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DRYSHIPS Analysts Update

Re: Jack A. Bass Managed Accounts

1 % set up fees

20 % annual performance fee

Shares of DryShips (NASDAQ:DRYS) was the target of some unusual options trading activity on Friday. Stock investors acquired 21,588 call options on the stock, AnalystRatingsNetwork.com reports. This is an increase of approximately 179% compared to the average volume of 7,726 call options.

DRYS has been the subject of a number of recent research reports. Analysts at Zacks reiterated a “neutral” rating on shares of DryShips (NASDAQ:DRYS) in a research note to investors on Friday. They now have a $3.00 price target on the stock. Separately, analysts at UBS AG initiated coverage on shares of DryShips (NASDAQ:DRYS) in a research note to investors on Thursday, August 22nd. They set an “outperform” rating on the stock. They noted that the move was a valuation call. Finally, analysts at Imperial Capital initiated coverage on shares of DryShips (NASDAQ:DRYS) in a research note to investors on Thursday, August 22nd. They set an “outperform” rating and a $2.75 price target on the stock.

Five equities research analysts have rated the stock with a hold rating and three have assigned a buy rating to the stock. The stock presently has a consensus rating of “Hold” and a consensus target price of $2.40.

DryShips (NASDAQ:DRYS) traded up 4.16% on Friday, hitting $2.88. 23,919,192 shares of the company’s stock traded hands. DryShips has a 1-year low of $1.46 and a 1-year high of $2.78. The stock’s 50-day moving average is $2.12 and its 200-day moving average is $1.95. The company’s market cap is $1.163 billion.

DryShips (NASDAQ:DRYS) last posted its quarterly earnings results on Wednesday, August 7th. The company reported ($0.05) EPS for the quarter, beating the Thomson Reuters consensus estimate of ($0.07) by $0.02. The company had revenue of $336.10 million for the quarter, compared to the consensus estimate of $329.57 million. During the same quarter in the prior year, the company posted ($0.05) earnings per share. The company’s quarterly revenue was up .0% on a year-over-year basis. On average, analysts predict that DryShips will post $-0.25 earnings per share for the current fiscal year.

 

Nokia Sale To Microsoft

Image representing Nokia as depicted in CrunchBase

Image via CrunchBase

NOK : NYSE : US$3.90 HOLD 
Target: US$5.50 

COMPANY DESCRIPTION:
Nokia Corporation designs, manufactures, and sells a full range of mobile devices as well as network infrastructure along with services and software on a global basis. The company offers mobile phones and devices based on common mobile phone standards and offers devices that range from entry level to high-end, multifunction smartphones.
All amounts in US$ unless otherwise noted

Technology — Communications Technology — Wireless Equipment
NOKIA SELLS DEVICES & SERVICES BUSINESS TO MICROSOFT FOR ALL-CASH €5.4B TRANSACTION
Investment recommendation: With our global surveys indicating gradually improving Windows Phone 8 smartphone sales due to strong sales of the Lumia 520 and other mid/low-tier Lumia smartphones, we believe the timing makes sense for Microsoft to purchase Nokia’s Devices & Services business in order to fund stronger long-term growth trends. We maintain our HOLD rating but increase our price target to $5.50 ahead of Nokia’s 8 AM EDT conference call.
Investment highlights
 Microsoft will pay €3.79 billion to purchase Nokia’s Devices & Services business and €1.65 billion to license Nokia’s patents for a total transaction price of €5.44 billion in cash. We believe the transaction should close in the first quarter of 2014.
 Our recent survey work indicated steadily improving sales of the Lumia 520 and other low/mid-tier Lumia smartphones. In fact, our surveys indicated solid Lumia 520 sales not only in emerging markets such as Russia and key APAC region countries, but also in developed markets such as the U.K. and the U.S.
 We believe Microsoft with its strong balance sheet and increased focus on hardware devices can help accelerate the growing WP8 smartphone momentum. We estimate Lumia sales now constitute over 85% of WP8 smartphone sales. We believe Microsoft has recently worked more in concert with Nokia to drive sales, as evidenced by Microsoft’s advertising campaign featuring Lumia features and by Nokia 1020’s ranking as a top 3 selling smartphone at AT&T.
Stephen Elop is stepping down as CEO, as Nokia focuses on its three businesses of NSN, HERE, and Advanced Technologies.
 Due to improving Lumia sales trends and prior to the acquisition closing , we slightly raise our 2H/C2013 and C2014 D&S handset sales estimates, resulting in our 2013 non-IFRS EPS estimate increasing from $0.04 to $0.06 and our 2014 estimate increasing from $0.07 to
$0.10.
Valuation: Our $5.50 price target (was $33.30) is based on our sum-of-parts analysis.

 

Avago Technologies Limited

AVGO : NASDAQ : US$36.56
BUY 
Target: US$45.00

COMPANY DESCRIPTION:
Avago Technologies Limited is a designer, developer and global supplier of analog semiconductor devices. Avago offers products in three primary target markets: wireless communications, wired infrastructure, and industrial and automotive electronics. Applications for Avago products include smartphones, connected tablets, consumer appliances, data networking and telecom equipment, and enterprise storage and servers.

Technology — Communications Technology — Semiconductors
STRONG Q3/F13 RESULTS; WIRELESS AND WIRED DIVISIONS DRIVE STRONG Q4/F13 GUIDANCE
Investment recommendation:

Avago reported strong Q3/F13 results above our estimates with strong Wired and Industrial division sales offsetting weaker-than-expected Wireless demand. Further, Avago guided to strong sequential sales growth in Q4/F13 driven by strong
trends in the company’s Wireless and Wired divisions. We believe Avago’s proprietary technologies, strong IP portfolio, and diverse customer base in several growth markets position the company for strong long-term growth trends with industry-leading margins.

We reiterate our BUY rating and increase our price target to $45.
Investment highlights
 Q3/F13 sales of $644M and pro forma EPS of $0.74 were above our $623M/$0.68 estimates driven by 18% Q/Q sales growth in the higher-margin Industrial and Wired Infrastructure (excluding CyOptic sales) divisions versus our mid-single digit growth estimates for each division. CyOptics contributed $21M in sales during the quarter and should contribute $55M in Q4.
 Wireless sales increased only 3% sequentially or below management’s high-single digit sequential growth guidance, but
this is consistent with our analyses indicating softer high-tier smartphone sales trends during Q3/F13.
 Avago management guided to a 12-15% Q/Q sales increase for Q4/F13 driven by solid Q/Q growth in the Wireless and Wired Infrastructure divisions. Management anticipates mid-teens percent Q/Q growth in the Wireless division due to sales ramping into new smartphone programs at both Apple and Samsung, as Avago is benefitting from increased content share in high-end LTE smartphones.
 Given the strong results and our expectations for sustained growth trends, we have increased our F2013 pro forma EPS from $2.76 to $2.82 and F2014 from $3.29 to $3.30.
Valuation: Our $45 price target is based on shares trading at roughly 13x – 14x our F2014 pro forma EPS estimate.

Credit Suisse Shipping Sector Review / Rate Forecast

Credit Suisse published an interesting piece of research on Dry Bulk Shipping commenting that Dry bulk rates suffered in 2012 (one of the worst years in history), with average spot rates for Capes and Panamaxes at breakeven levels.

While 2013 is off to a sluggish start, Credit Suisse believes that 2012 was the trough in the current dry bulk cycle. While they expect rates to bounce along the bottom this year – they expect 2013 to be better than 2012 – with the rate recovery taking hold in 2014.

The analyst expects average Cape spot rates of $17,000 ($7,000 YTD) and Panamaxes at $12,000 ($6,000 YTD) in 2014. A key point in the research note is the aging global bulk carrier fleet. The worldwide dry bulk stands at ~10,000 ships comprised predominately by Capes (41%) Panamaxes (26%) and Handymaxes (20%). The average age of the world dry bulk fleet is 9.5 years old but only 8.0 years old on a capacity weighted average as the Cape fleet (largest vessel) is usually the youngest as iron ore (primary cargo) is the most strenuous cargo on a ship’s hull.

Given the types of cargos Handy vessels trade (primarily grains and minor bulks), it is not uncommon for Handys to trade well beyond their average useful life. The analyst noted that 67% of the fleet is 0-10 years old and 11% is in the scrapping zone of 20+ years old.

Build Your Portfolio On A Solid Foundation : All You Need To Succeed – in 500 pages of Investing Strategy and Selections


Stock Market Magic: Building Your Apprentice Millionaire Portfolio 2012: All you need to succeed in today's stock market

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Stock Market Magic:

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 All you need to succeed in today’s stock market [Paperback]

Jack A. Bass (Author)

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Jack A. Bass / AMP Hedge Fund Beats Barclay Index

Jack A. Bass returned 18.5 % for the first seven months of 2013 compared to 5.8 % for the Index.

Barclay Hedge Fund Indices July
ROR†
Number of
funds reporting†
YTD through
July †
Barclay Hedge Fund Index 1.68% 2075 5.81%
Hedge Fund Industry Money Under Management
SUB INDICES
Convertible Arbitrage Index 0.84% 24 5.36%
Distressed Securities Index 2.20% 39 10.46%
Emerging Markets Index 0.58% 379 -0.43%
Equity Long Bias Index 3.40% 246 12.12%
Equity Long/Short Index 2.02% 384 7.98%
Equity Market Neutral Index 0.87% 62 5.01%
Equity Short Bias Index -4.50% 3 -19.59%
European Equities Index 2.00% 103 6.11%
Event Driven Index 1.68% 86 5.14%
Fixed Income Arbitrage Index 1.06% 34 4.56%
Fund of Funds Index 0.95% 675 4.23%
Global Macro Index -0.09% 103 1.92%
Healthcare & Biotechnology Index 4.02% 29 15.48%
Merger Arbitrage Index 0.96% 30 2.24%
Multi Strategy Index 1.17% 61 4.49%
Pacific Rim Equities Index 1.21% 42 14.03%
Jack A. Bass / AMP Hedge Fund 4.5% 21 18.5% 

 

†Estimated performance for July 2013, number of funds included and YTD calculated with reported data as of August-18-2013 10:15 US CST

All You Need To Succeed – in 500 pages of Investing Strategy and Selections


Stock Market Magic: Building Your Apprentice Millionaire Portfolio 2012: All you need to succeed in today's stock market

Available at http://www.amazon.com

Stock Market Magic:

Building Your Apprentice

Millionaire Portfolio

 

 All you need to succeed in today’s stock market [Paperback]

Jack A. Bass (Author)

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Price: $28.95 & this item ships for FREE with Super Saver Shipping

Rubicon Technology

De :fr:Image:SaphirSynthetique.jpg Categoría:M...

De :fr:Image:SaphirSynthetique.jpg Categoría:Minería (imagen) (Photo credit: Wikipedia)

RBCN : NASDAQ : US$9.18
BUY 
Target: US$12.00

COMPANY DESCRIPTION:
Based outside of Chicago, IL, Rubicon Technology is a materials company specializing in growing monocrystalline sapphire products mainly for the LED and RFIC markets. It supplies 2″, 3″, 4″ and 6″ sapphire cores and wafers as well as sapphire optical products for the aerospace and defense market.

Investment recommendation


We maintain our BUY rating on RBCN shares as we believe sapphire trends are improving and valuation is favorable.
Investment highlights
Rubicon’s Q2 was largely in-line but Q3 guidance disappointed as a gradual ramp in volumes is still limiting the positive pricing effects we have been talking about in 2” and 4” products, plus 6” sales remain slow.

Revenues were $10.6M and EPS were ($0.25), compared to our estimates of $9.9M/($0.23) and consensus of $10.8M/($0.21). Guidance was for revenues to be similar to Q2 while we and the Street were looking for a ~$5M sequential uptick.
 $3.7M of the losses were due to underutilization, and the company was able to work down inventory and AR collections, resulting in $5M in cash generation in the quarter. Overall inventory levels still remain high and idle crystal growth capacity is not expected to come back online until next year. These effects may contribute to losses on the income statement, but
at least cash burn will be muted going forward.
The soft Q3 results were deeper than we expected; however, we remain convinced that overall trends in sapphire are improving driven by increased lighting adoption and new possible handset applications.
Cash burn is slowing/reversing, plus Rubicon can generate a meaningful amount of operating leverage once both pricing and volumes increase.
Furthermore, as a volume play to two exciting secular trends we continue to believe the company will see multiple expansion over the 2014/2015
timeframe. We would therefore use pullbacks on near-term quarterly
weakness to add to positions.

Black Diamond

BDE

NASDAQ : US$10.45
BUY 
Target: US$13.50

COMPANY DESCRIPTION:

Un casque d'esclade black diamond.

Un casque d’esclade black diamond. (Photo credit: Wikipedia)


Black Diamond Inc. is a leading provider of outdoor recreation equipment and lifestyle products. BDE also develops, manufactures and distributes a broad range of products used for climbing, mountaineering, backpacking, skiing, and various other outdoor recreation activities under the Black Diamond and Gregory brands.

Investment recommendation
BDE reported EPS of -7c vs. our -4c estimate with the shortfall relative to our estimates coming from $2.5M less in sales and 70bps less of gross margin expansion as a cold/wet spring season resulted in spring cancellations. Weather volatility continues to make retailers more cautious with fall orders (a consistent theme across the industry) and thus are pushing the inventory risk onto vendors, BDE included. 2013 sales/margin guidance was lowered due to cancellations and FX pressures. Importantly BDE’s inventory is clean (+7% vs. sales +22%) and sets the stage for re-orders, when/if weather materializes. With apparel launching next month, POC’s new road line in 2014, and the integration of Gregory Japan and PIEPS going smoothly, the long term growth thesis is intact. As such, we reiterate our BUY.
Investment highlights
 Full-year guidance now calls for sales of $205-$210M from $216-$221M, and gross margin of 38.5%-40% from 40%-41%. Sales growth target of 20% in ’14 was unchanged, and given the many drivers coming into play over the next 18 months, looks conservative.
Gross margin trends remain favorable (+120bps in Q2), in spite of continued FX headwinds as POC, Gregory Japan, and apparel are expected to be gross margin accretive into 2014.
Valuation
Our $13.50 target is derived by our DCF analysis

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