Wednesday, February 29, 2012

Investopedia: HSBC Still Muddling Through And Still Cheap

Lucky for HSBC (NYSE:HBC) that it's such a globally diversified bank. At present, the company's European and North American operations are adding little to group profits, but Hong Kong remains a cash cow and growth in Asia and Latin America has been quite solid. While institutional investors still seem quite down on this name, and there are definitely risks in emerging markets, patient value investors should be relatively content holding these shares for their long-term potential. (For more, see Earning Forecasts: A Primer.)

Not a Great Close to the Year
Bank earnings are hard to enough to parse and interpret when it's just a small regional bank; a global bank like HSBC is a maze for even experienced investors. All that said, and acknowledging that not all investors agree when it comes to adjustments, HSBC's fourth quarter earnings weren't great.

Read more here:

Seeking Alpha: Despite Setback, BB&T Has Plenty Of Growth Opportunities

The trouble with striking a good bargain is that sometimes it's a little too good to go through. While North Carolina-based BB&T (BBT) thought it had a deal to acquire most of the worthwhile assets of Florida's BankAtlantic (BBX), disaffected investors have successfully persuaded a Delaware judge to block the deal. Whether this deal goes through or not, though, BB&T has plenty of other fish in the sea as this under-rated bank continues to recover and acquire valuable assets.

A Judge Says "No"
BB&T had structured its deal with BankAtlantic along pretty aggressive lines. While the 9% deposit premium that BB&T offered for about $3.3 billion in deposits (and $2.1 billion in good loans) was on par with similar deals, including a deal whereby PNC (PNC) bought 19 branches and $350 million in deposits from BankAtlantic, this deal was basically going to hollow out BankAtlantic and leave it largely a holding company with some stressed/distressed assets.

Continue reading here:
Despite Setback, BB&T Has Plenty Of Growth Opportunities

Investopedia: Wait For Silgan To Get A Little Cheaper

The trouble with consistent performance is that you can't really justify paying a little extra for a stock with the idea that outperformance will redeem that premium over time. Silgan (Nasdaq:SLGN) is definitely one of the best-run packaging companies out there, but it's a stock that pretty much has to be bought right to work out. Consequently, while Silgan is a good name to follow right now, investors new to the name should hold out for a better price before taking the leap.

Business More or Less OK  
Although the fourth quarter highlighted some issues in unit volume growth and margins in the plastics business, business at Silgan is more or less going as expected.

Read more here:

Investopedia: Statoil - Iffy Operations, But Serious Potential Value

There are not many freebies in oil and gas, so if an investor wants to own an E&P company trading at a low valuation, there is a price to be paid in quality. The question with Norway's Statoil (NYSE:STO) is just how much of a discount is really fair. Although Statoil does indeed have issues with its cost structure and reserve base, the company's above-average growth potential and capacity for additional deals argues that the discount today is too steep.

Familiar Problems Show up in Q4  
Statoil's fourth quarter results weren't too surprising to long-term followers of this story. Although production slightly beat expectations, it grew less than 1% overall, as declines in Norwegian production offset better than 25% growth from international projects.

Please read more here:

Seeking Alpha: Chart Industries Running Hot And Cold

It takes time to reorganize a country's energy infrastructure, let alone the world's, but there are nevertheless real signs of progress when it comes to natural gas. While the LNG story is still dominated by large energy companies looking to monetize huge natural gas fields in remote corners of the world, there has been progress towards the use of LNG in place of gasoline or oil in many applications around the world.

As that process continues, the potential for Chart Industries (GTLS) should only improve. That said, while there is a pretty hot future in keeping gas very cold, the company's current financial performance and valuation leave something to be desired.

Read more here:
Chart Industries Running Hot And Cold

Investopedia: Archipelago Learning In Detentino, But Still On Course To Graduate

Offering money-saving solutions for K-12 education is usually a pretty good business plan, but perhaps not so much in those times where state budgets and standards are in flux. While Archipelago Learning (Nasdaq:ARCL) offers attractive cloud-based supplemental education products, the company is seeing business slow a bit, due to those macro factors. While this company certainly carries above-average risk, it also offers above-average potential for risk-tolerant growth investors.

Still Growing, But...  
The recent issue with Archipelago isn't that it's no longer growing, but that its growth rate has declined recently. While the company was posting 30%+ year-on-year growth rates early in 2011, that growth has declined to the point where sell-side analysts expect only single-digit growth for the fourth quarter (to be reported in March).

Please read more here:

Investopedia: Is China Mobile Too Successful To Succeed?

You would think that holding two-thirds of any market in China would be sufficient to keep a stock near the top of many investor's buy lists. That's not the case for China Mobile (NYSE:CHL), though, as investors fret about the impact of regulatory interference in the Chinese mobile market and wonder just how China Mobile will continue to deliver growth as the company gets ever larger.

Share Erosion a Modest Concern  
Although China Mobile still has about two-thirds of the Chinese wireless market, that number has been declining in recent years as Chinese regulations have favored rivals China Unicom (NYSE:CHU) and China Telecom (NYSE:CHA) and allowed these companies to gain momentum.

To read the full piece, follow this link:

Investopedia: CACI Gearing Up For Tougher Times

With about three-quarters of revenue going to the Department of Defense and upwards of 90% of revenue going to various Federal agencies in total, CACI International (NYSE:CACI) would seem to have a lot to lose from years of presumably tighter federal budgets. This "conventional wisdom" may create an opportunity for risk-tolerant investors; this company has been through budgetary ups and downs before, and a combination of quality execution and the potential for mergers and acquisitions (M&A) should help prop up results.

Recent Results Relatively Positive  
Bearish analysts have been calling for a major downturn in growth at CACI for some time, but the company stubbornly refuses to go along with that. In the last quarter, CACI reported 9% organic revenue growth and a nearly full point improvement in operating income. Funded backlog has been declining relative to revenue, though, and that's a reality that cannot be ignored.

Please continue here:

Seeking Alpha: What's It Going To Take To Get Salix Cheap?

For the most part, a company actually missing estimates on an operating basis and significantly increasing estimated expenses for the next year is enough to drive the stock down. Salix Pharmaceuticals (SLXP) is not an ordinary stock, though, and investors seem happy to look past the near-term turbulence in favor of the long-term opportunity in this focused specialty pharmaceutical company.

A Mixed End To The Fiscal Year
To its credit, if there's a good way to miss earnings, Salix pretty much found it. Revenue rose over 30% for the quarter (with sales of lead drug Xifaxan up 29%) and gross margins were flat. That the company exceeded estimates for SG&A spending and missed sell-side analyst estimates for operating income by about 10% was pretty much moot against the 40% overall growth and the ongoing momentum in its class-leading drug.

Read the full article here:
What's It Going To Take To Get Salix Cheap?

Tuesday, February 28, 2012

Investopedia: What Is DryShips Worth With Suffering Shipping Business

Every so often, investors will find valuation anomalies in the market. DryShips (Nasdaq:DRYS) looks like a good example today, as the company's stake in Ocean Rig (Nadsaq:ORIG) is actually worth more than the company's present market capitalization. Although the shipping industry is indeed struggling, and no fast turnaround looks likely, any estimation above zero means the core DryShips operations are undervalued.

A Tough Quarter, As Expected  
Nobody expected a great quarter from DryShips, or at least not insofar as the drybulk and tanker operations were concerned. Net voyage revenue for shipping was down 23%, as the company saw a 4% decline in voyage days and a 20% decline in contract rates. By comparison, the majority-owned Ocean Rig drilling subsidiary saw revenue more than double for the quarter.

Please read more here:

Investopedia: Titan More Than Just Going Along For The Ride

It's good to be a manufacturer of agricultural, construction, and/or mining equipment today. Not surprisingly, it's also good to be a manufacturer of the parts and components that these OEMs need to build their machines. With major share of the North American off-highway wheel market and growing opportunities overseas and in follow-on markets like mining, Titan International (NYSE:TWI) may not be a giant, but the growth it's delivering to shareholders is hardly lilliputian.

Closing the Year on a Roll  
Titan reported 73% revenue growth to end its fiscal year, boosted in part by the acquisition of Goodyear's (NYSE:GT) Latin Am farm tire business, but also by strong overall demand. Agriculture sales rose 39% this quarter, while earthmoving/construction sales jumped 59%. Consumer sales were also a strong contributor to this quarter's total, with year-on-year comparisons being of negligible value.

Please continue here:

Seeking Alpha: Tower Group's Earnings - See The Value, Hope For The Execution?

There's a fine line between patient and stubborn, and I fear I'm inching near the wrong side when it comes to Tower Group (TWGP). Although this small and under-followed insurance company has a great deal of potential value lurking within, management seems hard-pressed to unearth it and financial performance has been shaky.

A Mixed Bag In Q4
Given the recent disappointments, there's some relief in Tower Group's fourth quarter earnings. Although gross written premiums were flat and below most expectations, organic growth was 6% on a better than 2% increase in premiums and an 88% retention rate. Likewise, net premiums written were down 1% from last year.

Read more here:
Tower Group's Earnings: See The Value, Hope For The Execution?

Investopedia: Marvell Seems Cheap But Long-Term Growth May Be A Concern

With the worst of the hard drive market disruptions behind it, Marvell Technology (Nasdaq:MRVL) should be looking at much easier comps and better growth in 2012. While the stock does look somewhat undervalued amongst its semiconductor peers, investors may want to give some thought to the company's long-run growth prospects when deciding whether this is a good trade or a long-term holding.

A Weak End to a Challenging Year  
With supply issues in hard drives messing up the storage market and inventory run-downs in the Chinese wireless market, this was not going to be a strong quarter for Marvell. Revenue fell 22% on a sequential basis, as surprisingly strong networking results (down 1%) made relatively little difference against a 21% decline in mobile/wireless and a 31% decline in storage. That said, none of this was really surprising.

Please click the link for more:

Investopedia: Citizens Republic On The Road Back

When you realize that Citizens Republic Bancorp (Nasdaq:CRBC) is heavily exposed to Michigan, heavily exposed to non-mortgage consumer and commercial lending, and holds relatively low interest-free deposits, it's not so surprising that the company was in dire shape not so long ago. As the Michigan economy recovers and this bank transitions from survival to growth, though, this bank may have yet more to offer.

Strong in a Tough Neighborhood 
Citizens Republic is a fairly typical regional bank, with a large business in its home market (Michigan) and a smaller presence in neighboring states like Wisconsin and Ohio. About 10% of Citizens Republic's offices/branches are in Ohio, and the bank holds a 0.4% deposit share in the state. Wisconsin is home to about 20% of the branches and the market share is 0.9% - good enough for number 12 in the state.

Read more at this link:

Investopedia: Molycorp Setting Up A Second Chance

Almost every stock will give the patient investor a second chance, and now may be that time for investors looking to get exposure to the rare earth metal space. Severe Chinese export controls have led to demand destruction (mostly through accelerated substitution and recycling) and prices have plunged. While a tough pricing environment does no favors to Molycorp (NYSE:MCP), the quality of this American miner merits a second look at today's prices.

Few Surprises to Close the Year  
For all of the rare earth metal pricing drama, Molycorp's fourth quarter went more or less as expected. Revenue dropped 4% sequentially as strong volume growth (237% in cerium products) was offset by a nearly 50% quarter-to-quarter price cut.

Read the complete article here:

Investopedia: HanesBrands May Soon Start Stretching Out Its Free Cash Flow

Innerware manufacturer HanesBrands (NYSE:HBI) has to contend with fierce competition, powerful retailers, and a balance sheet that is far less than ideal. Although apparel manufacturing is going to remain a tough business for the foreseeable future and HanesBrands doesn't look cheap by conventional metrics, investors who look no further than the P/E or EV/EBITDA ratios may miss an interesting free cash flow expansion story in its early stages.

A Tough Quarter  
For a variety of reasons, HanesBrands delivered another poor quarter. Sales were slightly negative, as the company had to deal with retailers clearing out cold weather inventories, aggressive competition in graphic tees and some turbulence with Wal-Mart (NYSE:WMT). At the same time, higher cotton prices thumped margins (gross margin down more than a point) and operating income fell about 8%.

Please click here for more:

Seeking Alpha: AES - Above Average Growth, An Improving Balance Sheet, Higher Dividends

It has taken a number of years, but global electrical utility AES Corp. (AES) finally seems to have a plan in place that can drive reasonable returns for shareholders. While commodity costs and forex represent some challenges for the near term, AES has a good long-term plan in place with respect to driving out costs, focusing on high-potential growth markets, and seeing cash go back to shareholders.

Minimal Surprises In The Fourth Quarter
AES offered relatively few surprises for the fourth quarter. Revenue rose about 1% as reported, with the company's Latin American operations representing about two-thirds of the revenue base. Profitability was better, though, as GAAP gross margin, adjusted gross margin, and proportional gross margin all showed solid progress.

Read the full piece here:
AES: Above Average Growth, An Improving Balance Sheet, Higher Dividends

Monday, February 27, 2012

Seeking Alpha: Do Boeing Investors Need To Worry About The Order Book?

Commercial aerospace has moved from a state where investors worried about whether orders would materialize to worrying about the profitability and delivery timelines for those orders. More recently, though, the CEO of a major aircraft leasing company has sounded a warning that aircraft order rates may be unsustainable and suggested that the rich order books at Boeing (BA) and Airbus may end up being something of a mirage.

Warnings From Someone Who Ought To Know
Late in February, Aengus Kelly, the CEO of AerCap Holdings (AER), warned in an interview that the order books at Boeing and Airbus may never be fully realized. For those not familiar with AerCap, it's the third-largest aircraft lessor in the world and presently the largest publicly-traded lessor.

Please click here for the full piece:
Do Boeing Investors Need To Worry About The Order Book?

Investopedia: HealthStream Already In The Rapids

Figure out a way to automate and simplify a mundane (and non-core) task and you have a good shot at creating a successful business. In the case of HealthStream (Nasdaq:HSTM), this small healthcare IT firm gives hospitals an option for training employees that is less costly and less cumbersome, but keeps them in compliance with an ever-changing set of rules and regulations. While HealthStream is hardly undervalued, growth investors may like what they find here.

A Good End to the Year

HealthStream did really blow the doors off with its earnings relative to prior expectations, but it was still a strong quarter and Wall Street definitely liked what it heard. Revenue rose 24% for the quarter, with revenue from the Learning business up 31% and revenue from Research up 9% on a 15% increase in patient discharge surveys.

Read the full article here:

Investopedia: Is Basic Energy Services An Overlooked Stock?

Although oil prices are back in the triple digits, energy investors are not exactly resting easy these days. Not only are investors worried about the extent to which E&P and service companies can shift from gas to oil, but also the potential impact of higher costs on forward margins and returns. While Basic Energy Services (NYSE:BAS) is not a perfect company, it seems to be trading too cheaply relative to its business prospects and financials.

Sluggish Performance to Close the Year  
To be sure, Basic Energy did not make the best case that it's a must-own stock on the basis of its fourth quarter performance. Revenue was up just 2% on a sequential basis, coming in as analysts expected, but offering less domestic growth (and BAS is a U.S.-only story) than major energy service companies like Halliburton (NYSE:HAL), Baker Hughes (NYSE:BHI) and Weatherford (NYSE:WFT). (For related reading, see Peak Oil: What To Do When The Wells Run Dry.)

Click the link for more:

Seeking Alpha: Endo Pharmaceuticals Playing An Unconventional Hand

Although many well-known medical device franchises can trace their roots back to Big Pharma, most of those companies jettisoned their device companies in a wave of divestitures in the 1980's and 90's. More recently, Abbott Labs (ABT) has decided to separate its drug and device businesses, while pressure mounts for Medtronic (MDT) to ponder splitting its slow-growth and high-growth businesses.

So of course Endo Pharmaceuticals (ENDP), once a specialist in pain and urology drugs, decides to buy some slow-growth device businesses and build itself into a triple-threat of drugs, devices, and generics. While the company did take on quite a lot of debt to restructure itself, time may prove that diversification was the right move.

Please click here for the full article:
Endo Pharmaceuticals Playing An Unconventional Hand

Investopedia: The Wild Ride Continues For OmniVision Technologies

For those investors who bought into the worst of the OmniVision (Nasdaq:OVTI) news in late November, I salute your bravery. I was definitely tempted to take a flier on this stock, but chose not to and missed out on the subsequent 80% jump in the shares. As this most recent quarter demonstrates, though, conditions remain volatile and murky for this imaging sensor company.

A Surprising (Partial) Rebound   
OmniVision warned investors a little while ago that financial performance was going to be down as the company worked through lower demand and higher inventory. That said, the company managed to deliver better performance than it had expected.

Please click here for more:

Investopedia: Analog Devices Gearing Up For The Rebound

There was ample investor enthusiasm for semiconductor stocks to start the year, but that love has cooled a bit lately. While Analog Devices' (NYSE:ADI) slightly cautious guidance on the next quarter may spook some investors, there's a more important story to keep in mind. Analog Devices has shown remarkable margin preservation through this latest downturn, and the company may be in place to deliver some truly incredible gross margins once orders and utilizations have come back up to speed.

A Somewhat Wobbly Quarter  
Analog Devices delivered results around the low end of its prior guidance range. Revenue dropped 10% on a sequential basis and a similar amount on a year-over-year basis. Consumer spending was especially weak (down 21%) and wireless was quite soft as well (down 13%). While industrial was still negative (down 3%), auto was positive (up 6%).

Follow this link to the full piece:

Investopedia: Rio Tinto Too Iron-Heavy, But Undervalued

Stocks, in general, seem to be doing well as investors feel more comfortable not only with the sovereign debt problems of Europe, but the overall global growth outlook for 2012. Curiously, mining stocks don't seem to be sucking up as much of the love as their leverage to global growth might suggest they should. With that in mind, investors who believe in a strong 2012 may want to consider adding Rio Tinto (NYSE:RIO) at these levels. (For more, see Earning Forecasts: A Primer.)

Earnings All About Iron  
Earlier in February 2012, Rio Tinto announced mostly solid results for the 2011 fiscal year. Full-year revenue rose about 7%, while underlying EBTIDA climbed about 10%. Although investors were a little disappointed that the company did not announce an increased share repurchase program, the company did boost the dividend by about one-third.

Please continue here:

Investopedia: Weatherford's Tax Issues Shouldn't Obscure A Good Story

Energy services provider Weatherford (NYSE:WFT) can try investor's patience a fair bit. Not only does the company have a below-average record within the industry in terms of returns on capital, this is a story where the words "it's always something" seems to especially resonate. That said, the company's overseas leverage is appealing, as is the company's weighting towards oil-heavy services, and the valuation is compelling.

Not Many Operational Surprises in the Fourth Quarter  
Weatherford reported "preliminary" fourth quarter results that included 10% sequential revenue growth, with 15% growth overseas and 5% growth in North America. Although Weatherford's domestic growth was fairly consistent with the Big Three ((Schlumberger (NYSE:SLB), Halliburton (NYSE:HAL), and Baker Hughes (NYSE:BHI)), the international growth here was pretty solid - especially in Latin America (up 23% sequentially).

Read the full article here:

Investopedia: Cozying Up To Kraft

Familiar themes continue to dominate the packaged food space. Volume is weak across the board as bargain-priced private label brands grab share, but emerging markets remain an attractive source of growth. With some of the strongest brands in packaged food and the best overseas exposure of its American peers, Kraft (NYSE:KFT) seems to be separating itself from the pack a bit.

Results in Line with Prior Announcement  
Kraft made an early announcement of the highlights of its fourth quarter earnings, so the formal announcement on Feb. 21, 2012 held relatively few surprises. Revenue rose about 7% as reported, with organic growth coming in at a strong 6%. North America was surprisingly strong with 7% organic growth, while developing market growth was up a similar amount. Europe was the laggard, but still positive at 3% organic growth.

Please click here to read more:

Investopedia: Eni Hoping To Be An African Queen

Much like its home country, Italian energy Eni (NYSE:E) needs to rethink its approach and restructure its operations. While the company has a valuable growth-oriented exploration and production business (centered on Africa), overall performance has been held back by a collection of structurally uncompetitive downstream operations. While valuation is close to attractive, Eni is a stock that will need some time to work out.

A Tough 2011 Breaks a Strong Streak  
Eni had built a reputation as a fairly reliable under-promise/over-deliver company that routinely delivered results slightly above expectations. Although that technically continued in the fourth quarter as adjusted income was 3% above expectations, it was a low-quality beat and underlying results actually missed most sell-side estimates by about 5%.

Read more here:

Friday, February 24, 2012

Seeking Alpha: Vivus's Qnexa And Its Potential Value

Vivus's (VVUS) chances of getting FDA approval for Qnexa, its investigational drug combination for obesity, have never looked better. To suggest that the process has been difficult would be to say that War and Peace is a little wordy or that Michael Jordan could play a little ball.

Nevertheless, a surprisingly positive panel vote has investors excited that the FDA very well may approve the first prescription drug for obesity in over a decade. The question investors may want to ask then, aside from what the chances are that the FDA goes along with its panel, is how much appreciation potential may be left in the shares.

Please read the full piece here:
Vivus's Qnexa And Its Potential Value

Investopedia: Can Ternium Regain Its Good Name?

What a difference one deal can make. The management of Ternium (NYSE:TX) had been considered one of the best in the Latin American steel sector, and the company was generally well thought of with its mix of cost integration in Mexico and near-monopoly in Argentina. Recently, though, the company paid a huge premium to take a major position in a Brazilian steel company and analysts have put the company in the penalty box as a result.

Familiar Conditions in Core Markets  
The global slowdown in the steel market has not been helping Ternium sentiment lately. As Mexico's economy is so tied to the U.S., conditions in the U.S. seem to inevitably spill over into Mexico and this has been true for the steel market as well. Argentina, too, has seen some sequential slowing in shipments and pricing - a trend repeated broadly through the world.

To read more, follow this link:

Investopedia: Popular An Interesting Risk-Reward Trade

With signs of life in lending and ongoing improvements in credit, a lot of the big discounts in well-known banks have shrunk significantly. There's still a leading banking franchise that trades at a major discount - Puerto Rico's Popular (Nasdaq:BPOP). While this bank still needs to pay off its TARP funds and recent results are hardly extraordinary, the discount to value here looks large enough to be worth a longer look.

Strong at Home  
Popular has long been the largest retail bank in Puerto Rico and the credit problems of recent years have only increased that lead. Popular has as many branches open in PR as the next four competitors combined, and holds more than 40% of deposits in Puerto Rico.

Please follow this link:

Investopedia: Wal-Mart Rolls On

A company as immense as Wal-Mart (NYSE:WMT) is not going to show a great deal of turbulence from quarter to quarter, but there's nothing wrong with steady growth and stepwise execution of a solid business plan. To that end, Wal-Mart shareholders have little to worry about, as management continues to balance an overseas growth strategy with a domestic operating efficiency plan. Although Wal-Mart is not especially cheap, it likely remains a reasonably good conservative play on consumer spending in the United States, tinged with some international growth.

Basically Solid Fiscal Fourth Quarter Results
Wal-Mart didn't deliver too many surprises in its fiscal fourth quarter, and investors basically have to go to the right of the decimal points to find much deviation from expectation.

Please continue here:

Seeking Alpha: Volcano Still Searching For The Sweet Spot

It's not often that you find a medical technology story where almost everybody agrees that product/technology in question improves outcomes and reduces costs over the long term, but few people want to use it anyway. That is, and has always been, the story with Volcano (VOLC) as this mid-cap imaging story tries to drive broader adoption of intravascular ultrasound (IVUS) and fractional flow reserve (FFR) products in the U.S. and Europe.

Q4 Results Show Ongoing Share Growth
The immediate takeaway from the Volcano fourth quarter is that it was a disappointment; management previously announced that sales were going to come in short of expectations and I believe this marked the first such disappointment in its public history. Looking closer, though, there were actually a lot of positives to take from the quarter.

Read more here:
Volcano Still Searching For The Sweet Spot

Thursday, February 23, 2012

Investopedia: Can K-Swiss Stop The Bleeding?

The footwear industry is brutally competitive, and it looks like K-Swiss (Nasdaq:KSWS) is well on its way to being one of those cautionary tales. Although K-Swiss technically broke a five year streak of year-on-year revenue declines, free cash flow has declined six years running and the company's ongoing survival is no sure thing. While a hit product could turn things around relatively quickly, K-Swiss is starting to look like a longer and longer shot with each quarter.

A Fairly Lousy Fourth Quarter  
Although K-Swiss did report 18% revenue growth for the fourth quarter (against expectations of a 3% drop), that surprising jump in sales did the company little good. Domestic sales rose more than 10% and international sales jumped almost 24%, but profitability was a major issue.

Read the full article here:

Investopedia: Is Santander Worth Your Time?

Much of the European banking system seems mired in trouble and there are signs that emerging markets like Brazil are starting to show cracks as well. That is troubling news for Banco Santander (NYSE:STD), as this global bank has been counting on strong results in emerging markets like Brazil and Mexico to prop up and offset its troubled operations in Europe and the U.K.

Nothing Changing Very Fast  
Recent results from Santander were largely in line with expectations and recent trends. Operating expenses are tracking higher and there is some loan growth, but provisioning and credit losses in Europe remain a major problem. Worse still, the banking issues have spilled over into the broader economies, and it seems to be slowing business prospects overall.

Please click here for more:

Seeking Alpha: NuVasive Has Been Bloodied, But The Growth Story Isn't Broken

These have not been the easiest of times for small-cap orthopedics company NuVasive (NUVA). Not only has the company gotten caught up in the generalize spine market malaise, but the company's litigation with Medtronic (MDT) has been a significant overhand for some time. With solid share in minimally invasive procedures and meaningful new products on the horizon, NuVasive looks like an interesting rebound play at today's prices.

Relatively Speaking, A Good Quarter
Although analysts have been trimming numbers on NuVasive, the company still delivered pretty solid results for its fiscal fourth quarter. Revenue rose about 16% on a reported basis, with underlying organic growth in the range of 8-9%. Overseas sales grew at a torrid 53% clip, albeit off a low base, while biologics sales were unimpressive (down 1%).

Click here to read the full piece:
NuVasive Has Been Bloodied, But The Growth Story Isn't Broken

Wednesday, February 22, 2012

Seeking Alpha: Can Altra Holdings Become A Clutch Performer?

Not only do I like industrial companies in general, but small industrial companies are near and dear to my heart. Played right, they can be surprisingly lucrative stock picks with much less of the risk that often goes with small technology or healthcare names.

The question for this article, then, is whether Altra Holdings (AIMC) merits a spot in the portfolio of growth-inclined investors.

An Annoying Reset To End The Year
The Altra Holdings case doesn't start off especially strong, as though revenue rose 11% organically in the fourth quarter, the company missed earnings estimates by a significant margin.

Read the full article here:
Can Altra Holdings Become A Clutch Performer?

Investopedia: Costs Keep The Squeeze On Heinz

There are good companies and good stocks and they don't always (or even necessarily often) go together. While the pressures affecting HJ Heinz (NYSE:HNZ) today do not diminish it as a quality food company over the long-term, they do create near-term issues of value and momentum. Unless and until Heinz can prove that it can better surmount cost inflation, these shares remain a stretch on valuation.

Third Quarter Results Not as Good as They Seem 
Although Heinz beat on the top and bottom lines, the quality of the latter was not very good. Revenue rose more than 7% this quarter and organic growth (volume + price) of more than 4% was legitimately good in the present environment. The top brands did even better (up 6% organically), while emerging markets continue to be a major growth driver.

Click the link for the full article:

Investopedia: Familiar Worries At Campbell Soup

These are hardly the best of times for most food companies. Branded food is never a market with high overall volume growth in the best of times, and now price-conscious consumers are making sure that any significant pricing action has real volume consequences. At the same time, price inflation seems nearly unrelenting.

That limits just how much Campbell Soup (NYSE:CPB) can do with its own strategy. At the same time, it's a bit curious that a company that arguably has margin to spare is willing to trade growth to preserve those leading margins.

Read more here:

Seeking Alpha: J&J CEO Switch A Necessary Step Forward

For a few weeks I have been mulling a "How To Fix Johnson & Johnson" column, but events at this healthcare giant have already taken my number one item off the list. Johnson & Johnson (JNJ) announced Tuesday evening that CEO Bill Weldon will be stepping down in April and handing the reins to Alex Gorsky. While this move is more of a transition than a revolution, it may well be the turning point in this underperforming giant's fortunes.

A Not-So-Fond Farewell
Perhaps the stock market is not always the most impartial assessor of management skill or quality, but it is an inescapable fact that JNJ's stock lagged the market since Weldon became CEO in 2002. What investors may not appreciate, though, is that while JNJ's stock was fairly stagnant over that time (up around 10%), the stock outperformed those of Medtronic (MDT) and Abbott Labs (ABT). That said, returns on equity have been trending down and did fall below 20% during his time as CEO.

Please click here for more:
J&J CEO Switch Is A Necessary Step Forward

Seeking Alpha: Mylan Looks To Reap A Harvest Of Patent Expirations

In a world where doing a little bit of everything has become popular among drug companies, Mylan (MYL) has stuck to its guns. Unlike Teva (TEVA) and Sandoz (part of Novartis (NVS)), Mylan really is just about generic drugs and the opportunity to leverage one of the largest global franchises in that segment of the drug market. At the bottom line, Mylan is an interesting investment prospect, but really needs to deliver more to be a top choice.

Ending The Year In Line
Mylan did not offer a lot of surprises to close this fiscal year. Revenue rose about 7%, with generics up about 5% overall and the small (less than 10%) specialty business up almost 38%. The generics business was definitely a haves-and-have-not situation this quarter, as the North American business grew almost 13% on good volumes and strong pricing, while the European business saw revenue drop 12% on weak pricing.

Please click the link for the full piece:
Mylan Looks To Reap A Harvest Of Patent Expirations

Investopedia: NetApp Puts Some Fears To Rest

The outlook for enterprise IT in 2012 is still uncertain, but one thing that does seem more certain is that the demand for enterprise data storage capacity is only going to increase. While data gets more crowded, NetApp (Nasdaq:NTAP) has established itself as a strong and solid No. 2 player in this growth market and investors can still count this as a name worthy of consideration.

Third Quarter Broadly In Line  
NetApp's financial results for its fiscal third quarter were broadly in line with analyst expectations. Revenue rose 21% as reported, with sequential growth of 4% and year-over-year organic growth of 5%. While the United States public sector revenue was down 7%, U.S. enterprise was up 30%.

Read the full piece here:

Tuesday, February 21, 2012

Investopedia: Pringles Is A Big Bite For Kellogg

Give credit where due; Procter & Gamble (NYSE:PG) lost no time moping about the disintegration of its deal with Diamond Foods (Nasdaq:DMND) to sell its Pringles business in a complicated $2.4 billion. In short order, P&G found a willing buyer and will be selling this iconic potato chip business to Kellogg (NYSE:K) for about $2.7 billion in cash.

The Terms of the Deal  
Unlike the convoluted reverse Morris Trust structure that Diamond and Procter & Gamble were going to use to save taxes for P&G, the Kellogg deal is much more straightforward. Kellogg will pay $2.7 billion in cash - actually a bit of a discount to what Kellogg would have had to pay to match the after-tax price that Diamond was originally offering.

To read more, click here:

Investopedia: If You Believe In A Construction Revival, Consider Terex

Last year was brutal for crane and construction machinery manufacturer Terex (NYSE:TEX), but the company may not be getting enough credit for some of its strategic moves. The acquisition of Demag will make Terex a more diverse business (operationally and geographically), while signs of life in construction could fuel a return to decent margins and returns.

A More Constructive Fourth Quarter
Looking at a range of companies like Caterpillar (NYSE:CAT), Manitowoc (NYSE:MTW), and Deere (NYSE:DE), it's pretty clear that construction spending was solid on a global basis in the fourth quarter. Terex went along for the ride with reported sales growth of nearly 48% (and almost 20% excluding the acquisition of Demag).

Please continue here:

Investopedia: Applied Materials A Long-Term Play In A Short-Term Market

Leading semiconductor equipment company Applied Materials (Nasdaq:AMAT) posted stronger than expected revenue and raised guidance for fiscal 2012. So, it's off to the races, right? Not exactly. While conditions do seem to be getting better in the equipment world, analysts remain very skeptical about the persistence of this recovery and expectations for the company are all over the map. Although its valuation looks too low for the full cycle, the short-term world of Wall Street couldn't care less about more than one quarter.

Less Bad Is Better
Applied Materials didn't have a strong quarter, but it was less rotten than many analysts feared. Revenue fell 19% from last year and was up very slightly on a sequential basis as reported. Stripping out the Varian acquisition, sales would have been down about 9% sequentially.

Please read the full piece here:

Investopedia: Vale Still All About China

In some respects, Brazilian iron giant Vale (NYSE:VALE) should be sitting pretty. After all, it controls huge iron ore reserves, has a pretty compelling cost structure and has successfully grown a non-ferrous business centered around nickel and copper.

On the other hand, there's just not enough demand from the Brazilian steel industry to change the fact that Vale rises and falls with Chinese demand. Making matters worse, the Brazilian government has not been shy about influencing (some might say "interfering") the company's internal operations. Although Vale's valuation is not really that extreme today, investors need to appreciate the risks that go with this name. (For more, see Earning Forecasts: A Primer.)

To read more, click this link:

Seeking Alpha: Medtronic's Growth Problems Still Front And Center

Another quarter goes in the books and Medtronic (MDT) investors are still waiting to see some real signs of life when it comes to re-igniting top line growth. Although nobody questions Medtronic's ability to maintain leadership positions in many large med-tech markets, there are ample questions as to whether the company can translate this leadership into growth. Current conditions being what they are, investors have to put a lot more of their hopes on future product and market developments to make this stock look appealing today.

A Disappointing Fiscal Third Quarter
To be fair, Medtronic's "disappointment" relative to expectations was not that bad in an absolute sense. More problematic, though, is how it undermines the idea that 2012 conditions will get significantly better in some core markets.

Read more here:
Medtronic's Growth Problems Still Front And Center

Seeking Alpha: Can Much-Maligned Mechel Outperform?

Although the rally in steel stocks has cooled in February, investors are still generally optimistic on the outlook for domestic names like Steel Dynamics (STLD) and Nucor (NUE), as well as global plays like ArcelorMittal (MT). That enthusiasm has not extended out to Russia's Mechel (MTL) to the same degree, as analysts are concerned not only about the company's higher-cost steel operations, but also its over-leveraged balance sheet and its unimpressive history of organic growth.

Can Integration Pay Off?
As the largest producer of coking coal in Russia (with well over 20% share), and a large iron ore miner as well, Mechel is well-covered for its own steel needs, and it's the second-largest long steel maker in Russia (behind Evraz). Unfortunately, this level of internal integration hasn't necessarily always paid off for shareholders.

Please read the full story here:
Can Much-Maligned Mechel Outperform?

Seeking Alpha: Spectranetics Still Searching For Traction In Peripheral

After so many years, it's interesting to see that there are still a few sell-side analysts willing to stick their heads out and support Spectranetics (SPNC). More than 25 years into its life as a medical device company, Spectranetics has yet to really carve out much more than niche applications for its laser ablation products. While the company may at last be in place to deliver some meaningful cash flow leverage, it looks like valuation is already ahead of the story.

Double-Digit Growth In Q4
Spectranetics delivered 11% growth in the fourth quarter, with 12% growth in its lead management business and 13% growth in its vascular business. Sales of disposables rose more than 12%, and the company placed an additional 8 laser units in the field (taking the total north of 1,000). To be fair, that's quite a good result when compared to other peripheral vascular companies like Bard (BCR), Covidien (COV), and Cardiovascular Solutions (CSII). 

Please continue here:
Spectranetics Still Searching For Traction In Peripheral

Seeking Alpha: ABB - Deja Vu All Over Again

Swiss industrial conglomerate ABB (ABB) has an oddly bipolar record when it comes to its financial reports. Where most companies tend to report streaks of better than expected (or worse than expected) numbers, with ABB it's always a toss-up from quarter to quarter. Although ABB did not end the fourth quarter on a uniformly positive note, the company still looks like an interesting name for the year ahead.

Better Orders, But The Past Intrude
ABB announced that revenue rose 16% in local currencies for the fourth quarter, with organic growth coming in at an impressive 10%. That's remarkably better performance than competitors like Siemens (SI), Emerson (EMR), and Rockwell Automation (ROK), and only Eaton (ETN) and General Electric (GE) showed markedly better performance in overlapping segments.

Read more here:
ABB: Deja Vu All Over Again

Sunday, February 19, 2012

Updated Idea List

At long last the idea list is more or less fully updated.
I'm going to try to refresh this every month from here on...

Seeking Alpha: Commercial Vehicle Closer To Cruising Speed

It's been a rough road for Commercial Vehicle Group (CVGI) in recent years, but even as commercial vehicle production wobbled in late 2011, this parts and components company has been making solid strides. Not only has CVGI made real progress with its margin structure and balance sheet, but the company has taken meaningful strides to expand its emerging markets business and attach itself to strong names like Cummins (CMI) and Deere (DE).

Surprising Strength In Q4
At $226 million in revenue, CVGI exceeded analyst expectations. While "analyst expectations" is all of two analysts in this case, 43% year-on-year and 4% sequential growth is a solid result all the same - particularly given underlying unit volume in commercial trucks and off-road vehicles.

Click here for the full article:
Commercial Vehicle Closer To Cruising Speed

Friday, February 17, 2012

Seeking Alpha: Steady As She Goes At Portfolio Recovery Associates

When it comes to buying charged-off debts and then trying to collect them, surprises are seldom ever a good thing. So it's probably just as well that Portfolio Recovery Associates (PRAA) offered few surprises this quarter. This company is always going to be controversial - the accounting is confusing for those unaccustomed to it, the IRS is investigating the company's tax calculation policies, there's more regulation and oversight coming, and it's an inherently difficult thing to collect on debt.

All of that said, PRAA is one of the best at what it does and there's more than enough room for the company to continue growing.

To read the full piece, click here:
Steady As She Goes At Portfolio Recovery Associates

Investopedia: A Pause In Electronic Test Gives Investors Another Chance With Agilent

It is impossible to follow every good stock out there and missing good opportunities is just part and parcel of being an investor. That said, investors should always be on the lookout for a second crack at good companies. With Agilent (NYSE:A) suffering a bit from a temporary slowdown in telecom infrastructure equipment, investors may have the opportunity again to buy shares in an excellent company at an appealing price.

Fiscal First Quarter Results a Bit Disappointing  
For the most part, Agilent had a good quarter but it seems more likely that the Street is going to focus most of its attention on what didn't go so well. Revenue was up about 7% as reported and more than 6% on an organic basis - below the low end of management's prior guidance range.

Read the complete piece here:

Seeking Alpha: Gilead's ELECTRON Data Brings Some Reality Back To The Hep C Market

Nothing good lasts forever and it looks like Gilead (GILD) has brought a little dose of reality back to the Hepatitis C market. While Hepatitis C plays like Pharmasset (acquired by Gilead), Idenix (IDIX), Achillion (ACHN), and Inhibitex (acquired by Bristol-Myers (BMY)) were white-hot throughout much of 2011 on investor enthusiasm for a new generation of drugs that hold promise for very nearly curing the disease, some disappointing data in a small study shows there's no perfect drug yet.

A Disappointing Result In A Tough Crowd
Gilead announced that a Phase II study of GS-7977 (the start drug acquired in the Pharmasset deal) and ribavirin failed to show efficacy in treating so-called non-responders (that is, HCV patients who have shown insufficient response to prior therapy). In fact, within 4 weeks of stopping treatment three-quarters of the patients (6 of 8) showed significant relapse and higher viral loads.

Please read more here:
Gilead's Electron Data Brings Some Reality Back To The Hep C Market

Thursday, February 16, 2012

Investopedia: TAL International One Of The Few Positive Shipping Stories

The shipping industry is full of misery these days, what with rates for tankers and bulk cargo carriers so low and numerous shipping companies finding their liquidity situation tightening badly. Container leasing a different matter entirely, though, and TAL International (NYSE:TAL) continues to build solid value for its investors.

A Respectable Fourth Quarter  
Most of TAL International's fourth quarter numbers were solid. Leasing revenue rose more than 31% from the year-ago period as leasing rates for containers have stayed quite healthy. Better still, TAL isn't frittering away this demand - adjusted EBITDA rose nearly 34%, while adjusted pre-tax income climbed more than 44%.

Continue to the full article:

Investopedia: Rackspace Has Already Racked Up A Demanding Valuation

Server hoster and cloud computing play Rackspace (NYSE:RAX) is a straightforward play on two of the biggest trends in IT today - cloud computing and big data. Unfortunately, the company has a valuation to match and it's joined the ranks of hot tech stocks. The question, then, is whether the company's service-oriented model can keep fostering the sort of growth it will take to not only stay ahead of rivals like Amazon (Nasdaq:AMZN) and Google (Nasdaq:GOOG), but to maintain those lofty premiums.

Really Nothing to Disappoint in Q4  
To its credit, Rackspace did everything it needed to do in Q4 and then some. Revenue rose 32% when compared to last year and about 7% when compared to the third quarter. The monthly installed base rose a bit more than 1%, while the average per-user revenue rose more than 7%. The company's cloud services revenue rose 86% from last year.

Read the full article here:

Seeking Alpha: Dentsply - A Great Stock, But Not A Great Price

Dental care has held up better than most analysts expected, and Dentsply's (XRAY) to decision to continue investing in the business during the worst of the downturn should put it in place to gain even more share. That said, the stock's relative outperformance has left it a little expensive when compared to the larger med-tech universe.

A Confusing Q4
Dentsply's financial press releases are never what you might call a vault of information, and this is a company where shareholders should definitely make a point of listening to the conference call or reading the transcript. That said, even with the supplementary information, this was a complicated quarter.

Please continue here:
Dentsply: A Great Stock, But Not A Great Price

Seeking Alpha: Grupo Elektra Copies First Cash Financial Model - Backwards

I found it curious to wake up this morning to news that Mexico's Grupo Elektra (GLEKY.PK), a Mexican retail and financial services conglomerate, was acquiring American payday lender Advance America (AEA) for $780 million in cash. While it represents virtually no threat at all to First Cash Financial (FCFS), it's an interesting twist on the two companies' growth strategies.

A Familiar Story, Told Backwards
First Cash built a solid pawn shop business in the U.S. by catering to consumers who largely operated outside the traditional banking and credit channels (whether by choice or otherwise). The company then found a new leg to its growth by expanding its pawn shop operations to Mexico - a country that is remarkably more "under-banked" than the U.S. Through a combination of torrid new store building and solid same-store sales growth, Mexico has grown to over half of the company's business and more than half of its growth.

Read the full article here:
Grupo Elektra Copies First Cash Financial Model - Backwards

Investopedia: MetLife Seems Seriously Underestimated

Even accepting that the credit crunch and recession changed a lot of views on just how strong even the best financial institutions actually are, it seems like MetLife (NYSE:MET) still carries too much doubt and skepticism with it. Granted, regulatory burden and low interest rates are certainly near-term challenges, but patient investors could reap outsized gains if and when MetLife can return to more normal performance.

Pretty Solid Fourth Quarter Results  
MetLife delivered a good end to the fiscal year. At the bottom-most of bottom lines, operating earnings came in at $1.31; not only up 15% from last year, but comfortably ahead of an average expectation of 1.24.

Read the full article here:

Investopedia: Can Arch Capital Keep Pulling Rabbits Out Of Its Hat?

Years of superior performance have established quite a reputation for the management of Arch Capital (Nasdaq:ACGL). In good times and bad, this seems to be one of the best-run Bermuda-based insurance companies. The question investors have to ask, though, is whether there is enough leeway in the present valuation to really make this one of the best-performing stocks out there over the coming year or two.

Fourth Quarter Results  
Arch Capital reported that gross written premiums rose more than 5% for the fourth quarter, with particular strength (up 17%) in reinsurance. Net written premium growth was a little stronger, coming in at nearly 6%, while net investment income was down 11%.

Read the full article here:

Investopedia: Weight Watchers - Yo-Yo Performance And Debt Gluttony

The combination of an asset-light business model and a strong brand can be tremendously powerful, and Weight Watchers (NYSE:WTW) clearly has the sort of returns on capital that bespeak a quality business. Unfortunately, operational stability has proven elusive and the company's decision to launch a large buyback is going to stretch an already stressed balance sheet even further. (For related reading, see A Breakdown Of Stock Buybacks.) 

A Slightly Soft Fourth Quarter  
Although Weight Watchers' reported fourth quarter results were OK, they were not as strong as the sell-side projected. Sales grew almost 13%, but were a a bit shy of expectations despite being around a 60% jump in online revenue. Total paid weeks did climb nearly 34%, though, and North America's meeting revenue rose about 8%.

Please click here for more:

Wednesday, February 15, 2012

Investopedia: Can EnergySolutions Drive Value From Scarce Assets?

Usually, scarcity means value in the equity markets. Unfortunately, anything relating to the nuclear power sector in the U.S. is colored with risk and uncertainty, and small engineering services firm EnergySolutions (NYSE:ES) has had trouble leveraging its expertise and assets in nuclear decommissioning. Although budgets and schedules are likely to remain uncertain for the foreseeable future, it would seem that the valuation on this stock has factored in quite a lot of bad news already.

Ahead of Schedule and Under Budget  
The biggest project at present for EnergySolutions is the decommissioning of Exelon's (NYSE:EXC) Zion plant. Although there were fears that the early margins on this project would be weak, overall results have not been bad at all so far. More to the point, as of early 2012, it looks like this project is on target or better, and the company is working to renegotiate a cumbersome letter of credit. (For related reading, see Analyzing Operating Margins.)

Please click here for more:

Seeking Alpha: Quest Software - So Far, So-So

Investing in low-growth value-priced software stocks is a little like digging for gold with a Nerf shovel - you can get there eventually, but it's going to take a lot of patience. Clearly Wall Street did not care for the earnings report of Quest Software (QSFT), nor the new of an unexpected change in CEO, but underlying results were not so bad and patience could yet pay off for investors.

Fourth-Quarter Results Mostly Better Than They Seem
Quest reported that revenue rose about 13%, more or less meeting the average analyst guess. License revenue was a little soft, growing 8% on a reported basis, but growing not at all on an organic basis and missing the average estimate. Service revenue was a little better with 18% reported growth and 6% organic growth, but the beat versus expectations was modest.

Read the full piece here:
Quest Software - So Far, So-So

Seeking Alpha: Trying To Reconcile Deere's Double-Digit Growth With Peaking Demand

Deere (DE) is certainly not an ordinary heavy machinery company. Farmers tend to be loyal to brands and Deere has one of the most valuable brands in the world, let alone just in farm machinery. The trouble with Deere as a stock, though, is trying to balance out what is clearly a strong North American market with the past cyclicality of this business and industry.

A Few Hiccups In The Start To The Year
On balance Deere had a solid start to its fiscal year, but there were a couple of details that concern me as they relate to growth expectations. Total revenue rose 11% for the quarter and equipment revenue rose by a like amount - giving the company a better start to the year than expected.

Please click here for more:
Trying To Reconcile Deere's Double-Digit Growth With Peaking Demand

Seeking Alpha: With New Management, Teva Seeks To Reclaim Past Glories

To the credit of Teva Pharmaceuticals' (TEVA) board, if you underperform in the top spot there, you will be replaced. Recent years have seen the company struggle to deliver the sort of performance that shareholders had come to expect, and missteps in manufacturing and clinical development didn't help matters. Now the company has a new CEO, strong generic candidates, a growing branded business, and perhaps a chance to regain past esteem.

A Fairly Solid Q4
Teva's fourth quarter results were solid, if not radically ahead of expectations. Revenue rose about 29% as reported, with the inclusion of Cephalon adding a significant amount of revenue growth. Revenue from generic drugs and ingredients rose 12% overall, but were down 5% in the U.S. Branded drug sales rose 68% as reported or about 25% on an organic basis, with Teva's key multiple sclerosis drug Copaxone up 11%.

Follow this link for the full article:
With New Management, Teva Seeks To Reclaim Past Glories

Investopedia: Legal Unknowns Cloud Lender Processing Services Outlook

The fallout of the housing bubble and crash is still sorting out, but it looks like we're now at the point where regulators are going hunting for trophies to display to their still-angry voting constituents. While major banks continue to seek settlements for their part in the wrong-doing, Lender Processing Services (NYSE:LPS) is also finding itself in the crosshairs. Although this company's strong data and service offerings is likely to survive this mess on an operational basis, the legal liabilities and regulatory uncertainties could well weigh on the shares for some time to come.

Underlying Business Conditions Are Tough  
Absent some charges and adjustments, it was pretty clear from LPS's fourth quarter that operating conditions are still difficult. Revenue was down 14% this quarter, as transactions services revenue plunged 21% on lower default and loan facilitation service revenue. The company's data and analytics business fared reasonably well, though, and saw roughly 5% growth.

Please follow this link for more:

Investopedia: Apache Still Cheap Enough To Pay

Despite a long-term record that should place it among the best-run energy companies, Apache (NYSE:APA) is more often criticized for whatever it isn't than what it is has always been. Apache is never the company to play when oil is hot, nor is it the company to play when natural gas is the place to be. Apache is never the name to consider when a particular play or geology is in the news.

What Apache is, though, is a company with an enviable record of cash generation and per-barrel margins and a company with a record of producing excellent economic returns in place where others fear to tread. Apache's balance and diversification means it will never be the hottest name in the sector, but the value here is such that investors who want a dependable play on oil and gas should take a serious look.

Read the full article here:

Tuesday, February 14, 2012

Seeking Alpha: Gen-Probe Looking To New Launches To Drive Momentum

Even for somebody like me who spent the better part of a decade as a sell-side med-tech analyst, the diagnostics industry is often a muddle. While large established players like Abbott Labs (ABT), Danaher (DHR), and Roche (RHHBY.PK) look to change with the times and hang on to lucrative market share, up-and-comers like
Cepheid (CPHD) and Gen-Probe (GPRO) look to shake up the market and drive significant growth through major advances in testing technology.

With a new testing platform on the way and an expanding menu of tests, Gen-Probe may be looking at capturing some real share over the next couple of years. At the same time, valuation leaves little room for mistakes.

Closing Out The Year With A Shrug
Gen-Probe's fiscal fourth quarter earnings were pretty much mediocre. Revenue growth of about 16% was a bit light, with generally better-than-expected performance in blood screening (up almost 31%) offsetting the clinical diagnostics business (up 13%).

Please read more here:
Gen-Probe Looking To New Launches To Drive Momentum