My Own Analyst

My Bad

Should have rolled MAKO trade into MASI - nice quarter.  It wasn't great, but it was good enough to improve investor confidence in my opinion.  I saw no reasons for concern and stand by my 36 target a year out.  ONE OF MY BEST IDEAS...

Morning stuff

On IRG, the analysts are pretty negative.  I re-read my message from yesterday -  I think my wording was poor.  It was bad news, but it's not the end of the world.   I said 16-17, and that's where it is this morning.  I think my target will come down - not sure I want to be involved as restaurant stocks are too darn expensive.  15 is where I get interested - maybe it gets there.

PJ loves MAKO, and they boosted the target from 23 to 26.  This was the second straight quarter of not screwing the pooch.  With so many shorts and no end-of-the-world scenario, maybe we get our 14.

EZPW didn't give guidance - about to give up on them

AVX out with inline earnings on slight sales miss.  Their peer VSH was hit hard yesterday.  The backlog grew for AVX - sounds good...

 

MAKO

So far so good.  I will listen to the call to confirm, but the guidance was unchanged (so not a disaster).  There were some one-time charges this quarter and a deferred sale in Italy - looks like a reasonably good quarter though.  Huge short-interest (like PBI)...

IRG

Pre-announce reads ugly, but it's not.  They had some issues with their new acquisition and decided to spend money, which hurt the quarter, but the investments appear to have paid off.  Keep in mind that there could be a secondary issue here (the private equity owner).  I like it 16-17.

PBI and LMNX

The PBI call was good - the entire guidance reduction was due to the asset sale.  The quarter was strong, but it wasn't really much of a change (there were some sales that tend to be lumpy and might not be sustainable and there was a tax benefit).  Loeb had an analyst on the call - they had a small new position in Q1 and this could become one of their "agitation" plays after raising all that money selling YHOO.  I think the move today is short-squeeze, but longs (like me and like my client) are likely to feel like this long-term turnaround story is on track.

I guess in hindsight that the charts, the valuation and the overbought nature of LMNX should have forced me to reduce it further.  One of the Top 20 sales is in the money (above 22), the other still not (near 20).  It's volatile - no real change in the story, but I am sure others were also looking for something to justify the recent run, and it wasn't there.  I will likely look to add to the name if it gets back towards 20, but it probably won't.  Rising 50dma at 21 has held so far...

Early Reports

PBI's outlook is a little worse, but they also sold a non-core asset.  Importantly, the balance sheet is improving and the stock still remains very cheap.  I think the stock should be ok, but this won't be a breakout most likely

OMI - in line and guidance unch

EZPW - looks worse than expected and out early.  They didn't include guidance either, which is disturbing.  Call is after close

NATI was very bad last night - miss and weak guidance

TXRH was disappointing last night as well - July sales very weak

LMNX was ok and guidance is unchanged though an issue related to reimbursement is hurting their business slightly and could push them to low end of sales guidance.  Bottom line here is that I still don't get why the stock has been so strong, which means that it could pull back a little (smoke and no fire).

Monday Morning Musings

First, we have the webinar tonight (6 EST).  Hopefully the webcast will be archived after a fail last time.  Here are the slides:

Download AnalyticalTraderWebinar072913

To participate, you need to register:   https://attendee.gotowebinar.com/register/3375587910586824192

As I expected, ISRG boosted its share repurchase authorization and announced a $500mm accelerated buy.  

BEN looked ok, but not guidance

SWI announced $50mm repurchase

PJ says MAKO utilization survey was "solid" (they love MAKO though)

HRL caught a buy upgrade from Credit Suise with a a 46 target

INGR caught a buy upgrade from BB&T with a 81 target

Weekend Update - Earnings Season Volatility Edition

The markets went nowhere, but stocks were all over the place.  I counted 44 stocks in the R3000 that fell by more than 10%, for instance.  Such is earnings season.

I have been trying to get some confidence in the outlook for the market the rest of the year, and I remain a bit confused.  To the market's credit, key sector Financials (XLF) seems to be just fine.  Of the 9 sector ETF funds (there are 10 sectors, but Telecom is included with Tech), Materials (XLB), Consumer Staples (XLP), Technology (XLK) and Utilities (XLU) have yet to break prior highs, but the majority of the market (number of sectors, market cap) has done so.  By the way, Health is the only sector more than 1 on my price momentum.  There is certainly no technical reason the market can't keep going.

My feel at this time is that we are creating a long-term top that could take 6 months or so to form.  I am leaning towards 2014 being a down year.  I need to give it thought and make sure I have all the angles covered.  After five straight up years, is this so unreasonable to consider?  More on this soon.

Looking at the watchlist ( Download Watchlist072613 ), 50 of 100 names closed above the 10dma.  SWI was the only 10% loser, but ALGT, OUTR, IRBT, ATMI and TYPE were all 8% or more (two of these were black 1s).  The only 10% plus gainer was FLIR.  SWI is the only stock oversold by more than 2 units (-2.37), while there are several between one and two units:  ISRG (-1.92), LQDT (-1.64), TITN (-1.36), ANV (-1.27), MAT (-1.12) and INGR (-1.03).  On my "prospects", EXPE fell sharply and is -2.14.  Between -1 and -2 include AGN, ABAX (interesting little company) and SHW.  TPX too, but I don't really like that one still.  URI and CE joined QCOM and ANV on the "35%+ one-year return" list.  I added URI recently - it is a very attractive story in my view.  My target is just 12PE.  I continue to watch QCOM - expecting to get better entry in next few months, but  I could be underestimating potential.

Looking at the stocks in the models ( Download Positionwatch072613 ), I lowered the target on SWI to reflect slightly lower earnings and a reduction in the PE.  I raised OMI slightly on an earnings adjustment.  We have LMNX reporting Monday - hopefully we learn why that stock is so stoked (overbought, somewhat expensive now).  BEN reports too - note that it split 3:1.  OMI reports Tuesday, along with INGR (already pre-announced) and PBI. MAKO is the big one that day.  AVX and MASI report on Wednesday, CAH and IIVI on Thursday and CVX on Friday.  Finally, I continue to monitor MW and CATO for potential sale, as my projected returns don't look so great.  Finally, I want to share a comment on NEM.  I caught the call.  This is best-in-breed.  The miners are tough, but these guys stand out.  I like that they are acting very long-term - operational improvements, capital allocation, etc.  The chart is bottoming.  Probably takes gold price rebound to really work, but could do ok in flattish gold environment too.

VRNG Update

It's been like watching paint dry, but the stock is spiking on volume with no news as of this moment.  Still waiting for judge to rule.  Yesterday, USPTO affirmed a patent.  I never thought that was much of an issue, but some did.  Still, it all comes down to the judge's ruling, which is well beyond due.  I continue to think that the expected outcome leads to a $5 print and then maybe a pullback into the mid/low 4s.  GOOG will certainly appeal.  If he were to rule a higher royalty rate than the jury originally indicated, the stock has upside....

HUGE short-interest...

Early Action

I am hoping SWI finds its footing near here.  I have lowered my target a bit due to lower EPS and a lower assumed PE now (28 instead of 30). Unfortunately, while I see some support near here, I can't say that this is an overreaction in the short-term.  Hopefully the company reaccelerates its license growth.  It seems like poor execution and a tough economy are not permanent issues, but there may be more to the story.  Lots of target cuts, some into the 30s...

If anyone is short TPX, 36 looks to be a good area to cover.

NEM reported - more later after the call.  Big write-down, lowered capital spending...  

TYPE is a black 5 that missed and guided lower - could pull back to 22-24

OUTR call was crap - hard to say how it will react.  I trimmed and now wish I had moved on.  I didn't like the ecoATM deal and now it looks like Canada is slow to roll out RedBox and the coffee venture (Rubi) isn't going well either.