Friday, March 30, 2012

Investopedia: Enbridge Energy Partners May Gain From Keystone's Pain

Whatever the objections people had to TransCanada's (NYSE:TRP) Keystone XL pipeline, the fact remains that the U.S. needs ways to get more oil from over there (wherever "there" may be) to over here. With its ownership of the U.S. side of one of the largest North American crude oil pipelines and extensive gas gathering operations in Texas, Enbridge Energy Partners (NYSE:EEP) may yet be able to benefit from the situation.

A Valuable Asset Becoming More Valuable
Key to the stories of Enbridge Energy Partners and parent/general partner Enbridge (NYSE:ENB) is the Enbridge Pipeline System. It includes about 1,200 miles of Canadian pipeline and the Lakehead System - 1,900 miles of U.S. pipeline than can move well over 1 million barrels of oil from oil fields in Western Canada down through Chicago and (through connecting pipelines) on to storage facilities in Oklahoma (Cushing) or along the Great Lakes, up to Montreal.

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Investopedia: Is Paychex A Small Business Annuity?

Slowly and maybe not entirely surely, business conditions are getting better. That's good news for Paychex (Nasdaq:PAYX), as this company needs a healthy small business environment to continue it growth plans. While results are decent and there are still growth opportunities for the company, oncoming competition and international expansion both look like increasingly relevant factors.

Decent Q3 Results
Paychex reported that revenue rose 7% for the fiscal third quarter, with organic revenue growth of 5%. Payroll services revenue grew 5% (4% organically) as checks-per-client rose almost 2%. HR services rose 12% (10% organic), and the company continues to see good growth in services like employee health and benefits. Earnings from the interest carry continue to be limited by the low rate environment, as the average interest rate fell 30 basis points and interest from client funds declined 7%.

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Investopedia: In Praise Of Lotteries

As surely as Fridays follow Thursdays, large lottery jackpots attract two things in abundant numbers – occasional players persuaded by the eye-popping monetary award to buy a ticket and patronizing warnings from financial writers that lotteries are a sucker's game and only fools play them. Though I'm a pretty hardcore value investor, I'm going to change things up and give some praise to lotteries.

Bad News First 
Fairness demands that the negative aspects of lotteries get some air time. For starters, the odds of anyone winning a major American lottery like Powerball or MegaMillions is vanishingly small – one in at least 100 million, typically. As pointed out in some anti-lottery articles recently, your odds are much better of being hit by lighting (1 in 1,000,000), killed by lightning (1 in 2,320,000) or, if you're an American male, being Tom Cruise (1 in 150,000,000).

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Investopedia: EXFO Testing Patience

It's important to remember that there are multiple definitions of success out there. Some companies have very successful products, but that doesn't always translate into impressive financial results or outsized stock market performance. Although EXFO (Nasdaq:EXFO) has been quite successful in terms of market and technology leadership in the communications testing business, management has never really translated that success into impressive financial results.

More of the same in Fiscal Second Quarter
Performance has been tough at EXFO for a while now, as major carriers like Verizon (NYSE:VZ) and AT&T (NYSE:T) delay capital spending on their networks. Although EXFO had established a recent string of squeaking by the quarterly expectations but lowering forward looking numbers, this quarter featured both a miss and yet another takedown of guidance.

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Investopedia: Cymer Still A Leading Light

Normally, large market share would sound like a golden ticket for shareholder returns. It's not so simple when it involves the semiconductor equipment industry, and Cymer (Nasdaq:CYMI) has proven to be just as cyclical as customers like ASML (Nasdaq:ASML) and other equipment companies like Applied Materials (Nasdaq:AMAT). With the photolithography industry on the cusp of both a rebound in demand and a major new technology cycle, investors may want to revisit this story.

The Big Dog in a Critical Step
Photolithography is an essential step in the manufacturer of semiconductors as the light source imprints the circuit pattern on the wafer. What's more, increasingly sophisticated light sources and photolithography machines have helped make Moore's Law a reality and enabled increasingly complex chips.

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Long Undervalued, Is Alkermes Still A Bargain?

For a large part of its history, Alkermes (ALKS) never quite seemed to get its due from the Street. Given its business plan of helping other pharmaceutical/biotech companies develop drugs in exchange for modest royalties, perhaps that's not so surprising. After all, other drug development names like Nektar (NKTR), PDL BioPharma (PDLI), and Flamel (FLML) really haven't worked out to early expectations.

Things are different now. Not only does the company have a mature portfolio of proven drugs and established technology, but the merger with Elan Drug Technologies has diversified that base in a meaningful way. Better still, the company has an intriguing mix of emerging drugs and a strong pipeline that includes several promising wholly-owned compounds.

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Long Undervalued, Is Alkermes Still A Bargain?

Thursday, March 29, 2012

Seeking Alpha: How Much Further Can Rare Diseases Carry BioMarin?

Investors have long known that there can be huge money in rare diseases, and over the years they have rewarded stocks like Genzyme (now part of Sanofi (SNY)) and Alexion (ALXN) accordingly. As another player in the rare disease space, BioMarin (BMRN) already sports a nearly $4 billion market cap, but with a lot of key clinical data coming in the next few quarters, it's worth exploring how much more could be left in the tank.

The Businesses In Hand
BioMarin is a somewhat rare biotech in that it already has four drugs approved and on the market.

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How Much Further Can Rare Diseases Carry BioMarin?

Seeking Alpha: AtriCure Could Start Paying Off

Healthcare is a little strange insofar as companies and analysts often correctly identify promising markets, but real commercial acceptance and usage takes quite a bit longer than most expect. In the case of AtriCure (ATRC), investors have long pondered the multi-billion dollar potential of an effective atrial fibrillation therapy, but the company had a long road to FDA approval and still has to sell and train a sometimes surprisingly stubborn medical community.

While the road ahead for AtriCure is still long (and uphill), the market potential here is such that successful marketing efforts could make this a very interesting stock in the coming years.

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AtriCure Could Start Paying Off

Wednesday, March 28, 2012

Investopedia: Teradata On A Tear

Big Data is increasingly becoming synonymous with "big valuation," as investors bid up those companies turning the seemingly insatiable enterprise demand for data analytics into real revenue growth. As a vendor of high-end data, warehousing and analytics, Teradata (NYSE:TDC) is very definitely benefiting from this demand. What's not so clear is whether new investors will earn a great return from here on.

Warehousing Profits 
Companies in industries like finance, communications and retail generate huge amounts of data, and data mining or analyzing that data for exploitable information is an invaluable part of competitive advantage. This is where Teradata steps into the picture, with its high-end warehousing solutions and analytical capabilities. 

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Seeking Alpha: Auxilium Pharmaceutiacls Has The Approvals; Can It Get The Revenue?

FDA approval is undoubtedly a major event in the life of a biotech company, but it is only a part of the puzzle. Marketing an approved drug is a battle in its own right, as investors in Auxilium Pharmaceuticals (AUXL) know all too well.

The company has found it difficult to drive market acceptance of its Testim testosterone gel and Xiaflex injection for Dupuytren's contracture and expectations have come down markedly. While the company's current products could still have billion-dollar potential, investors need to be prepared for a long, difficult slog to realize that potential.

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Auxilium Pharmaceuticals Has The Approvals; Can It Get The Revenue?

Seeking Alpha: Zhongpin - Market Has Doubts About Proposed Deal

I've had a love/hate relationship with China'a Zhongpin (HOGS) for some time now. I love emerging market food stories, and I believe ongoing consolidation in meat processing in China plays into this company's hands. What I don't love, though, is the company's ongoing capacity additions in an arguably already over-built market, to say nothing of the company's emphasis on selling through company-owned stores.

With Tuesday's developments, though, this story may be close to its final squeal.

An Appealing Bid …Maybe
Shortly after the open on Tuesday, Zhongpin announced that it had received a letter from the company chairman Xianfu Zhu offering to take the company private for $13.50 per share in cash. At the time of the letter, Mr. Zhu already owned more than 17% of the company's shares.

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Zhongpin - Market Has Doubts About Proposed Deal

Seeking Alpha: Brasil Foods - An Emerging Titan With Hefy Expectations

Being a titan always seems to come with strings attached - Atlas had to bear the weight of the world, Prometheus ended up chained to a rock, and Brasil Foods (BRFS) carries the burden of sky-high expectations. While it is indeed a good thing to be the second-largest food company in Brazil and one of the ten largest in the world, Brasil Foods' current valuation practically demands excellence if shareholders are going to see market-beating returns from this point.

Disappointing Q4 Results Highlight A Key Vulnerability
On the whole, Brasil Foods had a pretty mixed fourth quarter. Revenue did rise 11%, but higher production costs and salaries pulled EBTIDA down 4% compared to the prior year.

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Brasil Foods - An Emerging Titan With Hefty Expectations

Seeking Alpha: The Rumor Behind Amylin's Spike Makes Sense

Amylin Pharmaceuticals (AMLN) has always been a feast-or-famine sort of stock, as the company has long experience in surmounting the difficulties of dealing with the FDA (Symlin and Bydureon, most notably), competition, and its own now-former partner Lilly (LLY). Although recent prescription data on Bydureon has been disappointing, Wednesday's news from Bloomberg that a Big Pharma buyer had approached Amylin earlier this year had the stock rocketing in response.

Enter The First Rumored Bidder
Bloomberg reported Wednesday morning that unnamed sources claimed that Bristol-Myers Squibb (BMY) approached Amylin's board with a $22 takeout offer, which Amylin's board rejected last week. According to the report, there has been no follow-up from Bristol-Myers and Amylin remains focused on securing a marketing partner for Bydureon in Europe.

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The Rumor Behind Amylin's Spike Makes Sense

Tuesday, March 27, 2012

Seeking Alpha: Neurocrine's News Not As Bad As The Market Thinks

It's interesting to me how investors will react to news that comes from biotech companies. For those stocks where there's a strong will to believe, almost no bad news is bad enough to derail the story. But when a company has enjoyed a rebound and sits close to a 52-week high, any bad news seems easily blown out of proportion as investors look for an excuse to cash in their gains.

That's about the only explanation that makes much sense to me when seeing how shares of Neurocrine Biosciences (NBIX) are responding to news regarding results from a Phase 2 study and its upcoming pivotal Phase 3 study for lead drug elagolix

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Neurocrine's News Not As Bad As The Market Thinks

Investopedia: Can Lionbridge Technologies Find Its Roar?

All tech investors want is double-digit revenue growth from here to eternity. Companies, especially software companies, that don't deliver are often relegated to the discount bin - a place where Lionbridge Technologies (Nasdaq:LIOX) has been for a while. Although the financial performance at this company has not been great, expectations appear so low now that even a little bit of sustainable success could lift the shares.

Addressing a Scattered and Disorganized Market 
Lionbridge Technologies is one of the very few companies to do what it does - offering translation and "localization" services for a variety of companies. If a company needs to produce a foreign language version of its software, online offerings, marketing material and so on, they can go to Lionbridge for those services.

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Investopedia: Maxim Integrated Hoping To Drive A Hybrid Model

Investors looking into the semiconductor space can find an example of almost any sort of business model they may want to buy. Some analog companies, Linear Technology (Nasdaq:LLTC) or Analog (NYSE:ADI) for instance, focus on a wide variety of proprietary high-performance analog chips. Other companies focus more on high-volume chips for consumer applications. Then there's Maxim Integrated (Nasdaq:MXIM) - a chip company that's looking to do a little bit of both.

Mixing Old with New  
Maxim has a solid history in the high-performance analog space, where it garners broadly the same sort of profitable margins and long product lives as the likes of Linear and Analog Devices. More recently, though, the company has been pursuing high-volume apps like chips for handsets. Although these chips frequently have shorter cycles and lower margins, there is definitely money to be made in volume.

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Seeking Alpha: ISTA Pharmaceuticals Gets The Bid It Wants

I have to give credit where credit is due - ISTA Pharmaceuticals (ISTA) management stuck to its guns, remained patient, and ultimately got a much better deal for shareholders. With a solid deal in hand from Bausch & Lomb, ISTA management has given shareholders a pretty happy ending.

A Little Bit Of History Repeated
ISTA Pharmaceuticals has given shareholders a rollercoaster ride over the past couple of years. Shares rocketed up from mid-2010 to early 2011, only to erode again on fears of generic competition for Bromday. When Remura failed its clinical trials for treating dry eye (around August of 2011), the stock lost about half of its value and stayed in the dumps for most of the year as institutional investors fled a story with few near-term catalysts.

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ISTA Pharmaceuticals Gets The Bid It Wants

Seeking Alpha: Achillion Pharmaceuticals - Hope, Hype, And Hep C

I've followed biotech for a long time now, and I have a hard time thinking of an example of another addressable market like hepatitis C (HCV) where investor interest has just exploded in the space of about a year. Like antisense, monoclonal antibodies, RNAi, genomics, stem cells and every other hot property in biotech, there has been no end of hope, hype, and hucksterism. Although HCV is likely to grow into a very financially significant drug target in the coming years, it's worth wondering just how much of the frenzy today can be justified in long-term valuations.

In particular, I'm curious about Achillion Pharmaceuticals (ACHN) these days. I've watched this stock for a while now and came close to buying on multiple times in the pre-2010 pre-$2 level. I underestimated just how fast this market would heat up, though, and had to re-learn a painful lesson - sometimes, you snooze and you lose.

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Achillion Pharmaceuticals: Hope, Hype, And Hep C

Monday, March 26, 2012

Investopedia: Can Powerwave Live To Fight Another Day?

Deep turnarounds can deliver major multi-bag returns to daring investors, but the reality is that many of these stories spiral down instead of turn around. Powerwave Technologies (Nasdaq:PWAV) is certainly in deep trouble; not only has carrier spending dropped significantly in recent quarters, but the company is facing competition from commodity RF amplifiers. While the potential returns from a Powerwave turnaround could indeed be massive, investors have to weigh this against the real possibility that Powerwave cannot turn itself around fast enough to overcome its debt.

Follow the Trend  
Companies like Alcatel-Lucent (NYSE:ALU), Ericsson (Nasdaq:ERIC) and Nokia-Siemens have certainly been hurt by the recent slowdown in carrier spending, but the impact has been even more serious at Powerwave. From $170 million in quarterly revenue for the period ending July 3, 2011, revenue has plunged to $60 million.

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Seeking Alpha: For Oshkosh, Offense Is Better Than Defense

What the government giveth, it can taketh away. While Oshkosh (OSK) reaped some significant growth from its tactical truck business while Department of Defense budgets were flush, tighter budgets have brought down expectations and valuation significantly. While Oshkosh is going to be hard-pressed to fully neutralize tougher defense comps with better sales of commercial trucks, fire/emergency vehicles, and access equipment, the undemanding valuation nevertheless makes this one worth a little due diligence.

Feast And Famine From The Public Purse
More than half of Oshkosh's revenue comes from its defense business, and that's quite clearly not a "private payer" market. But it's not just the federal government that underwrites a lot of Oshkosh's business. While the company has leading share in airport, fire, and rescue vehicles, vehicle sales in these markets depend significantly on state and municipal budgets. All in all, then, something north of 70% of Oshkosh's revenue is derived from some sort of government spending.

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For Oshkosh, Offense Is Better Than Defense

Seeking Alpha: Reconsidering The Case For Johnson & Johnson

I have not been what you would call a supporter of healthcare giant Johnson & Johnson (JNJ) in my articles on Seeking Alpha, my old article on why I sold the shares having generated quite a bit of controversy. Companies and stocks are not static entities, though, and every responsible investor owes it to themselves to revisit stories and theses from time to time.

In With The New
Quite a lot has changed at J&J over the past year. Although the device market is still pretty sluggish, the company has been active in shuffling its deck. The company decided to throw in the towel and cede the drug-coated stent market to the likes of Abbott Labs (ABT), Boston Scientific (BSX), and Medtronic (MDT), while significantly strengthening its orthopedics business with the acquisition of Synthes. Once this deal closes (probably in the first half of 2012), JNJ will be a much bigger player in spine and trauma.

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Reconsidering The Case For Johnson & Johnson

Investopedia: Micron Still Searching For The New Normal

Commodity memory is an exceptionally volatile industry, and that's nothing new. That makes the concerns about Micron's (NYSE:MU) ASPs and weaker margins in the second quarter more or less par for the course. While it looks like the memory markets are on the road to recovery, investors have already seen a hefty rebound off the bottom and may want to ask themselves if they really need the turbulence and volatility that this stock is likely to produce in the coming year.

Fiscal Second Quarter Earnings Bring Trade-Offs  
Micron's earnings were a mix of good and bad news. Revenue performance (down 1% sequentially) was respectable, but investors may take a little issue with how that performance came about. Shipment growth was pretty strong, but ASPs were generally weaker than expected. While shipments (in bits) rose 21% in DRAM and 36% in NAND, prices fell 16 and 23%, respectively. The NOR business was also weak, as revenue fell 25% sequentially.

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Investopedia: Healthier IT Markets Helping Accenture

Outsourcing may still get a bad rap, but the fact remains that it's a major growth market around the world today, and Accenture (NYSE:ACN) continues to reap the benefits. At the same time, the company is hardly suffering in its consulting business. While the market has caught on to some of the value in this story, investors should yet expect to see further gains from this stock.

Good Second Quarter Numbers  
Accenture reported that revenue grew 12% as reported or 13% in local currency. Outsourcing was again the growth leader, as revenue rose 19%. Consulting was a laggard, but still saw top-line growth of 8%. Revenue in the core Americas region climbed 13%, and the company saw solid growth across its addressed industry groups.

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Investopedia: Nike Running Away From Everything

When companies with great brands go on runs, all you can really do is hang on for the ride (if you own shares) or wait in the hopes of a stumble somewhere down the line (if you don't). By no means is Nike (NYSE:NKE) cheap right now, but it's hard to fault a huge global leader that is growing by double-digits and could yet double revenue over the next decade (if not sooner).

Another Good Quarter ... Mostly  
Although it wasn't a flawless fiscal third quarter, on the whole Nike did a very good job and business is strong. Revenue rose 15%, as the company logged double-digit sales in all of its major categories. Sales to North America (the largest region) rose 17%, while sales to China rose over 25%, despite a somewhat sluggish performance in apparel.

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Friday, March 23, 2012

Seeking Alpha: Can Uroplasty Drive Adoption Of Its Better Mousetrap?

A lot of investors seem to think that all a company has to do to succeed in health care is develop a better therapy and the patients and docs will magically appeal. Unfortunately, that's never been true - strong clinical data and large under-served patient populations certainly help make a good story, but strong marketing often matters quite a bit.

That seems particularly relevant in the case of micro-cap med-tech company Uroplasty (UPI). The company's Urgent PC neurostimulation system for overactive bladder really does seem like a viable alternative in the $3 billion market it serves, but adoption has been slow and the company still has a lot yet to prove.

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Can Uroplasty Drive Adoption Of Its Better Mousetrap?

Investopedia: ConAgra Still Getting A Lot Of Benefits Of The Doubt

It's interesting to see how analysts and institutions will sometimes prioritize future expectations over past performance. For much of its recent history, ConAgra (NYSE:CAG) has been a poorly-run packaged food company, lagging almost of all of its peers in terms of returns on capital, margins and stock market performance.

Nowadays, though, it's a somewhat popular pick on the Street. Major brokerages like Bank of America, Barclays, Citi and Wells Fargo all have "Buy" ratings on the stock and analysts seem to be buying the story that ConAgra's management has a new plan in place that will drive substantially better results. Investors may do well to be a little more skeptical. (For related reading, see Cozying Up To Kraft.)

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Investopedia: For General Mills Better Means Less-Bad

Almost every U.S. packaged food company is having difficulty growing volume these days, as consumers increasingly look to save a few bucks by going with store brands. General Mills (NYSE:GIS) is not the worst company out there today, and its long history of solid returns and dividends should count for something, but it surely is not the strongest either. While existing shareholders of this company may want to sit tight, there's no compelling reason to buy it today.

An In-Line Third Quarter  
Given that General Mills warned the Street about this quarter back in February, there weren't too many surprises in store. While reported revenue was up 13%, the Yoplait acquisition made a significant impact and overall performance was basically flat on an organic basis. In the U.S. retail segment, sales did grow 4%, as a 5% volume decline was offset by a 9% improvement in price and mix.

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Investopedia: At FedEx, Fundamentals Don't Seem To Matter

It is interesting to me that Wall Street seemingly ignores some of the big problems at FedEx (low free cash margins, high ongoing capex needs, mediocre returns on capital) in favor of its charms as a leveraged play on economic growth. I don't doubt the value of FedEx's expensive-to-replicate global infrastructure, nor the potential to wring better performance from international operations, but it feels like that has been the story at FedEx for a long, long time.

Decent Third Quarter Results  
All things considered, FedEx did pretty well in its fiscal third quarter. Revenue rose 9%, more or less in line with most analyst estimates, with 8% growth in the large Express business boosted by 14% growth in Ground and 10% growth in Freight. Volumes were a mixed bag (down 4% in domestic Express, down 1% in International Priority but up 2% in Freight and 5% in Ground), but pricing was pretty strong across the board.

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Thursday, March 22, 2012

Seeking Alpha: YM Biosciences' Cheap Valuation Doesn't Make Sense

Having spent the better part of two decades investing in biotechs, I know better than to take any "it seems too good to be true" story at face value. And yet, when I dig into YM Biosciences (YMI) I'm legitimately puzzled at the skepticism, lack of support, and low valuation of this biotech. While one-drug stories are indeed risky and YMI has a formidable competitor to deal with, the current valuation on this stock seems more like a worst-case scenario in a biotech market that generally leans toward being much too optimistic.

CYT387 And Anemia - The Axis Around Which The Story Revolves
Right now it seems like all of the bear-vs-bull debate essentially boils down to whether or not YMI's lead compound CYT387 can demonstrate the ability to reverse/reduce anemia in myelofibrosis patients. If it can, the drug is underestimated and the stock is too cheap; if it cannot, fair value may not be all that much higher (but more on that later).

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YM BiOSciences' Cheap Valuation Doesn't Make Sense

Investopedia: Energy Transfer Equity Mastering The MLP Space

Investors certainly have plenty of choices when it comes to energy master limited partnerships (MLPs). One of the more interesting options these days may well be Energy Transfer Equity (NYSE:ETE). Not only is the company on track to complete its acquisition of Southern Union, but the company also holds the general partner interest and incentive distribution rights for two other MLPs - Energy Transfer Partners (NYSE:ETP) and Regency Energy Partners (NYSE:RGP). With those incentive rights and the potential for cash flow growth at both partnerships, ETE unit holders could look forward to some fairly significant distribution growth in the coming years.

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Investopedia: There's Still Time To Buy FSI International

The semiconductor sector has looked a bit more wobbly of late, but the odds still seem to favor a pick up in activity and orders in the semiconductor equipment space. Investors who want to make a high-risk/high-reward play on the sector should still consider FSI International (Nasdaq:FSII). While this tiny company's market share in the wafer cleaning space is still tantamount to rounding error, solid order growth speaks to a more interesting future.

Q2 Results - Plenty of Progress, Plenty of Work to Do 
FSI's second quarter highlights some of the pluses and minuses of this almost unfollowed story. Revenue rose 25% this quarter and handily surpassed sell-side analyst estimates. In point of fact, business was even a little better than it looked, as the company shipped two Orion systems that it was not able to recognize as revenue for the quarter.

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Investopedia: Oracle Looking Interesting Again

While some stocks simply take off and never really give investors another chance until the growth story is over, Oracle (Nasdaq:ORCL) keeps giving investors second chances to buy in to the story. True, there is a risk that cloud cannibalizes the old business, and there is also a risk that it resets down to a Microsoft-esque (Nasdaq:MSFT) level of growth that compresses the multiples. But given the scope of the company's opportunities in Big Data and enterprise software in general, I would say that Oracle is worth the risk at these levels. For more, see Earning Forecasts: A Primer.

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Wednesday, March 21, 2012

Investopedia: Can A Change In Priorities Drive Better Distributions From ETP?

A well-run energy MLP can be a beautiful thing for an investor whose inclinations run towards income. With the largest gas pipeline network in Texas and a growing focus on natural gas liquids (NGL), quality of assets is not an issue with Energy Transfer Partners (NYSE:ETP). The issue for shareholders, though, is whether this is the best play on these assets and whether the aggressive asset growth plans will translate into better distribution growth in the near future.

Q4 Results Not All That Great  
Although Energy Transfer Partners did report 17% year-on-year growth in EBITDA for the fourth quarter that was nevertheless about 4% below consensus expectations. That's admittedly not a big miss, but small percentages matter more with energy MLPs and investors' moods were not improved by the below-expectation distributions that the company announced. (For related reading, see EBITDA: Challenging The Calculation.)

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Seeking Alpha: Growing Markets Could Lift Manitowoc Higher

Manitowoc (MTW) is an odd industrial company, as it combines a fairly steady food service equipment business with a leading (but extremely cyclical) crane business. Counting on the future to be just like the past is admittedly dangerous, but if Manitowoc's crane business follows pretty consistent historical patterns, investors may have several more years of improving sales and cash flow to look forward to, as well as an undervalued stock.

Food Service - Smaller, But Usually More Profitable
Although the crane business produces more revenue for Manitowoc, the food service business is both more consistent and generally more profitable across a full cycle. For better or worse, this is a story unlikely to produce a lot of surprises either good or bad.

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Growing Markets Could Lift Manitowoc Higher

Seeking Alpha: Trius Therapeutics - The Calm Before The Storm

Biotech investing is often an exercise in "hurry up and wait". Once clinical trials are underway, there's not much for investors to do but wait and hope for positive news like partnerships, setbacks at competitors, or new additions to the pipeline. There's a risk that shares of Trius Therapeutics (TSRX) will go to sleep ahead of pivotal data in early 2013, but biotech investors may want to take a serious look at this under-owned name.

A New Antibiotic For A Market That Needs One
Despite the much-publicized rise of methicillin-resistant staphylococcus aureus (MRSA) and its growing threat to public health, antibiotic development is not a major priority for most large drug companies and biotechs. Some of this is due to difficulty (drugs that are very good at killing bacteria are often quite dangerous for the human taking them), but even more may be due to limited revenue prospects - the entire branded antibiotic market in the U.S. is smaller than the market for many individual cancer drugs.

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Trius Therapeutics: The Calm Before The Storm

Investopedia: PetroChina As Much About Politics As Performance

There are plenty of energy companies around the world that are partially owned by national governments, but the influence that those governments have can vary considerably. Statoil (NYSE:STO) and Total (NYSE:TOT) encounter relatively little direct interference, while the involvement of Brazil's government in the operations of Petroleo Brasileiro (NYSE:PBR) is considerably greater.

Even further along the spectrum sits China's PetroChina (NYSE:PTR). Although PetroChina is one of the world's largest oil companies and generally well-regarded for its corporate governance, there are no illusions about the extent to which the Chinese government calls the shots. The question for investors, then, is whether that constant "management" (or interference, depending upon your perspective) strips away from the value of this company's stock.

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Investopedia: Can Torchmark Be What It Used To Be?

Investors have definitely warmed up to insurance companies in recent months, as a quick look at the charts of property and casualty insurers like Allstate (NYSE:ALL) and Progressive (NYSE:PGR) will show. The same is true for the life insurers, as stocks like Lincoln National (NYSE:LNC) and MetLife (NYSE:MET) (even with the disappointment tied to the Fed's stress test) have done reasonably well.

Where does that leave Torchmark (NYSE:TMK)? Torchmark is an odd insurance company, as it offers fairly simple products and focuses in part on a competitive cost structure. While the stock is up nearly 50% over early October lows, current analyst targets seem to suggest that the future will not be nearly as strong as the past. If Torchmark can reclaim past returns on equity (ROE), though, the returns could be still be significant.

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Investopedia: Adobe Has To Deliver The Growth To Unlock The Value

One of the fundamental rules of tech investing is that there is no value without growth. Adobe (Nasdaq:ADBE) is undoubtedly a leader in its digital media markets, with well-known products like Acrobat and Photoshop basically defining their genres, but growth has been harder and harder to come by without relying on deals. With an upcoming new cycle in digital media and growth potential in digital marketing, can Adobe deliver the sort of growth it will take to get investors interested in the value?

A Somewhat Complicated Quarter  
Although reported results for Adobe's fiscal first quarter looked fine, some of the moving parts seem to be generating some chatter and worry. Revenue was up 2% from last year and down about 9% from the prior quarter, basically in line with expectations. Digital media revenue was down 12% sequentially and digital marketing revenue was down 4%. All in all, marketing did better and media did worse than expected.

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Tuesday, March 20, 2012

Investopedia: Another Mid-Quarter Disappointment In Steel

Stop me if you've heard this one before - it's close to the end of a quarter and a trio of the U.S.'s largest steel companies, Steel Dynamics (Nasdaq:STLD), Nucor (NYSE:NUE) and AK Steel (NYSE:AKS), have revised guidance lower. This has been an all-too-common phenomenon recently, even if investors still seem relatively confident about full-year performance. Although there is still a case to make that some individual steel stocks are too cheap today, it's worth wondering how many disappointments the sector will absorb before investors lose confidence. (For more, see Earning Forecasts: A Primer.)

A Trio of Cuts  
Within about 24 hours of each other, Nucor, AK Steel and Steel Dynamics all substantially lowered their guidance for first quarter earnings. Steel Dynamics dropped guidance by about 50% relative to prior expectations and Nucor's revision was similar in magnitude. For AK Steel, the magnitude of the revision was similar to Steel Dynamics in terms of cents per share (about 16 cents), but also means a quarterly loss instead of the expected profits.

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Investopedia: Growth And Quailty Don't Come Cheap At Oneok Partners

As one of the lower-yielding master limited partnerships (MLPs) (on a relative basis), investors may just pass over Oneok Partners (NYSE:OKS) in favor of other partnerships with more impressive yields. That could be a mistake. While Oneok Partners carries a higher premium than most of its comparables, it also has one of the best systems, growth profiles and stories in its group. While paying up for a company like this has its risks, growth seldom comes cheap in this space.

A Premier System
Oneok Partners is an MLP that engages in the business of gathering, transporting, fractionating, and processing of natural gas and natural gas liquids. Oneok Partners' system connects robust supply from the Mid-Continent and Rockies (and soon the Bakken as well) to key markets centers. Not only does Oneok Partners' system handle about one-fifth of the gas that the U.S. imports from Canada, but it also supplies major petrochemical companies like Dow (NYSE:DOW) and Exxon Mobil (NYSE:XOM). (For related reading, see Peak Oil: What To Do When The Wells Run Dry.)

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Investopedia: Investors Can Do Better Than Taiwan Semiconductor

In many respects Taiwan Semiconductor, also known as TSMC, (NYSE:TSM) acts as a proxy investment for the semiconductor industry at large. Boasting a who's who client list and the most capacity in the business, Taiwan Semiconductor rises and falls with the fortunes of the sector, but manages to do reasonably well even in the worst of times. While Taiwan Semiconductor is a well-run company, the valuation on the stock today suggests that investors willing to take on additional risk could do better with individual chip stocks.

Will There be a Second Half Rebound in Expectations? 
Like the semiconductor sector as a whole, investors went into 2012 with fairly strong expectations for a rebound in chip demand and revenue. So far, though, those expectations seem like they may have been a bit hasty. Once again, both Texas Instruments (NYSE:TXN) and Altera (Nasdaq:ALTR) revised guidance lower for the first quarter of 2012 and TSMC has also modestly trimmed its expectations for logic chip sales growth in 2012.

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Seeking Alpha: Cyclacel An Intriguing Long Shot

By and large, I don't waste my time on sub-$1 biotechs. Sure, every once in a while you can find a gem by dumpster-diving, but more often than not sub-$1 stocks are just a fast ticket to capital losses. All of that said, I have to admit I'm interested in Cyclacel (CYCC). While there's a lot to dislike about the company's capital/governance structure and plenty that could still go wrong, I'm intrigued by the tiny valuation of this stock.

A New Approach To A Very Tricky Disease
Whatever value Cyclacel has, it's tied to sapacitabine - the company's novel oral nucleoside analog that it has licensed from Daiichi-Sankyo. Sapacitabine is vaguely similar to Lilly's (LLY) Gemzar, and basically works by interfering with the DNA synthesis within a cancer cell.

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Cyclacel: An Intriguing Long Shot

Monday, March 19, 2012

Investopedia: As A Change Of Pace, Apple Does The Expected

Apple (Nasdaq:AAPL) enjoys a reputation, perhaps exaggerated but nevertheless valid, for being a company that zigs while everyone else is zagging. With Monday's announcement of a dividend and multi-year buyback plan, though, Apple did more or less what everyone thought it would do with its cash.

While this dividend will now open up new prospective investor groups for the stock, it seems highly unlikely to impact the company's future growth or investment plans. With leading technology in multiple markets, Apple looks as though it will be in position to continue adding to its already-prodigious cash pile in the coming years.

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Seeking Alpha: Neurocrine Could Be A Major Biotech Comeback Story

Crushing disappointment is fairly common in biotech and tends to be the end-game for many stories, but every once in a while there are companies that rebound from major disappointment and go on to considerable success. Not only does Neurocrine Biosciences (NBIX) look like one such story, but the potential of these shares is such that even a conservative analysis can make an investor do a double-take.

From Bedtime To Women's Health
I owned Neurocrine years ago and profited greatly from the run-up on anticipation of the company's success with indiplon - a insomnia drug that the company developed and eventually partnered with Pfizer (PFE). I sold out a bit before the peak, and the stock was subsequently crushed as the FDA refused to approve indiplon and Pfizer killed the partnership.

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Neurocrine Could Be A Major Biotech Comeback Story

Friday, March 16, 2012

Investopedia: Clean Energy Building It, Will The Customers Come?

There are a lot of pieces that have to lock into place, more or less simultaneously, for any sort of large-scale conversion to natural gas as a vehicle fuel in North America. Engine manufacturers have to know that truck builders (and buyers) will buy the engines, fleet operators need to know that they'll have a place to fuel up and fueling station operators need to know that there will be enough vehicles out there to pay for the fueling infrastructure.

Oddly enough, while there has been a lot of hot air over the years about the conversion to natural gas, it seems to actually be in the process of happening, and Clean Energy (Nasdaq:CLNE) is playing a major role. Now the question remains: Can Clean Energy earn long-term economic rents on its infrastructure, or will competitors let Clean Energy take on the risk and whittle away their rewards?

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Investopedia: More On Cisco's Acquisition Of NDS

In just the past few quarters, it really looked as though Cisco (Nasdaq:CSCO) had made some significant strides in turning around both its business and the Wall Street perception of the business. Growth was looking alright again and the company was making progress on margins. Although management had started to talk about its willingness to do deals again, most investors and analysts seemed to think that meant smaller tuck-in deals. (For more, see Earning Forecasts: A Primer.)

So much for that idea.

On the morning of March 15, Cisco announced that it had agreed to acquire privately-held NDS for $5 billion in cash. NDS is a company that focuses on "end to end" software packages for the cable and satellite TV industry. In particular, NDS is strong in areas like content streaming and security, where its software allows TV content to be delivered to a variety of devices, while preventing unauthorized access (hacking and theft).

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Investopedia: Ship Finance Has The Hatches Battened Down

Shipping is still a mess. Tanker rates have picked up a little bit and dry bulk rates seem to have at least leveled off, but overall rates are still not very good. That presents a fairly uninspiring backdrop for Ship Finance (NYSE:SFL), one of the world's largest tanker fleet owners. Although Ship Finance seems built to last, investors may wonder if the risk of further worsening conditions and/or a dividend cut is worth the potential of a sector recovery and the above-average dividend yield.

Restructured Deal with Frontline was a Must
Ship Finance does not operate the ships it owns, instead it charters them out to operators on long-term contracts. Unfortunately, a very large percentage of the firm's ships (and nearly all of its oil tankers) are chartered to Frontline (NYSE:FRO), the recently-struggling shipping firm controlled by John Fredriksen. For related reading, see Play the Bottom in Shipping.

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Investopedia: NVEC Still Searching For Commercial Relevance

One of the most frustrating experiences an investor can have is to be right about the technology, but wrong about the investment. NVE Corporation (Nasdaq:NVEC) has undeniably interesting technology, but questions remains as to whether this small company can fully develop spintronics-based products to penetrate potentially large markets like healthcare, wireless communications and industrial couplers. While there's still significant potential for greater adoption, investors have to at least consider the risk that NVEC will do all of the heavy lifting only to see others ultimately profit from the technology.

A String of Recent Frustrations  
NVEC has been on a relatively bad run of late with respect to its financial performance. Although the fact that only one sell-side analyst follows this company mitigates the significance of performance vis-a-vis estimates, it was still disappointing performance.

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FinancialEdge: Department Of Justice Bites At Apple

Price fixing allegations aren't anything new; investors can usually count on seeing a few threats lobbed at this or that industry every year. What's unusual in this case is that a form of digital media, often seen as the dragon slayer of entrenched controlled prices, is in the center of the fight. What's even more unusual is that Apple, a company often credited for spot-on sense of its customers' sentiments, is involved as well.

A Warning Shot from the DOJ
The U.S. Department of Justice has recently warned Apple, as well as five traditional large publishing houses, that it intends to pursue a suit alleging antitrust/price-fixing behavior in the e-book market.

What this case ultimately boils down to is the allegation that these companies have essentially forced Amazon and other retailers to raise their prices on e-books. While Amazon has generally preferred to use a wholesale pricing model (where it decides the final price and the margin it wants), publishers have forced the company in many cases to adopt an agency model - a model where the publishers set the price and give a fixed percentage over to the retailer.

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Thursday, March 15, 2012

Investopedia: Maxwell Offers Energy Tech With A Real Model

Energy tech is a perennially exciting market, even as the attention shifts from year to year among fuel cells, solar panels, wind power, batteries and so on. What makes Maxwell Technologies (Nasdaq:MXWL) unusual, though, is that it's a company with real revenue, real products and actually just a bit of profitability. While there is still very much a "build it and they will come" aspect to the company's targeted markets, Maxwell looks like a better play on the future of power alternatives.

Rare Profitability
A lot of energy tech has been divvied up between unprofitable speculative companies with little more than patents and prototypes and giant industrial/technology concerns. That makes Maxwell's profitability rather uncommon.

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Seeking Alpha: Caterpillars, Deer(e)s, And CNH - Oh My

Cyclical industries have this way of making investors look stupid, as the "it's different this time" crowd goes hand-to-hand with the "doom is just around the corner" contingent. Luckily for CNH Global (CNH) investors, the company is so well-diversified around the globe that a slowdown in one area can be offset by stronger conditions in another.

Like Deere (DE), CNH management has been a little conservative/cautious of late, and sell-side analysts seem to be getting a little more nervous about the health of the North American farm equipment market and the global construction equipment market. That said, CNH's overseas position is intriguing, particularly if management can start to execute better.

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Caterpillars, Deer(E)s, And CNH - Oh My

Seeking Alpha: If GTX Can Finally Catch A Break, The Rewards Look Worthwhile

Disappointment is a fact of life for biotech investors, but GTX (GTXI) seems to have had a little more than its fair share in its short history. Not only did a once-promising prostate cancer drug (toremifene) fail its Phase 3 trial in 2010, but the company saw a once-promising partnership with Merck (MRK) go south when the company re-evaluated its clinical priorities (and cost-cutting plans) after acquiring Schering-Plough.

More recently, the company's plans to develop Capesaris as a prostate cancer treatment came into serious doubt as the FDA ordered a clinical hold due to high rates of venous thromboemobolic (VTE) events in the Capesaris patient groups. Given that these deep-vein blood clots can lead to fatal pulmonary embolisms, the FDA's concern is understandable and it's unclear now as to whether there is a valid way forward with this drug.

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If GTX Can Finally Catch A Break, The Rewards Look Worthwhile

Investopedia: Wabtec Winning On The Rails

Sometimes it makes less sense to figure out who will strike gold and more sense to invest with the companies selling the picks and shovels. While North American Class 1 rails have definitely seen improved operating conditions, there are still variations between the companies when it comes to traffic growth, pricing and efficiency.

Why not consider Wabtec (NYSE:WAB), then? Not only does this rail equipment company supply virtually every North American railroad operator, it also serves the transit markets, international carriers and manufacturers of cars and locomotives. Though the stock has done well already, the financials and backlog here are such that it may not be unreasonable to hold out hope for more to come. For related reading, see A Primer On The Railroad Sector.

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Investopedia: Zhongpin Takes Investors To The Abattoir

Zhongpin (Nasdaq:HOGS) is proving to be a tough company to love. While I still like the opportunity offered by China's fourth largest pork processor, this quarter shows once again that commodity markets are unpredictable and sometimes irrationally competitive. Though Zhongpin continues to offer solid long-term prospects to patient investors, more conservative investors may want to take their chances instead with company's looking to exploit China's protein demand through the export markets.

A Disappointing End to 2011  
Zhongpin doesn't necessarily make analysis easy on investors, as they did not print quarterly numbers for the fourth quarter results. Luckily, backing out the results isn't all that difficult.

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Investopedia: PCTEL May Be Signaling "Buy"

Investors aren't going to find too many small companies with PCTEL's (Nasdaq:PCTI) record of returning cash to shareholders. In addition to paying a special dividend a few years ago, the share count here has declined about 20% since 2007. All of this has been achieved despite a clear breakout product and the fact that revenue for 2011 was more than 10% below the level back in 2006.

Unfortunately, value-oriented tech companies seldom get their due. While PCTEL has a decent business in antennas and mobile network test equipment, it's going to take more than that to make the shares really exciting. Luckily for investors, there is an iron in the fire that just might make this a more interesting name in the future.

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Investopedia: ADA-ES A Coal Story The Market Actually Likes

Thermal coal companies are getting pounded, as a warm winter left utility stockpiles higher than normal and utilities switched to cheaper natural gas. Amidst all that, though, ADA-ES (Nasdaq:ADES) is near its 52-week high as the company continues to ramp up its refined coal business and sees ongoing demand in its emissions control business. ADA-ES has risks that are well above average, but as a rare play on cleaner coal technologies, the stock could still continue to work.

Momentum Coming out of the Fourth Quarter  
ADA-ES certainly closed out 2011 on a strong note, as revenue was well ahead of expectation. Revenue jumped 174% to almost $25 million, driven by 20% growth in the emissions control business, over 150% growth in the tiny CO2 (carbon dioxide) capture business and 244% reported revenue growth in the refined coal operations (to over $20 million).

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Investopedia: Green Dot Making Investors A Little Green

It's not uncommon for new stocks to give back a lot of their market cap as the initial public offering (IPO) buzz fades and initial buyers look to cash out. In the case of Green Dot (NYSE:GDOT), that readjustment period has been pretty difficult as the stock is off nearly 60% from its all-time high. Making matters worse, competition is heating up and management's decisions have left more than a few investors scratching their heads.

Not Quite Living up to all the Growth Hopes  
Green Dot has logged three straight quarters of below-consensus revenue, and that frankly weighs heavier with institutional investors than the fact that that revenue is growing at a better than 20% clip. Where Green Dot is earning some credit is with the margins, as the company did pretty well in the last quarter with a two point improvement in adjusted operating margin.

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Seeking Alpha: Challenging Targets Could Pay Off For Ziopharm Oncology

Give the management at Ziopharm Oncology (ZIOP) credit - they're not looking to be a me-too player in easy drug categories. Although Ziopharm isn't initially targeting oncology markets with huge top-line sales potential, offering decidedly better mousetraps could nevertheless translate into very solid market shares and attractive partnership economics down the line.

Old School In A New Way
There's no question that there has been a lot of excitement around new targeted approaches to cancer. Whether it's monoclonal antibodies like Amgen's (AMGN) Vectibix or Roche's (RHHBY.PK) Avastin, antibody-drug conjugates, or cancer vaccines, dozens of experimental drugs have been advanced on the basis of the sometimes severe systemic toxicity that often goes with chemotherapy.

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Challenging Targets Could Pay Off For Ziopharm Oncology

Wednesday, March 14, 2012

Investopedia: Will Natural Gas Keep Sapping Power From Rail Traffic?

If there is anything to take away from the February rail traffic data (as reported by the Association of American Railroads), it's that the shift away from coal as a fuel for electricity production is not just theoretical anymore. While major rails will adjust to this shift in time, it seems likely to shake up the business in 2012.

February Data - The Familiar "But"
The story on U.S. rail traffic data is getting a bit routine here of late. Traffic was down 1.9% from last year (and down 2.9% from January), *but* traffic excluding coal and grain was up 7.7% (and up 5.5% excluding just coal).

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Seeking Alpha: Should Seattle Genetics Start Thinking More Like A Pharma Company?

Approval and launch hasn't quite meant Easy Street for Seattle Genetics (SGEN). Granted, the company now carries a $2 billion market cap and has doubled over the past two years, but there still seems to be a great deal of controversy about the true potential of its drug Adcetris and the subsequent fair value. Oddly enough, perhaps part of the answer is for Seattle Genetics to think a little more like a pharmaceutical company and a little less like a biotech.

Where Will Adcetris Go?
Arguing about market potential and peak sales is nothing new in biotech -- just review the debates at AEterna Zentaris (AEZS) or Vivus (VVUS) sometime -- but the spread in sell-side estimates for Adcetris still surprises me. I've seen expectations as low as $250 million to as much as $900 million. On the low end, it would assume that Seattle Genetics finds largely unmitigated failure in extending the label and usage; on the high end, it presupposes that almost everything goes right.

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Should Seattle Genetics Start Thinking More Like A Pharma Company?

Investopedia: Lenovo Looking To Combine HP And Apple Models

For a variety of reasons, Lenovo (OTCBB:LNVGY) just doesn't often garner that much respect in the market. Whether it's worries about its low margins, dependence on China or vulnerability to competition, Lenovo has long carried a below-peers valuation. As the company looks to leverage its strength in new products, though, this company may yet have more gains to deliver.

Growing Where Others Cannot  
Lenovo's recent quarter highlights some of this company's strengths. Revenue rose 44% in its fiscal third quarter, with EBITDA up almost 46%. Granted, the company's margins are quite low (operating margin below 3%), but the company continues to produce solid cash flow with that margin structure.

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Tuesday, March 13, 2012

Seeking Alpha: Is AEterna Zentaris Really Worth All This Fuss?

As a general rule, if you want to get the hate mail rolling in, write about a controversial biotech stock. And since I'm feeling a decided lack of people questioning my intelligence, ethics, and consanguinity of my parents, I thought I would wade into the maelstrom that is AEterna Zentaris (AEZS).

A New Contender For A Sizable Market
Treatment-resistant cancers are a popular target for biotechs and pharmaceuticals these days, as the thresholds of approvable efficacy tend to be more reasonable and the lack of alternatives usually supports very profitable pricing. One of the larger markets within this group is resistant colorectal cancer; although colorectal cancer is generally very treatable if caught early, not all patients are so lucky and the sheer frequency of the cancer makes the treatment-resistant population sizable.

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Is AEterna Zentaris Really Worth All This Fuss?

Seeking Alpha: A Med-tech Shopping List For Japanese Companies

Outside of pharmaceuticals and "big iron" applications like imaging, Japanese companies haven't made much impression on the U.S. healthcare market. That may be changing, though. As Japan faces its own aging population and companies look to diversify from traditional industries, healthcare is becoming an increasingly popular sector in corporate Japan.

It's still too soon to call it a real trend, but Japanese companies have recently shown an inclination towards accelerating their diversification by buying established U.S. med-tech names. Asahi Kasei recently announced a $2 billion-plus deal for ZOLL Medical (ZOLL), while a few months earlier Fujifilm stepped up to buy SonoSite (SONO). Though not exactly comparable, Terumo (a Japanese healthcare and device company) acquired CaridianBCT for over $2 billion early in 2011 to strengthen its position in the global transfusion equipment market.

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A Med-Tech Shopping List For Japanese Companies

Investopedia: Will Warnings Derail The Chip Recovery?

Sometimes a surprise isn't really that surprising. Once again, both Altera (Nasdaq:ALTR) and Texas Instruments (Nasdaq:TXN) have warned that quarterly revenue is going to be slightly worse than previously expected. Given the sell-off in the chip sector since February, and the relatively modest reaction to the news, it sounds like investors had already begun to bake in expectations for a slightly slower or stretched-out recovery. (For more, see Earning Forecasts: A Primer.)

Texas Takes down the Numbers  
All things considered, the revision at Texas Instruments is far from monumental. The midpoint of guidance now calls for a sequential revenue contraction of 11%, versus a prior expectation of 8%. In real numbers, that amounts to $100 million out of about $3.1 billion.

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Investopedia: Trying To Make Sense Of Navistar

Cyclical stocks are notoriously difficult to value, as very few analysts or investors can accurately measure the length and amplitude of the cycle. In the case of Navistar (NYSE:NAV), it gets even more difficult as the company continues to develop its own engine program and work towards better internal efficiency. While Navistar is a stock with above-average risk, a strong rebound in the truck cycle could push these shares up substantially.

A Stuttering Start to the Year  
Navistar's first quarter earnings were a real mess. Revenue was alright, as sales (excluding financing) rose nearly 12% from last year. Truck revenue jumped 20%, while engine revenue fell 13% and parts revenue ticked up 5%.

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Investopedia: Innospec Might Be A Name To Watch In Specialty Chemicals

It seems a little strange that a specialty chemicals business with $750 million in annual sales and strong returns on capital would be a virtual unknown, but that's the case for Innospec (Nasdaq:IOSP). Although this is a company with input cost exposure and somewhat volatile free cash flow, investors may want to keep an eye on this name as a potential value in the sector.

Addressing Huge Markets for Specialty Chemicals  
Broadly speaking, the markets for fuel additives and chemicals used in personal care products are huge. While there are many competitors, including major chemical companies like DuPont (NYSE:DD), Dow (NYSE:DOW) and BASF, this is nevertheless a market where offering the right proprietary product can drive premium pricing and reliable business.

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Seeking Alpha: ZOLL Medical - One Of The Best Growth Stories Is Gone

Great growth stories in med-tech really are a "now you see it, now you don't" proposition, as large rivals either whittle away the growth with competition or buy the company outright. The latter proved to be the fate for ZOLL Medical (ZOLL) as this fast-growing med-tech company accepted an all-cash takeover bid.

The Deal
ZOLL Medical announced that it accepted an all-cash offer from Japan's Asahi Kasei for $2.21 billion, or $93 per share in cash. At this price, ZOLL shareholders get a 24% premium to Friday's close, more than 27 times trailing EBTIDA, and more than four times trailing revenue.

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Zoll Medical: One Of The Best Growth Stories Is Gone