AngioDynamics HOLD

ANGO : NASDAQ : US$15.85

Target: US$16.25

AngioDynamics develops, manufactures, and markets a
broad line of products for minimally invasive surgical
procedures to treat peripheral arterial disease.
AngioDynamics’ devices are used by interventional
radiologists and vascular surgeons to treat non-coronary
disease. Major product lines include angiographic
catheters, hemodialysis catheters, image-guided vascular
access products, as well as varicose vein ablation
products (laser and drug).

All amounts in US$ unless otherwise noted

Life Sciences — Biomedical Devices and Services
Investment recommendation
ANGO reported fiscal Q3 sales that came in better than our/consensus
expectations, but earnings leverage is taking a little longer to catch up to
the top-line performance. Total sales in FQ3 increased 8% Y/Y (vs. our
+6.5%E), and was highlighted by growth in each of the business units –
Peripheral Vascular (+11% Y/Y), Vascular Access (+3% Y/Y), and
Oncology (+15%). However, GM and pro-forma EPS missed our
estimates again, and while the company modestly increased F2014 sales
guidance, it lowered guidance for operating cash, FCF, and EPS.
We are encouraged by ANGO’s performance over the past couple of
quarters but remain cautious about recommending ANGO at these levels.
For us to get more constructive on the name, we want to see at least a
few more quarters of consistent improvement in the business and
evidence of sustained operating leverage. We raise our target to $16.25
but maintain our HOLD rating.
Investment highlights
 FQ3 revenue of $88.2M (+8%) modestly exceeded our/consensus
estimate of $86.9M.
 GM of 51.8% (+80 bps Y/Y) was below our expectation of 52.1%
owing to product mix.
 ANGO modestly raised its guidance range for F2014 revenue and
now expects $351-355M (+3-4%), but FCF guidance range reduced
to $20-$21M (from $25-$28M) based on ERP impact and inventory

Our Mantra For Mondays

If you see me talking to myself, don't be alarmed.  I'm getting expert advice.<br /><br />
Facebook: In5d Esoteric Metaphysical and Spiritual Database<br /><br />
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Trading Losses

The reason we have cash is to take advantage of bargains presented by Mr. Market





Seadrill Fear and Loathing – Barron’s

Shares of Seadrill (SDRL) have dropped despite the Europe-listed shares getting an upgrade atSociété Générale today, as the investment bank still sees better opportunities in Noble (NE),Ensco (ESV) and Rowan (RDC).


Société Générale Guillaume Delaby andEdward Muztafago explain why they raised their rating on Seadrill and why they’re still not fans of the offshore driller:

Our previous Sell rating (report link, 28 October), was partly based on the risk of floaters oversupply post 2013, which has now materialized. Assuming a “normal” and “gentle” scenario, we believe that: 1) 2014, 2015 and 2016 consensus might now be a bit too low and, 2) the current $3.92 annual dividend (11% dividend yield) might also be secure. In that context, and even assuming a slightly more grim 2014 (before a pick-up in 2015), our Sell rating is no longer warranted in our view. But in the event of an unexpected harsher scenario of declining oil prices and/or higher interest rates, we find little reassurance at Seadrill whose net debt, according to our forecasts, could rise to $17.5bn by the end of 2015 (237% gearing), a high level even by Seadrill’s own standards.

Delaby and Muztafago explain why Noble, Rowan and Ensco are better bets:

All in all, and while Seadrill is no longer a “Sell” or our “least preferred stock” (now SBM Offshore), we believe that US competitors like Noble, Rowan and Ensco (covered by SG analyst Edward Muztafago out of the US) are much more attractive given: 1) 6-8% expected dividend yields (2015-2016e), 2) above 15% FCF yields and 3) reasonable 35-50% gearing levels. Put another way, they offer only slightly less expected financial rewards for a much lower degree of financial risk in our opinion.

Still, not everyone’s a fan of even those drillers–yesterday Barclays cut its price targets on Rowan and Ensco, among others.

Shares of Seadrill have fallen 0.7% to $34.74 at 10:20 a.m. today, while Noble has dropped 0.8% to $31.03, Rowan has declined 0.9% to $31.30 and Ensco is off 0.5% at $50.39.

60 % Return Offered

A Canadian woman is facing 110 charges in Washington State for allegedly soliciting $135 million from hundreds of investors on both sides of the border with a Ponzi scheme built around a payday loan business.

According to the B.C. Securities Commission (B.C.S.C.), Doris Elizabeth Nelson financed the growth of a number of businesses known as the Little Loan Shoppe by paying existing investors a commission to recruit new investors.

Nelson allegedly told the investors that because her business was so profitable, she could afford to issue promissory notes paying annual interest rates of up to 60 per cent, the B.C.S.C. alleged in statement issued on Monday.

“She also said that the investment was risk-free. In reality, her business was not profitable due to its high rate of customer loan defaults,” said the statement.

In total, Nelson paid out $118 million to investors, including $2.2 million in commissions to recruiters, but about $17.4 million went to operating costs, personal withdrawals by Nelson and other unaccounted losses.

“Nelson was able to create the appearance of profitability, and to pay high rates of interest on the promissory notes, only because she used money obtained from later investors to make payments to earlier investors,” the statement said.


The answer to a number of readers asking why I can ” only ” offer 12 % on a promissory note .


Transition Therapeutics Inc.

TTH : TSX : C$8.56
Target: C$13.25

Transition Therapeutics is a clinical-stage biotechnology
company developing novel therapeutics for the treatment
of central nervous system diseases and diabetes. The
company’s lead drug, ELND-005, is in Phase II clinical
testing as a potential therapy in both bipolar disorder and
neuropsychiatric symptoms associated with Alzheimer’s
disease. Transition has partnered the development of
diabetes drug TT-401 with Eli Lilly.
All amounts in C$ unless otherwise noted

Life Sciences — Biotechnology
Investment recommendation
Transition has provided an update on its clinical programs, announcing
the discontinuation of the Phase II study of D-5 in bipolar disorder. We
view this as a positive move, focusing the company’s resources (cash
and otherwise) on clinical trials with the highest probability of success.
An analysis of previous D-5 studies suggested a durable response on
relevant NPS endpoints, highlighting the rationale to continue the Phase
II in agitation and aggression in Alzheimer’s disease.
Investment highlights
 A disciplined approach. We believe that the discontinuation of both
the bipolar trial and TT-601 demonstrates a disciplined approach to
drug development, as well as a prudent use of resources.
 Cash balance just sufficient to fund D-5 to Phase II data. We
estimate that Transition has pro forma cash of ~$51 million, which
is sufficient to participate in TT-401 development with partner Lilly
and fund D-5 development for at least the next 12 months.
 D-5 has huge potential. D-5 has received Fast Track designation
from the FDA, and we believe could receive Priority Review if
clinical trials are successful. Although clinical data is now not
expected until the middle of 2015, we believe that this is an
appropriate time to position ahead of this catalyst.
We value TTH using an explicit NPV model for D-5 in AD NPS, and a
pNPV for TT-401 in diabetes. Following this update, we have removed
bipolar from our model, revised our assumptions for improved
economics in AD NPS, and adjusted our TT-401 model to reflect Phase II
development. Based on these changes, we are raising our target to
C$13.25 (from C$9.80), which supports our SPECULATIVE BUY ratin

Verizon Communications

VZ : NYSE : US$48.04

Target: US$55.00

Verizon Communications is a leading provider of
communications, information and entertainment
products and services to consumers, businesses and
governmental agencies. Formerly known as Bell Atlantic
Corporation, the company offers both wireless and
wireline products and services. The company is
headquartered in New York, New York.
All amounts in US$ unless otherwise noted.

Investment recommendation
We are adjusting our estimates to account for the closing of the
Vodafone/Verizon Wireless transaction earlier than we had
assumed in our initial model. We maintain our BUY rating and
$55 price target which implies 7.0x 2015 adjusted EBITDA (pro
forma for VOD buyout of VZW ownership) and 14.7x pro forma
2015 EPS.
Investment highlights
 Deal closed 2/21/14 – With the consolidation now complete,
we update our estimates to reflect full pro forma adjustments
in Q1/14. We previously assumed the deal would close at
 No change to above-the-line estimates – As the consolidation
only affects items below, our revenue and EBITDA estimates
are unchanged. Our new estimates reflect materially lower
minority interest, higher interest expense due to increased
gross debt, and a higher pro forma tax rate.
 Continue to favor over others in space – As the continued
market leader in the US wireless industry, we continue to
favor Verizon over others in the sector. We believe a solid
Q1/14 report from its now wholly-owned wireless business
will continue to differentiate Verizon from the others in the


Google – Adjusting for Stock Splits

GOOG : NASDAQ : US$543.14
Target: US$700.00

Technology — Internet
Key points
 We are adjusting our estimates and price target purely to reflect
Google’s previously announced 2-for-1 stock split.
 Class A shares will trade under the new ticker GOOGL, while Class C
shares will assume the GOOG ticker. Newly issued shares going
forward will be Class C shares. Class A shares will have one vote
each, while the non-traded Class B (management) shares will have
10 votes each.
 Given that Class C GOOG shares should be more liquid than Class A
GOOGL shares and that there is a “make-good” provision in place to
close any potential value spread arising from the voting
discrepancy, we do not expect a significant spread to materialize
between the Class A and Class C shares.
Estimate changes
We are adjusting the number of shares to incorporate the stock
dividend. As a result, our share count goes to 685m, 689m and 693m
from 342m, 344m, and 346m in 2014, 2015 and 2016. As a result, our
non-GAAP EPS estimates go to $28.52, $33.61 and $39.01 from $57.04,
$67.22, and $78.02 in 2014, 2015 and 2016.
We maintain our BUY recommendation and cut our price target from
$1,400 to $700 to adjust for the stock split. Our new target is based on
21x (unchanged) our 2015 non-GAAP EPS estimate of $33.61 (adjusted
from $67.22).

Trading Alert: TINY Rises above the DOW slide



PRICE up – volume nothing special

Jack A. Bass Managed Accounts added today at $ 3.66
Below Average
As of 07 Apr 2014 at 3:56 PM EDT.



Open 3.59 P/E Ratio (TTM)
Last Bid/Size 3.71 / 6 EPS (TTM) -0.65
Last Ask/Size 3.73 / 11 Next Earnings 5 May 2014
Previous Close 3.57 Beta 1.33
Volume 142,505 Last Dividend
Average Volume 164,877 Dividend Yield 0.00%
Day High 3.73 Ex-Dividend Date
Day Low 3.51 Shares Outstanding 31.2M
52 Week High 3.94 # of Floating Shares 28.56703M
52 Week Low 2.83 Short Interest as % of Float 0.66%

An Open Letter To Burger King

I am a business consultant and herewith offer a few observations at no cost !

I used to have my morning coffee at your rival McDonald’s. I received a coupon promotion for coffee – and for 25 cents I thought I’d give your local restaurant a try. First visit – last week – I find the restaurant not open until 8:00 a.m. – so anyone out for coffee won’t head to BK. One of the great lessons a restaurant learns is that the bank charges interest 24 hours a day .

Second visit 8:05 this week – just me and the staff despite the coffee at a fraction of what others charge . The colors of the restaurant are dull – blue / grey. What you learn is that restaurant patrons do not want to be all alone in a large building.

Why aren’t you advertising to the seniors that fill McDonald’s in the early morning ?People attract people – you are not gaining any ” community ” of early morning patrons or folks grabbing something before their commute / office.

Third visit – the aft ernoon. Much busier – but not to your main rival’s level AND importantly – with only two people asking for coffee : 1) the staff relied on remembering our orders – no display terminal 2) my order – coffee with one cream wrong – and had to be redone 3) the staff calls out orders to each other because there was no display screen for orders

This is not a staff problem – the people were friendly and doing their best. You as an organization are failing your clients , staff and shareholders. Great potential – but they used to say the same about me.   Jack A. Bass


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