Trading Alert : Convalo – Making money from addicts



Above Average
As of 20 May 2015 at 10:31 AM EDT.

Convalo Health International (Convalo) Announces Plan to Acquire Two Southern California Treatment Companies


LOS ANGELES, CALIFORNIA–(Marketwired – May 20, 2015) –




Convalo Health International, Corp. (Convalo) (TSX VENTURE:CXV), an acquisition-oriented company focused on rolling up the US addiction rehabilitation market, announced that it has come to terms to acquire two profitable southern California companies, Hollywood Detox Center and Accredited Rehab and Treatment Services (“ARTS”).  As part of the acquisitions, Convalo will retain the three top executives in key positions at the national level, strengthening Convalo’s existing management team in the area of operations, admissions and executive management.  As part of the acquisition, these executives would take over operational management of the current BLVD Treatment Centers portfolio of outpatient centers.


The acquisitions, expected to close very shortly pending a final purchase agreement, provide a fully vertically integrated platform in Hollywood and, within the next year, serve as a platform for the greater Los Angeles metropolitan area, offering detox services, men’s and women’s residential treatment services and aftercare services in West Los Angeles subsequent to Convalo’s acquisition last month of the outpatient center announced March 30th, 2015.


For the Hollywood area, the acquisition will immediately give Convalo the ability to provide services that fully encompass the entirety of the patients’ needs throughout the course of recovery, resulting in improvements to overall quality of care, a higher revenue per patient, and a more fluid patient experience at every level.


The accretive acquisitions will have an immediate and positive impact on earnings per share (EPS). The final terms of the acquisitions will be announced upon the execution of the final purchase agreements. The sellers will take both stock and cash as consideration.


“With this deal, we have a full service platform in Los Angeles,” said Michael Dalsin, Chairman of Convalo. “We wanted to announce this deal pre-closing to ensure that the respective staff members at BLVD Centers, ARTS and Hollywood Detox could openly work together to integrate and begin cross selling all services to clients. We plan to announce full financial details of the acquisition at closing, both in terms of expected positive impact on our annual revenues and profits, as well as the amount of cash and restricted stock paid to the sellers.”

“We are particularly excited to be retaining Keith Fowler and Brent Ortner from Hollywood Detox and Ryan Newport from ARTS as senior executives of our nationwide strategy and I welcome them as future shareholders and partners in our acquisition model. We expect to have a substantial amount of cash after we close this deal and are focusing on deals in New York, San Francisco, Miami and Chicago to create a nationwide network of addiction treatment centers offering the full range of addiction services from detox all the way to aftercare.”

Subsequent to listing, the Convalo Board of Directors approved the issuance of performance stock compensation in the form of options to several key personnel. Convalo issued (a) 3,000,000 options each to Michael Dalsin and Roger Greene as Chairman and CEO and Vice Chairman, respectively; (b) 500,000 options to Nitin Kaushal as non-executive Director; (c) 250,000 options to David Costine as non-executive Director; and (d) 100,000 options to Dennis Wilson as VP of Corporate Affairs. All options vest equally over three years at a market strike price of $0.55.

Convalo currently has 198,996,353 issued and outstanding common shares and 2,344,635 performance stock options available and yet-to-be assigned.

Convalo anticipates that the expiry date of the warrants outstanding exercisable for 43,125,000 common shares of Convalo at $0.50 per share, will be accelerated to November 11, 2015 pursuant to the terms of the Warrant Certificates. The acceleration is a result of Convalo’s share price achieving a volume-weighted average trading price greater than $0.60 for 20 consecutive trading days since closing. The warrants were originally issued pursuant to Convalo’s bought deal private placement of 43,125,000 units (each unit consisting of one common share and one warrant), for gross proceeds of $17,250,000, which closed on April 22, 2015.

About Convalo


Convalo is an acquisition-oriented company focused on rolling up the US outpatient addiction rehabilitation market led by seasoned management with experience in both US healthcare acquisitions and healthcare service asset management. In May 2014, Convalo made its first acquisition of a small, local addiction rehabilitation center in Los Angeles. Since May, the business has operated under the brand name BLVD Centers ( in a luxury Hollywood, California location. BLVD offers patients access to a wide range of services, including addictive and co-occurring disorders, helpful to the recovery process. In conjunction with the 12-Step approach, BLVD also offers supplemental insurance-reimbursed services catering to a variety of communities: gender specific, creatively- oriented, meditation/mindfulness, trauma and LGBT affirmative.


Stock Market Top ? : The Q Ratio Indicator Says Watch Out Below


If you sold every share of every company in the U.S. and used the money to buy up all the factories, machines and inventory, you’d have some cash left over. That, in a nutshell, is the math behind a bear case on equities that says prices have outrun reality.

The concept is embodied in a measure known as the Q ratio developed by James Tobin, a Nobel Prize-winning economist at Yale University who died in 2002. According to Tobin’s Q, equities in the U.S. are valued about 10 percent above the cost of replacing their underlying assets — higher than any time other than the Internet bubble and the 1929 peak.

Valuation tools are being dusted off around Wall Street as investors assess the staying power of the bull market that is now the second longest in 60 years. To Andrew Smithers, the 77-year-old former head of SG Warburg’s investment arm, the Q ratio is an indicator whose time has come because it illuminates distortions caused by quantitative easing.

“QE is a very dangerous policy, in my view, because it has pushed asset prices up and high asset prices, we know from history, are very dangerous,” Smithers, founder of Smithers & Co. in London, said in a phone interview. “It is very strongly indicated by reliable measures that we’re looking at a stock market which is something like 80 percent over-priced.”

Dissenting Views

Acceptance of Tobin’s theory is at best uneven, with investors such as Laszlo Birinyi saying the ratio is useless as a signal because it would have kept you out of a bull market that has added $17 trillion to share values. Others see its meaning debased in an economy whose reliance on manufacturing is nothing like it used to be.

Futures on the S&P 500 expiring next month slipped 0.1 percent at 9:36 a.m. in London.

To Smithers, the ratio’s doubling since 2009 to 1.10 is a symptom of companies diverting money from their businesses to the stock market, choosing buybacks over capital spending. Six years of zero-percent interest rates have similarly driven investors into riskier things like equities, elevating the paper value of assets over their tangible worth, he said.

Standard & Poor’s 500 Index members last year spent about 95 percent of their profits on buybacks and dividends, with stock repurchases exceeding $2 trillion since 2009, data compiled by S&P Dow Jones Indices show.

In the first four months of this year, almost $400 billion of buybacks were announced, with February, March and April ranking as three of the four busiest months ever, according to data compiled by Birinyi Associates Inc.

Slow Spending

Spending by companies on plants and equipment is lagging behind. While capital investment also rose to a record in 2014, its growth was 11 percent over the last two years, versus 45 percent in buybacks, data compiled by Barclays Plc show.

With equity prices surging and investment growth failing to keep pace, the Q ratio has risen to 58 percent above its average of 0.70 since 1900, according to data compiled by Birinyi and the Federal Reserve on market and asset values for non-financial companies. Readings above 1 are considered by some to be too high and the ratio has exceeded that threshold only 12 percent of the time, mostly between 1995 to 2001.

That’s nothing to be alarmed about because the American economy has become more oriented around services than manufacturing, according to George Pearkes, an analyst at Harrison, New York-based Bespoke Investment Group LLC. Nowadays, companies like Apple Inc. and Facebook Inc. dominate growth, while decades ago, it was railroads and steelmakers, which rely heavily on capital.

Mean Reversion

“Does that necessarily mean that the Q ratio should be as high as it is right now? I don’t know,” Pearkes said by phone. “With those sorts of long-term indicators, they can sometimes mean that the market is overvalued. But the reversion to the mean on them is usually going to take a lot longer than most people’s time frame.”

Any investors who based their investment decisions on the Q ratio would have missed most of the rally since 2009, according to Jeffrey Yale Rubin, director of research at Birinyi’s firm. The measure rose above its historic mean three months into this bull market and since then, the S&P 500 has climbed 131 percent.

“The issue we have with Tobin Q is that it does a very poor job at timing the market,” Rubin said from Westport, Connecticut. “The followers of Tobin Q never told us to buy in 2009, yet now we are warned that we should sell. Our response is sell what? We were never told to buy.”

Bond Yields

Everyone from Janet Yellen to Warren Buffett has spoken cautiously on stock valuations in the past month. Both the Fed chair and chief executive officer of Berkshire Hathaway Inc. said prices are at risk of getting stretched should bond yields increase. The rate on 10-year Treasuries slipped last week to 2.14 percent while the S&P 500 gained 0.3 percent.

“It’s probably a sensible configuration for the stock market to be overvalued because competing investments are so poor,” Robert Brusca, president of Fact & Opinion Economics in New York, said by phone. “As an investor, you’re not just looking at the value of the firm, but the value of the firm relative to other things you can do with your money.”

At 2,260 days, the bull market that began in March 2009 this month exceeded the 1974-1980 rally as the second longest since 1956. While measures such as price-to-earnings ratios are holding just above historical averages, the bull market’s duration is sowing anxiety among professionals who watched the previous two end in catastrophe.

“We’re still close enough to that prior experience and that hold-over effect is still there,” Chris Bouffard, chief investment officer who oversees more than $10 billion at Mutual Fund Store in Overland Park, Kansas, said by phone. “When you start to see prior cycle peaks on the chart like Tobin Q and any other valuation metrics that people are putting up there, it looks dramatic, stark and scary.”

Protect your Portfolio :

Patient Home Monitoring Announces Another Record Quarter of Revenue and Profit,

Our Top Spec Pick

		LOS ANGELES, CALIFORNIA--(Marketwired - April 28, 2015) - Patient Home Monitoring (PHM) (TSX VENTURE:PHM), a profitable company focused on rolling-up annuity-based healthcare service companies in the US and Canada, today provided highlights of its financial results for the second quarter of fiscal 2015.

FYQ2 2015 Highlights

Increased Revenue

--  Revenue for the quarter rose to $13,036,000 million, a 28% increase from
    the previous quarter and a 255% increase year over year.
--  Revenues included only 2 months of Black Bear Medical and only 1 month
    of West Home Health.
--  March Revenue exceeded $5,179,000 or $62,148,000 annualized run rate

Organic Growth Summary

To date, PHM has acquired 5 companies with reported trailing 12-month revenues totaling$40,500,000.

Post acquisition revenues have risen by $21,648,000 in annualized revenues.

Improved Profitability

--  Net income (footnote before stock-based comp) rose to $1,618,543, a
    23.5% increase from the previous quarter. (2)
--  Adjusted earnings before interest, taxes, depreciation and amortization
    (EBITDA) including transactional and nonrecurring cost rose to
    $2,858,079, a 20.3% increase from the previous quarter. (3)
--  Earnings per share (EPS) rose 71% from the previous quarter. (1)

Mergers & Acquisitions

--  PHM finalized 2 acquisitions this quarter: Black Bear Medical of Maine
    and New Hampshire and West Home Health of Virginia.
--  PHM has executed 2 LOIs this quarter: a $16.5 million revenue company in
    Colorado and a $20 million revenue company in Tennessee.
--  PHM is in term sheet negotiations with 8 companies, ranging from $3
    million in revenues to over $30 million in revenues.
--  PHM has increased investment in the M&A team to increase the quantity
    and quality of potential acquisition targets.

“This is our 8th consecutive quarter of record revenues and profits,” reported Michael Dalsin, Chairman of PHM. “Our March revenues of $5,179,000, which translates to annualized revenues of $62,148,000, were higher than expected. Our executive team continues to execute well on integration and cross selling, which is reflected in our financial results.”

“Our acquisition and organic growth model is working well in this fast growing market. Our business plan has been proven effective and there have been no recent regulatory changes to prevent us from continuing it” said Mr. Dalsin. “We had a productive quarter in terms of signing LOIs and when closed, we will exceed $100 million in annualized revenues. We are also working toward finalizing the LOI with a $40 million annual revenue business very soon.”

Full financial results are available on

PHM is rolling-up a large and fragmented market of small, profitable businesses providing healthcare products and services to chronically ill patients. The companies are acquired for their technical and market expertise in certain product and service lines, as well as their patient databases. Once acquired, PHM works to offer these newly acquired services to its entire patient base, thereby increasing revenue per patient and achieving organic post acquisition revenue growth and profits.

PHM will host an interactive Q&A earnings call at 4p.m. EST on Wednesday, April 29, 2015 to provide in depth data and analysis about the quarterly results.

Participants from PHM will be Michael Dalsin (Chairman), Roger Greene (Vice Chairman), David Hayes (CEO) and Andrew Folmer (CFO).

The details of the call will be released shortly.

Financial professionals are invited to call in and ask questions. To pre-register as a qualified caller, please e-mail by 5 p.m. EST Tuesday, April 28th, 2015.

About PHM

PHM is an acquisition-oriented, fast-growing and profitable company servicing patients with heart disease and other chronic health conditions. PHM is focused on acquiring companies in a highly fragmented and developing market of small privately-held companies servicing chronically ill patients with multiple disease states caused mainly by age and obesity. Because of the new and highly fragmented nature of the market, PHM is actively identifying and evaluating profitable, annuity-based companies to acquire at favorable prices for their patient databases and technical expertise. PHM’s post-acquisition organic growth strategy is to increase annual revenue per patient by offering multiple services to the same patient, consolidating the patient’s services and making life easier for the patient. The expected result is growing EPS with each acquisition and growing revenue and profits from the cross selling efforts.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

(1) EPS and Net Profit does not include IFRS Fair Value of options, warrants expense and stock based compensation. EPS growth was calculated using the following information:

Shares Outstanding Q2 2015            Shares Outstanding Q2 2014
203,084,354                           128,752,044

Net Profit                            Net Profit

EPS                                   EPS

(2) Net Profit does not include Stock Based Compensation or change in the IFRS Fair Value of options and warrants expense.

(3) Adjusted EBITDA is defined as EBITDA plus Stock Based Compensation.

Forward-Looking Statements

Information in this news release that is not current or historical factual information may constitute forward-looking information within the meaning of securities laws. Implicit in this information, particularly in respect of the future outlook of PHM and anticipated events or results, are assumptions based on beliefs of PHM’s senior management as well as information currently available to it. While these assumptions were considered reasonable by PHM at the time of preparation, they may prove to be incorrect. Readers are cautioned that actual results are subject to a number of risks and uncertainties, including the availability of funds and resources to pursue operations, decline of reimbursement rates, dependence on few payors, possible new drug discoveries, a novel business model, dependence on key suppliers, granting of permits and licenses in a highly regulated business, competition, difficulty integrating newly acquired businesses, low profit market segments as well as general economic, market and business conditions, and could differ materially from what is currently expected. This press release refers non-GAAP and non-IFRS financial measures that do not have standardized meaning prescribed by GAAP or IFRS. PHM’s presentation of these financial measures may not be comparable to similarly titled measures used by other companies. These financial measures are intended to provide additional information to investors concerning PHM’s performance.

Patient Home Monitoring Corp.
		Dennis Wilson
Corporate Affairs

Source: Patient Home Monitoring Corp.

Trading Alert: PHM Moving – Another 52 Week High After Financing


Vector cartoon of business man reading newspaper with stock market rising - Stock Illustration: 26398687


Out top spec pick moved lower when a $58 million dollar bought deal ( at $1.50 this week) was announced. Investors digested that news and conluded that the money would propel the M&A strategy more than issuing stock to the target companies .The price jumped back from a decline to $1.60


We are now up 50 % from our initial buy-in and the NASDAQ listing it wants needs a $2.00 U.S. handle.


Above Average
As of 16 Apr 2015 at 11:22 AM EDT.



Open 1.79 P/E Ratio (TTM)
Last Bid/Size 1.79 / 2156 EPS (TTM) -0.03
Last Ask/Size 1.80 / 282 Next Earnings
Previous Close 1.74 Beta -0.21
Volume 2,930,211 Last Dividend
Average Volume 4,982,340 Dividend Yield
Day High 1.83 Ex-Dividend Date
Day Low 1.76 Shares Outstanding 231.8M
52 Week High 1.83 # of Floating Shares 210.4501M
52 Week Low 0.2200 Short Interest as % of Float
DRIP Eligible No



Patient Home Monitoring Corp. is a healthcare company. The Company is engaged in providing in-home monitoring equipment, supplies and services to patients in the United States. The Company’s 100% equity subsidiaries include PHM DME Healthcare, Inc, Stancap Holdings I Limited, Patient Home Monitoring, Inc., PHM Health Management, Inc., Healthcare Logistics Corporation, Hollywood Healthcare Corporation, Resource Medical Group, LLC


Trading Alert : Penn West Defies Jim Cramer

Please review yesterdays negative analysis from Jim Cramer ( The Street) .

Our position at $2.40 that day seems to have caught the updraft from institutions bottom fishing the stock.

The large position of short sellers meand more volume to the upside.


Above Average
As of 07 Apr 2015 at 11:14 AM EDT.



Open 2.43 P/E Ratio (TTM)
Last Bid/Size 2.56 / 46 EPS (TTM) -3.49
Last Ask/Size 2.57 / 527 Next Earnings 29 Apr 2015
Previous Close 2.45 Beta 2.10
Volume 864,948 Quarterly Dividend 0.0100
Average Volume 2,253,300 Dividend Yield 1.56%
Day High 2.56 Ex-Dividend Date 27 Mar 2015
Day Low 2.33 Shares Outstanding 502.2M
52 Week High 11.00 # of Floating Shares 499.8043M
52 Week Low 1.67

PHM – Our Top 2015 Spec Play : Update / Trading Alert

PHM Announces Execution of Letter of Intent (LOI) to Acquire Another Large Regional Business in Tennessee With $20 Million in Revenue and $4 Million in Adjusted EBITDA



Above Average
As of 16 Mar 2015 at 10:51 AM EDT.

Management to Hold a Conference Call on Wednesday, March 18th to Review Acquisition Pipeline


Jack A. Bass Managed Accounts average  $1.11


LOS ANGELES, CALIFORNIA–(Marketwired – March 16, 2015) –



Patient Home Monitoring (PHM) (TSX VENTURE:PHM), a profitable company with annualized revenues exceeding $55 million focused on rolling-up annuity-based healthcare service companies in the U.S. and Canada, announced it has executed a non-binding Letter of Intent (LOI) to acquire a company in Tennessee with unaudited approximate annualized revenues of $20,000,000 and Adjusted EBITDA of $4,000,000(1).

PHM’s Chairman and executive team will hold a conference call scheduled for 1 pm EST, Wednesday, March 18, 2015.

PHM also provided updated details on the cancellation of the small $2.25 million annual revenue Georgia business LOI.


The Tennessee Letter of Intent (LOI)

The Tennessee business is a large, regionally-focused company offering home-based medical equipment and services for patients with chronic pulmonary conditions. The business services over 40,000 active patients. After close, PHM plans to start immediately offering cardiology and mobility services to these patients with an eye toward increasing organic revenues and profits of the business.

According to the LOI, PHM will acquire 100% of the outstanding shares of the business for cash for a total consideration of $14,348,000. PHM has sufficient cash on the balance sheet to complete the acquisition. Closing the acquisition will be subject to final due diligence and a binding purchase agreement.


The Georgia LOI Cancelled

PHM was unable to reach an agreement on the final terms of the purchase agreement with the Georgia Company, particularly with respect to issues of indemnification.


Summary of Active LOIs

The table below summarizes the current status of PHM and the status of PHM after all LOIs are closed, Further, it summarizes the breakdown of the revenues and Adjusted EBITDA for each acquisition and the cash needed to close the acquisition. PHM plans to use $26,798,000 to close the acquisitions announced. PHM is expected to have over $10,000,000 in cash after all LOIs have closed, with revenues of $96,500,000(2) and Adjusted EBITDA of $19,450,000(2).


Annualized Revenue Annualized Adjusted EBITDA Cash Balance
PHM Today $ 55,000,000 $ 10,500,000 $ 37,000,000
PHM Post-LOIs closed $ 96,500,000 $ 19,450,000 $ 10,202,000
Summary of LOIs Cash To Close
Colorado $ 16,500,000 $ 4,000,000 $ 11,000,000
Oklahoma & Texas $ 5,000,000 $ 950,000 $ 1,450,000
Tennessee $ 20,000,000 $ 4,000,000 $ 14,348,000
Totals $ 41,500,000 $ 8,950,000 $ 26,798,000

“The Tennessee deal is another large acquisition for PHM and, when closed, we will likely have reached our 2015 goal of achieving $100 million in annual revenue earlier than planned,” said Michael Dalsin, Chairman of PHM. “Along with the acquisition, we plan to draw down on a line of credit to ensure we have plenty of cash for further acquisitions.

“In the coming quarters, we are poised to complete the several acquisitions announced this year, almost doubling our revenue, significantly increasing EBITDA, and perhaps most importantly, adding over 90,000 patients to our database,” continued Mr. Dalsin. “After we close all executed LOIs, I expect we will have a cash balance of over $10 million and we will be generating Adjusted EBITDA of close to $20 million per year(1). I expect these numbers will increase once we see the results of cross selling such a large patient database.”

“Considering the small size of the business in Georgia and the potential of significant trailing liabilities,’ concluded Mr. Dalsin. “We have decided that the risk-reward ratio was not in our favor.”


Conference Call March 18, 2015 to Review Acquisition Pipeline

PHM will host an interactive Q&A conference call at 1p.m. EST on Wednesday, March 18, 2015.

Participants from PHM will be Michael Dalsin (Chairman), Roger Greene (Vice Chairman), David Hayes (CEO) and Edward Brann (M&A Banker).

The details of the call are:


Wednesday, March 18, 2015 at 1p.m. EST

US & Canada Toll Free:

Dial In: (855) 886-8711

Meeting ID Number: 548 01 39

Financial professionals are invited to call in and ask questions. To pre-register as a qualified caller, please e-mail by 5 p.m. EST Tuesday, March 17th, 2015.


About PHM

The explosive growth in the number of elderly patients in the US healthcare market is creating pressure to provide more efficient delivery systems. Healthcare providers, such as hospitals, physicians and pharmacies, are seeking partners that can offer a range of products and services that improve outcomes, reduce hospital readmissions, and help control costs. PHM fills this need by delivering a growing number of specialized products and services to achieve these goals. PHM is a positive cash flow and profitable company that serves patients with heart disease and other chronic health conditions, this operation is a platform for acquisitions and organic growth. PHM is focused on a highly fragmented and developing market of small privately-held companies servicing chronically ill patients with multiple disease states caused mainly by age and obesity. Because of the new and highly fragmented nature of the market, PHM is actively working to identify and evaluate profitable, annuity-based companies to acquire their patient databases and technical expertise at favorable prices. PHM’s post acquisition organic growth strategy is to increase annual revenue per patient by offering multiple services to the same patient, consolidating the patient’s services and making life easier for the patient. The expected result is growing EPS with each acquisition and growing revenue and profits from the cross selling efforts.


Trading Alert PHM.V

Patient Home Monitoring

Volume and Price Moving

Rapidly growing by mergers and acquisition team


Above Average
As of 23 F


Patient Home Monitoring Corp. (PHM), formerly International Health Partners, Inc., is a Canada-based company which provides in-home disease management services for patients in the United States cardiology market. The initial focus is on providing in-home monitoring equipment, supplies and services to patients in the United States who take prescription blood thinners, such as Coumadin (Warfarin). In June 2014, it acquired Care Medical Partners, LLC…

Trading Alert BBRY Blackberry Moving Past Resistance

Please refer to our article of July 8th
Blackberry – BBRY Fever $30 Target ?

published July 8,2014

BlackBerry: Never Mind The Bears, I Won’t Sell Below $30…fer to our earlier article


Jack A. Bass Managed Accounts re-entered at $10.02

As of 09 Jul 2014 at 11:56 AM EDT.


Open 11.02 P/E Ratio (TTM) —
Last Bid/Size 11.31 / 89 EPS (TTM) -11.39
Last Ask/Size 11.32 / 115

Next Earnings 26 Sep 2014
Previous Close 10.94 Beta 1.17
Volume 11,691,432 Last Dividend —
Average Volume 20,370,276 Dividend Yield 0.00%
Day High 11.32 Ex-Dividend Date —
Day Low 11.00 Shares Outstanding 526.9M
52 Week High 12.18 # of Floating Shares 500.0557M
52 Week Low 5.44 Short Interest as % of Float 19.19%
1 Day|5 Da

Is Blackberry Getting It’s Grove Back ?

Stock Upgrades Readers will recall we were in then out of the stock at the $15 level. Now we are back in at $10.02 – this morning. Jack A. Bass Managed Accounts will note the change in your month end statements.

Long/short equity, long only, short only, growth
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  • BlackBerry’s Q1 results were decent.
  • The turnaround continues on.
  • Balance sheet still in fair shape.
  • Now, it’s time for the next stage.

A couple of weeks ago, I detailed how it was time for the turnaround at BlackBerry (BBRY) to gain some traction. The year over year revenue losses were expected to be large at the upcoming earnings report, but operating expenses were also expected to be reduced. Last week, the company reported a decent quarter. The good news sent shares of BlackBerry spiking, and on Monday, they cracked $10 for the first time since March 10th. Today, I’ll cover the latest BlackBerry quarter, and then detail how the next stage of the turnaround is starting.

Q1 results:

Last week, the company released its fiscal Q1 results for the May ending quarter. Remember, BlackBerry uses a fiscal year that ends in February, and we are currently in fiscal 2015. On the top line, the company reported revenues of $966 million, which beat analyst estimates by about $3 million.

On the bottom line, results get a bit complex. The company reported a GAAP profit of $0.04 per share. This includes two adjustments, one regarding the company’s debentures, and the other regarding the ongoing restructuring plan CORE. Please see the above press release for all of the details. When you look at the adjusted EPS number, the company lost $0.11 per share. Analysts were looking for an adjusted loss of $0.26 per share, so BlackBerry did beat estimates on both the top and bottom line.

Progression of the turnaround:

As part of the turnaround, BlackBerry is becoming less of a hardware company and more of a service one. In the chart below, you can see how this quarter’s segment revenue percentages compared to those of the prior year period. This is a big change.

The other major part of this turnaround was the cutting of expenses. BlackBerry’s GAAP cost of sales was just $515 million in the Q1 period, compared to about $2.03 billion in the year ago period. On a GAAP gross margin front, the company reported gross margins of 46.7%, up from 33.9% in the year ago period. GAAP gross margins were down sequentially from 56.7%. The company reported adjusted gross margins of 48%, up sequentially from 43%.

The company also is working on reducing its GAAP operating expenses, as detailed below:

  • R&D expenses were $237 million in the quarter, compared to $246 million in Q4 2014 and $358 million in Q1 2014.
  • Selling and marketing costs were $400 million in the quarter, compared to $355 million in Q4 2014 and $673 million in Q1 2014.
  • Amortization expenses totaled $81 million in the period, compared to $107 million in Q4 2014 and $180 million in Q1 2014.

The company reported a GAAP operating profit because of that debentures change, which ended up being a positive $287 million in the period, compared to a negative $382 million in Q4 2014. The company also expects to recover some taxes going forward. BlackBerry will continue to work towards getting back to profitability and cash flow breakeven.

Where estimates stand now:

BlackBerry is still showing huge drops in revenues when looking at prior year periods, although the sequential changes are much better. With the company beating on both the top and bottom line, we’ve seen some slight adjustments to analyst estimates since the earnings report. The following table summarizes where analysts were going into the report, and are now, for both the Q2 period as well as the current and next fiscal year.

We’ve seen mixed results in terms of estimates. All three periods have seen revenue estimates decrease, but adjusted EPS losses improve. The company certainly needed to cut expenses, and BlackBerry has done that quite nicely in recent years.

Now, it is time for revenues to start improving. Analysts are expecting a slight sequential decrease in revenues for Q2, although the current Q3 estimate is for $1.01 billion. That would be a sequential increase, and hopefully it comes. The year over year revenue decline for Q1 was 68.5%, while the Q2 drop is only expected to be 38.7%, and the Q3 drop 15.4%.

BlackBerry recently launched the Z3 phone in Indonesia, the first phone coming from the Foxconn partnership. On the conference call, the company noted that a launch in Vietnam has followed, with more countries coming a week later. India will be one of those countries, where interest appears to be fairly strong. BlackBerry is making a number of other efforts to drive revenues, and you can read about them in the conference call. This is the next stage of the turnaround, which analysts still see as a bit of a challenge.

Since the earnings report, we’ve also seen a couple of price target hikes. First, we had Citron, which upped its $15 price target to $20 after this report. The firm called BlackBerry CEO John Chen “one of the strongest and most credible leaders on Wall Street”. The firm also believes in the company’s “potential to provide software and services to help enable the proverbial Internet of Things”. Citron even thinks a tech giant could be interested in making a bid for the company. On Monday, we also saw Evercore up its price target by $4 to $10, and upgrade its rating to Equal Weight. Evercore likes the stabilizing cash burn and ability to hold on to its core base.

BlackBerry (NASDAQ:BBRY), left for dead not long ago, surged 24.33% last week on its better-than-expected fiscal first quarter earnings. Adding to the optimism, the tech firm recently inked an agreement with Amazon (NASDAQ:AMZN) to make more than 240,000 Android apps available to BlackBerry 10 clients via Amazon’s app store. Admittedly, much of BlackBerry’s recent stabilization has come from cost cuts, and the company’s stock is still in the hole to the tune of 29.83% over the past 12 months. For now, however, the turnaround engineered by CEO John Chen is attracting analyst accolades. John Chen’s turnaround strategy for BlackBerry (TSX: BB)(NASDAQ: BBRY) is starting to pay off. Last week, shareholders had a rare chance to boast after the company reported better-than-expected quarterly results. Athough the company still lost money during the fiscal first quarter, it was far less than the street had anticipated. Looking further out, there were a number of positives hinted at in this quarter. During the conference call, Chen predicted that BlackBerry Messenger is expected to generate $100 million in revenue next year through new services and advertising. The company is pushing to become the dominant player in emerging technologies such as mobile device management. There’s no doubt that BlackBerry is a distressed asset. However, at current prices, the stock is being valued as scrap. If John Chen can pull off this turnaround, the market capitalization on this company could grow multi-fold.


Above Average
As of 23 Jun 2014 at 10:16 AM EDT.


Open 9.93 P/E Ratio (TTM)
Last Bid/Size 10.03 / 40 EPS (TTM) -11.39
Last Ask/Size 10.04 / 134 Next Earnings 26 Sep 2014
Previous Close 9.81 Beta 1.19
Volume 12,633,648 Last Dividend
Average Volume 23,509,428 Dividend Yield 0.00%
Day High 10.14 Ex-Dividend Date
Day Low 9.86 Shares Outstanding 526.8M
52 Week High 15.09 # of Floating Shares 507.4532M
52 Week Low 5.44 Short Interest as % of Float 18.68%

Expand/Contract LEVEL 2 QUOTE

Market Maker Shares Bid Price Ask Price Shares Market Maker
American Stock Exchange 100 10.030 10.040 900 American Stock Exchange
Archipelago Stock Exchange 700 10.030 10.040 5,500 Archipelago Stock Exchange
4,000 10.030 10.040 100 Bats Trading, Inc.
Direct Edge ECN LLC 2,400 10.030 10.040 6,100
Nasdaq Execution Services, LLC. 1,400 10.030 10.040 600 Direct Edge ECN LLC
Bats Trading, Inc. 1,200 10.020 10.040 3,600 Direct Edge ECN LLC
Boston Stock Exchange 1,200 10.020 10.040 1,300 Philadelphia Stock Exchange
Direct Edge ECN LLC 900 10.020 10.050 2,000 Boston Stock Exchange
Philadelphia Stock Exchange 1,600 10.020 10.050 100 Timber Hill LLC
UBS Securities LLC 300 10.010 10.050 1,050 UBS Securities LLC
Timber Hill LLC 100 9.990 10.110 100 Citigroup Global Markets Inc.
Citigroup Global Markets Inc. 100 9.960 10.340 100 LATOUR TRADING LLC
Knight Capital Americas LLC 100 9.370 10.470 100 Knight Capital Americas LLC
Susquehanna Capital Group 100 9.330 10.670 100 Credit Suisse Securities (USA) LLC
Susquehanna Financial Group, LLP 100 9.320 10.680 100 Goldman, Sachs & Co.
Credit Suisse Securities (USA) LLC 100 9.310 10.720 100 The Vertical Trading Group, LLC
The Vertical Trading Group, LLC 100 9.310 10.760 100 Susquehanna Financial Group, LLP
Goldman, Sachs & Co. 100 9.280 10.760 100 Susquehanna Capital Group
Citadel Securities LLC 100 7.440 12.400 100 Citadel Securities LLC
Deutsche Bank Securities Inc. 100 7.300 12.620 100 CANACCORD GENUITY INC.
Oppenheimer & Co. Inc. 100 7.300 12.620 100 Robert W. Baird & Co. Incorporated
Vfinance Investments, Inc 100 7.300 12.620 100 BMO Capital Markets Corp.
Raymond James & Associates, Inc. 100 7.290 12.620 100 Cantor Fitzgerald & Co.
Wall Street Access 100 7.290 12.620 100 Cowen and Company, LLC
J.P. Morgan Securities LLC 100 7.210 12.620 100 CRT CAPITAL GROUP LLC
CANACCORD GENUITY INC. 100 7.200 12.620 100 FBR Capital Markets & Co.
Robert W. Baird & Co. Incorporated 100 7.200 12.620 100 INTL FCSTONE SECURITIES INC.
BMO Capital Markets Corp. 100 7.200 12.620 100 JEFFERIES LLC
BREAN CAPITAL, LLC 100 7.200 12.620 100 JMP Securities LLC
Cowen and Company, LLC 100 7.200 12.620 100 Keefe, Bruyette & Woods, Inc.
FBR Capital Markets & Co. 100 7.200 12.620 100 Maxim Group LLC
JEFFERIES LLC 100 7.200 12.620 100 Knight Capital Americas LLC
JMP Securities LLC 100 7.200 12.620 100 Piper Jaffray & Co.
Keefe, Bruyette & Woods, Inc. 100 7.200 12.620 100 RBC CAPITAL MARKETS, LLC
LEERINK PARTNERS LLC 100 7.200 12.620 100 Stifel, Nicolaus & Company, Incorporated
Maxim Group LLC 100 7.200 12.620 100 William Blair & Company L.L.C.
Piper Jaffray & Co. 100 7.200 12.650 100 J.P. Morgan Securities LLC
Stifel, Nicolaus & Company, Incorporated 100 7.200 12.690 100 MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
William Blair & Company L.L.C. 100 7.200 12.690 100 Raymond James & Associates, Inc.
Knight Capital Americas LLC 100 7.190 12.690 100 Wall Street Access
Cantor Fitzgerald & Co. 100 7.180 12.710 100 AUTOMATED TRADING DESK FINANCIAL SERVICES, LLC
INTL FCSTONE SECURITIES INC. 100 7.180 12.710 100 Deutsche Bank Securities Inc.
RBC CAPITAL MARKETS, LLC 100 7.180 12.710 100 G1 Execution Services, LLC
WELLS FARGO SECURITIES, LLC. 100 7.160 12.710 100 Barclays Capital Inc./Le
AUTOMATED TRADING DESK FINANCIAL SERVICES, LLC 100 7.150 12.710 100 Needham & Company, LLC
BNY MELLON CAPITAL MARKETS, LLC 100 7.150 12.710 100 Oppenheimer & Co. Inc.
CONCEPT CAPITAL MARKETS, LLC 100 7.150 12.710 100 Vfinance Investments, Inc
G1 Execution Services, LLC 100 7.150 12.720 100 BNY MELLON CAPITAL MARKETS, LLC
Janney Montgomery Scott Inc. 100 7.150 12.720 100 CONCEPT CAPITAL MARKETS, LLC
Barclays Capital Inc./Le 100 7.150 12.720 100 Janney Montgomery Scott Inc.
Murphy & Durieu 100 7.150 12.720 100 Murphy & Durieu
Needham & Company, LLC 100 7.150 12.720 100 Pacific Crest Securities Inc.
Pacific Crest Securities Inc. 100 7.150 12.720 100 Suntrust Robinson Humphrey, Inc.
Suntrust Robinson Humphrey, Inc. 100 7.150 12.720 100 WEDBUSH SECURITIES INC.
Two Sigma Securities, LLC 100 7.150 12.730 100 Two Sigma Securities, LLC
Wells Fargo Securities, LLC. 100 7.150 12.730 100 Wells Fargo Securities, LLC.


U.S. RESEARCH ROUNDUP-DISH Network, Nokia, Nordstrom Inc, Nucor

1 hour ago – Reuters
June 23 (Reuters) – Wall Street securities analysts revised their ratings and price targets on several U.S.-listed companies, including Nordstrom, Bla…


BlackBerry Limited, formerly Research In Motion Limited is a designer, manufacturer and marketer of wireless solutions for the worldwide mobile communications market. Through the development of integrated hardware, software and services, it provides platforms and solutions for seamless access to information, including e-mail, voice, instant messaging, short message service (SMS), Internet and intranet-based applications and browsing

Shipping Sector : Zack’s Updates / Ratings DRYS and TNK

23 June 2014Baltic Dry Index (BDI)    -18   886 


(Cape index)


(Panamax index)


(Supramax index)




















7451 9722
DryShips, Inc. (DRYS) was a big mover last session, as the company saw its shares rise over 7% on the day. The move came on solid volume too with far more shares changing hands than in a normal session. This continues the recent uptrend of the company, as the stock has gained nearly 11% in the past one-month time frame.
This ocean transportation and offshore drilling services company has seen no estimate revision in the last 7 days. The Zacks Consensus Estimate hasn’t been in trend either. Yesterday’s rally is encouraging though, so make sure to keep a close watch on this firm in the near future.
DryShips currently has a Zacks Rank #3 (Hold) while its Earnings ESP is negative.
Some other Medical Drug stocks worth considering are Euroseas, Ltd. (ESEA), Global Ship Lease, Inc. (GSL) and Kirby Corp.(KEX). All the three stocks hold a Zacks Rank #2 (Buy).
Teekay Tankers Ltd. (TNK) was a big mover last session, as the company saw its shares rise nearly 11% on the day. The move came on solid volume too with far more shares changing hands than in a normal session. This breaks the recent trend of the company, as the stock is now trading above the volatile price range of $3.46 to $3.88 over the past one-month time frame.None of the estimates for this shipping stock were revised over the past 30 days. The Zacks Consensus Estimate also remained unchanged during the same time frame.  The recent price action is encouraging though, so make sure to keep a close watch on this firm in the near future.Teekay Tankers carries a Zacks Rank #3 (Hold), while its Earnings ESP is 0.00%.


Above Average
As of 23 Jun 2014 at 11:08 AM EDT.


Open 4.27 P/E Ratio (TTM) 17.7x
Last Bid/Size 4.39 / 26 EPS (TTM) 0.24
Last Ask/Size 4.40 / 2 Next Earnings 4 Aug 2014
Previous Close 4.25 Beta 2.11
Volume 578,556 Quarterly Dividend 0.0300
Average Volume 590,429 Dividend Yield 2.73%
Day High 4.45 Ex-Dividend Date 15 Apr 2014
Day Low 4.17 Shares Outstanding 83.7M
52 Week High 5.08 # of Floating Shares 62.75428M
52 Week Low 2.49 Short Interest as % of Float 13.74%

However, some better-ranked stocks in the same sector include China COSCO Holdings Company Limited (CICOY), Euroseas, Ltd.(ESEA) and Global Ship Lease, Inc. (GSL). All these stocks hold a Zacks Rank #2 (Buy).


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