKE, Inc. (NYSE/NKE).

The company has doubled on the stock market since 2010, and it has more than tripled since 2006.

This kind of stock market performance really is amazing. In just three years, a $12.5-billion company has become a $25.0-billion company.From Oregon, Bill Bowerman and Phil Night created Blue Ribbon Sports with $500.00 each and a handshake. In January of 1964, Bowerman and Night ordered 300 pairs of Tiger brand shoes from Onitsuka Inc. of Kobe, Japan for distribution in the U.S. market. Night began selling the shoes out of his Plymouth “Reliant,” and Bowerman began tearing them apart.

Bowerman took an idea from his wife’s waffle iron and created a new running shoe.

Jeff Johnson (a friend and the company’s first employee) came up with the NIKE name in 1971. Shoes were successfully tested and Carolyn Davidson, a graphic design student at PortlandStateUniversity, created the “swoosh” logo. The company’s first shoes were sold at the U.S. Track & Field Trials held in Eugene, Oregon. The rest, as they say, is history.

As a stock market investment, NIKE has mostly been excellent. The position was flat between 1997 and 2004. The company signed Eldrick “Tiger” Woods in 1996. In its latest quarter (ended February 28), the company’s comparable sales grew nine percent to $6.2 billion, up solidly from $5.7 billion. Comparable earnings grew from $560 million to $866 million, for a gain of 55%, while earnings from continuing operations were $662 million, up 16% from $569 million.

Sales growth was strongest in North America (18%), followed by Central and Eastern Europe (16%), then Western Europe (8%). Western Europe’s growth is uncharacteristic compared to other earnings reports from many global brands. On February 1, 2013, NIKE sold its Cole Haan brand to Apax Partners for $570 million. The deal resulted in a gain on sale of $231 million. But on November 30, 2012, NIKE sold Umbro to Iconix Brand Group for $225 million. This resulted in a loss of $107 million, net of tax.

I consider NIKE to be fully valued on the stock market currently. With a price-to-earnings ratio of approximately 25, the company’s earnings growth combined with its dividend suggests it’s a little pricey.

NIKE is a shining example of how a business can still be very successful during tough times. Arguably, the position held up extremely well on the stock market through the financial crisis and the recession.

Wall Street estimates for the company have been going up for the next quarter, all of 2013, and all of 2014.

Realistically, I wouldn’t say the stock is a buy right now, simply because the stock market is at an all-time record high. It’s very difficult to consider new positions with the stock market sitting so high. I would say, however, that this company would be worthy of consideration for long-term investors if the stock were to experience a meaningful retrenchment. While a track record of success certainly cannot predict the future, NIKE’s demonstrated record of innovation and wealth creation still makes it a winner.

 

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by jackbassteam on May 17, 2013  •  Permalink
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Posted by jackbassteam on May 17, 2013

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