Sunday, March 31, 2013

Seeking Alpha: Endologix Shows How Growth-Hungry Med-Tech Investors Are

Since it seems to be accepted practice now to accuse anyone who doesn't think your stock is a screaming buy today with being "secretly short", let me be very clear from the get-go - I like Endologix (ELGX) quite a lot as a company, I think the company's technology is innovative, and I see the company as both a share-gainer in endovascular AAA treatment and one of the best growth stories today in med-tech. All of that said, I don't see it as a bargain unless/until a larger med-tech company decides that it must have it as its own.

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Endologix Shows How Growth-Hungry Med-Tech Investors Are

Seeking Alpha: Strong Share And Management Discipline Bode Well For Koppers

Famed investor Peter Lynch liked to advocate for investing in companies that do things that nobody really ever thinks about, or even better, does things that are unpleasant in some fashion. Koppers (KOP) arguably fits both of this criteria, as I don't think many investors spend much time contemplating the markets for carbon pitch or creosote, and distillation of coal tar (and its byproducts) are not what I'd call particularly pleasant.

That's not what I find interesting about Koppers. More relevant to me are the company's strong market shares across multiple markets and a management team that seems keenly focused on economic value creation. Although Koppers stock is just off its 52-week high and about 10% off its all-time high, these shares could still offer some upside from today's level.

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Strong Share And Management Discipline Bode Well For Koppers

Q1 2013 Performance Update

The first quarter was another strong one for my portfolio(s). A significant percentage of my holdings are at, or above, fair value and I'm starting to worry that U.S. markets (and many foreign markets) are getting overheated. While I'd rather hold overpriced shares of a good company than undervalued shares of inferior companies, I will likely be looking to shift some capital towards stocks with more compelling valuations.

Q!'13 Performance
Portfolio A - +15.2%
Portfolio B - +9.4%
Combined Portfolios - +13.2%

S&P 500 - +10.0%
Nasdaq - +8.2%
Russell 3000 - +10.5%

Please note that the market performance figures do not include dividends, which I would estimate would add about 0.5% to the S&P 500 performance number. 

Thursday, March 28, 2013

Investopedia: Lindsay Corp Still Reaping The Benefits Of The Drought

Last year's serious drought was certainly bad news for uninsured farmers, unhedged buyers of grain, and those who were on the other side of the hedging transactions. On the flip side, the resulting high grain prices have been good news for equipment makers like Deere (NYSE:DE) and Lindsay (NYSE:LNN). The biggest questions for the world's second-largest maker of irrigation equipment now are how much longer the good times will last and whether investors have already let their expectations get ahead of reality.

Strong Results In Fiscal Q2
Results at Lindsay and chief rival Valmont (NYSE:VMI) have historically tracked the price of corn, and that relationship has led to strong results in recent quarters for the company.

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Investopedia: Red Hat's Valuation Looks More Reasonable, But Expectations Could Be Problematic

There's room for more than one successful model in the software world, and not every company has to be IBM (NYSE:IBM) or Oracle (Nasdaq:ORCL). To that end, cloud-based models like (NYSE:CRM) and service/support-oriented models like Red Hat (NYSE:RHT) can work in terms of generating attractive revenue and free cash flow growth rates. What's key, though, is understanding what's different about these models and adjusting expectations accordingly, and that may still be a significant source of risk to Red Hat investors.

Fiscal Q4 Numbers Came In Weaker Than Expected
Like Oracle and TIBCO (Nasdaq:TIBX) before it, Red Hat delivered a relatively disappointing quarterly result, though the magnitude of the disappoint was different. Even so, investors may do well to take a more cautious view of underlying growth here.

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Seeking Alpha: For Sandy Spring Bancorp, It Looks Like Buy Or Be Bought

Banking regulators seem to be trying to achieve a delicate balance between a banking system that is too consolidated among a small group of giant institutions ("too big to fail") and a system that is too fragmented to run efficiently and provide high levels of service. While I believe that regulators will be loath to let the top 10 (or perhaps the top 20) banks get much larger, I also believe they'd like to see even more competition coming from the next tier. To that end, Sandy Spring Bancorp (SASR) could have an interesting future in the Mid-Atlantic region as either a growth-by-M&A story or as a target itself.

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For Sandy Spring Bancorp, It Looks Like Buy Or Be Bought

Seeking Alpha: High Quality And Ample Dry Powder Make Prosperity Bancshares One To Watch

While Texas-based Prosperity Bancshares (PB) has gone along with the year-to-date mid-cap bank stock rally, the overall performance over the past year hasn't been all that special. A lot of that has to do with the valuation; investors have generally been happy to assign robust multiples to this bank due to its uncommon growth and quality, but those same multiples seem to have left these shares a relative also-ran in performance.

And so it is today - while Prosperity is a very well-run bank and has substantial long-term growth potential (not to mention ample dry powder on the balance sheet), the valuation today is not what I'd call "can't miss." With mid-cap banks in general looking a little pricey, Prosperity isn't a bad relative call today, but more nimble investors may want to focus their time and attention today on small-cap banks while waiting for a pullback in names like Prosperity.

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High Quality And Ample Dry Powder Make Prosperity Bancshares One To Watch

Wednesday, March 27, 2013

Investopedia: Sonic Still In A Tricky Spot

Try as it might, drive-in quick service restaurant (QSR) Sonic (Nasdaq:SONC) just can't seem to get everything working at top form in its business model. While the company has an innovative (some might say “quirky”) menu that really does stand out from the offerings at McDonald's (NYSE:MCD), Burger King (NYSE:BKW), and Wendy's (NYSE:WEN), and has looked to refine its promotional activity and value-priced offerings, the company has made only modest progress in terms of growth.

As it stands today, analyst expectations on Sonic are pretty bifurcated. There's a small group that believe that Sonic will regain its growth momentum and do significantly better from here, while the larger group is more pessimistic and calls for Sonic to basically bump along as it has for some time now. While these shares have been strong over the past year and have recently broken out to a multi-year high, further gains could well be in store if the optimists are right.

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Investopedia: Oracle Dials It Up In Telecom

Oracle (Nasdaq:ORCL) doesn't do things halfway, and when the company announced its acquisition of Acme Packet (Nasdaq:APKT) it looked like only the beginning of the company's strategy to exploit the large telecom vertical. Now we know that the company really is serious, as it has followed the Acme Packet deal with an announcement that it intends to acquire networking vendor Tekelec from its private equity owners.

A Complimentary Deal With Interesting IP Ramifications
Right off the bat, acquiring Tekelec makes quite a bit of sense. Tekelec is a telecom equipment vendor that specializes in products that handle mobile traffic. In particular, the company focuses on areas like network signaling, policy control, and subscriber data management. Combined with Acme Packet's network control products/technology, Oracle will offer a cohesive hardware/software line-up in network control for large carrier customers like Verizon (NYSE:VZ) and AT&T (NYSE:T).

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Tuesday, March 26, 2013

Seeking Alpha: ExactTarget Needs A Decade Of Exceptional Growth To Hit Its Targets

Everybody complains about marketing, but most of us still respond to it anyway. With digital/interactive marketing picking up where print and media have left off, ExactTarget (ET) is looking to tap into what should be a multi-billion annual market for cross-channel interactive marketing spending. Like almost every small tech company, though, there are still ample doubts that ExactTarget can hit the market - doubts about the real market size/opportunity, doubts about the exclusivity of the company's approach, and doubts about likelihood that the company will deliver the strong growth that will be needed to keep the shares moving.

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ExactTarget Needs A Decade Of Exceptional Growth To Hit Its Targets

Seeking Alpha: Going It Alone Could Be A Tough Road For Synovus Investors

If I'm brutally honest, following bank stocks on a week to week basis is a challenging (and not particularly exciting) pursuit. While we all got a vivid lesson in just how badly wrong these business models can go, even on a quarter to quarter basis we're pretty much talking about submarine races - there's a lot going on below the surface, but you'll never see it.

That is relevant to Synovus (SNV) as these shares have enjoyed quite a run - up 35% over the past year, about 66% from the summer 2012 lows, and near a 52-week high on optimism about the prospects for improved performance, a TARP repayment, and a possible acquisition. That long-held expectation of a deal could actually be the biggest risk factor for these shares today. While the company could indeed hold value for an acquirer, it's much harder to find an attractive target price on its own operating credentials and a failure to see a bid materialize after the TARP repayment could set shareholders up for some depressing performance.

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Going It Alone Could Be A Tough Road For Synovus Investors

Saturday, March 23, 2013

Investopedia: Nike Continues To Just Do It

For Nike (NYSE:NKE) to perform as it has despite economic challenges in Europe, China, and the U.S. is a pretty strong testament both to the power of the brand, but also the company's commitment to product development. With a strong pipeline, signs of improvement in China, and the potential to recapture some lost gross margin, Nike could retest its 52-week high in the not-so-distant future. Nike isn't a terribly cheap or underrated stock, but strong financial performance could still translate into decent (or better) stock performance.

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Investopedia: Another Stumble At Tibco Should Lead To Uncomfortable Questions

Every company/management team drops the ball eventually if they stay in the game long enough. The real question is how quickly they pick the ball up and get back to business as usual. TIBCO (Nasdaq:TIBX) has now logged two significant consecutive disappointments, and it is worth asking why management hasn't been more aggressive in addressing the sales execution issues it has cited as fueling the problems.

Although I think TIBCO is underrated and could become a “platform IT company” after these growing pains, these mistakes and lost opportunities raise legitimate questions about whether management can realize that transition. TIBCO looks cheap to me, but this is not a stock that I'd recommend for nervous or risk-averse investors.

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Investopedia: Oracle's Negative Surprise Underlines A Surprisingly Volatile Model

Software giant Oracle (Nasdaq:ORCL) has always marched to the beat of its own drummer, and that willingness to go its own way has always been a big driver of the company's success. It doesn't come without a cost, though, as Oracle is also surprisingly volatile on a quarter-to-quarter basis when compared to other large tech companies like IBM (NYSE:IBM), Microsoft (Nasdaq:MSFT), and SAP (NYSE:SAP).

For the company's fiscal third quarter, that volatility swung in a very negative direction. While the shortfall may well have been due to a combination of revenue pulled forward into the surprisingly strong fiscal second quarter (as customers finished spending on 2012 budgets) and weak sales execution, investors are likely to take it as a referendum on the near-term health of the tech sector. More patient investors, though, may want to use an opportunity like this to build a position in a company that, while erratic, is also a strong performer with an interesting valuation.

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Investopedia: Have See-Through Pants Created An Opportunity In lululemon Shares?

For a stock with a take-no-prisoners valuation, the reaction to Lululemon Athletica's (Nasdaq:LULU) sizable product recall has been quite restrained. Even with a defective batch of the company's top product taking steam out of the first quarter's comp growth, this company is still growing and seeing good success in broadening its product offerings. While there is a limit to how many missteps customers will tolerate from a company selling premium-priced products, Lululemon has been relatively proactive and upfront in dealing with the issue. Although I still believe the growth expectations here are still pretty aggressive, investors who believe otherwise could see this as an opportunity to pick up shares.

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Friday, March 22, 2013

MassDevice: Looking Back On A Pretty Sedate ACC

Sometimes the major annual medical meetings are jam-packed with significant and market-moving data. And then sometimes they're like this year's American College of Cardiology conference, with relatively limited useful data from an investing perspective.

While there was some incremental data relating to significant emerging growth markets like transcatheter valve replacement and renal denervation, the most significant data concerns one of the more uncertain market opportunities – left atrial appendage occlusion/closure.

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MassDevice: The Chinese Medical Device Market Driven By Both Growth And Value

In recent years, medical device companies in the U.S. and Europe have woken up to what pharmaceutical, industrial, and consumer goods companies have known for some time – China is a major growth opportunity. Even more recently, we've seen several well-known device companies step into the market more directly by buying domestic Chinese device companies. While China is indeed a huge potential device market, the realities of the market mean that companies who can focus on value may in fact be the ones best-positioned for growth.

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MassDevice: What Has Earnings Season Told Us About Med-Tech?

As the dust settles after another earnings season, it's time to look back at what we now know about the state of the industry. Stocks in the sector have been enjoying a run that started in November 2012 on hopes for improving utilization trends and earnings in 2013.

While the results and guidance from this latest round of earnings suggest that expectations around utilization may have been a bit too optimistic, it does look like the industry is on firmer footing than a year ago.

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Seeking Alpha: The Forecast For Synchronoss Looks Cloudy, With A Chance Of Outperformance

A certain segment of the tech investor community may loathe buzzwords like "cloud," but the reality is that it's a fixture of the landscape for now and the core of many public company business models. One such company is Synchronoss Technologies (SNCR), which has created a hosted service to handle mobile phone activations and transactions, as well as a white label personal cloud offering for mobile customers.

While significant future growth in the company's activation business is going to hinge on signing up additional Tier 1 service providers, the growth potential in customer cloud services is hardly trivial. I think investors would do well to ask if white label cloud services are destined to become a commodity, but these shares could still hold upside from today's level.

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The Forecast For Synchronoss Looks Cloudy, With A Chance Of Outperformance

Thursday, March 21, 2013

Seeking Alpha: The Street Doesn't Seem To Believe Radware Will Become A Player

Wall Street doesn't typically have all that much patience with tech growth stories, so while Radware's (RDWR) historical growth is hardly embarrassing, it doesn't seem like analysts or investors expect big things from this company in the future. Maybe that's fair given the slowing ADC market and the rampant competition in security, but Radware's technology and rich cash balance could generate more growth than currently expected.

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The Street Doesn't Seem To Believe Radware Will Become A Player

Seeking Alpha: Forum Energy Technologies Building A One-Stop Energy Shop

In recent years, major energy sector equipment manufacturers like Cameron (CAM), National Oilwell Varco (NOV), and FMC Technologies (FTI) have had to make way for new competitors. Most investors are probably already familiar with General Electric's (GE) ambitious growth in the offshore/subsea equipment sector, but Forum Energy Technologies (FET) may not be as familiar to readers. While there are certainly ample risks attendant with a debt-fueled roll-up strategy in a very cyclical industry, investors may want to get up to speed on a company that looks to offer a rare "soup to nuts" array of equipment and exposures in the energy space.

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Forum Energy Technologies Building A One-Stop Energy Shop

Wednesday, March 20, 2013

Investopedia: Sequestration - What Will It Do, And What Should You Do?

With the deadline having come and gone with no real action from Congress, sequestration is now the reality of the U.S. economy. Originally designed as an unthinkable, unacceptable, avoid-at-all-cost-because-it's-too-horrible-to-contemplate “trick,” in order to force Congress to negotiate and achieve long-term plans for a better balance between spending and revenue generation (taxes), Congress instead decided to think the unthinkable and let it happen.

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Investopedia: General Mills Third Quarter Earnings

When Heinz (NYSE:HNZ) drew a premium-priced buyout bid from 3G Capital and Berkshire Hathaway (NYSE:BRK.A, BRK.B), investors got giddy about revaluing the entire packaged food sector. Unfortunately, that looks a bit indiscriminate when it comes to General Mills (NYSE:GIS). While this isn't a bad business per se, nor is it one where a buyer couldn't find some room for improvement - it doesn't have the same sort of brands, market share or international profile. General Mills' fiscal third quarter earnings weren't bad, but the shares are trading in excess of fair value today and don't look like a great holding at these prices.

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Saturday, March 16, 2013

Seeking Alpha: XPO Logistics Has Huge Ambitions, But Wall Street Has Real Doubts

It doesn't feel like a stretch to say that Wall Street loves logistics. From FedEx (FDX) to Hub Group (HUBG), from Landstar (LSTR) to JB Hunt (JBHT), most of this sector is trading very close to 52-week highs, even though economic activity in the U.S. has been pretty "meh" recently. While CH Robinson (CHRW) and XPO Logistics (XPO) are a bit further removed from their highs, I think the latter could be a very interesting opportunity even at these levels.

The ambitions of the XPO management team are nothing short of extraordinary - they aim to take a company that sits around the #20 spot in the U.S. truck brokerage with $280 million in revenue and grow it into the #2 player by 2016, with revenue in the range of $4 billion to $6 billion. That's an incredible goal and frankly Wall Street isn't buying it - or at least not showing a willingness to assume that XPO can grow at that rate and generate any sort of real free cash flow. If the Street is wrong and management is right, shareholders could be looking at a future multi-bagger here.

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XPO Logistics Has Huge Ambitions, But Wall Street Has Real Doubts

Seeking Alpha: Expensive And Hard To Own, Natura Cosmeticos Is Still A Great Brazil Play

Brazil may be a popular topic in international investing, but it's actually not all that easy to invest in some of the best Brazilian growth stories. Such is the case with Natura Cosmeticos (NUACF.PK). Natura is a true Brazilian success story and a fantastic play on the Brazilian consumer, but the U.S. ADR has virtually no liquidity and Brazil is an "institutions only" market for foreign investors. That said, there are readers who can buy these shares and even if you cannot own Natura today, it's a stock well worth following if you want to know more about what's going on in Brazil beyond the government-reported statistics.

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Expensive And Hard To Own, Natura Cosmeticos Is Still A Great Brazil Play

Seeking Alpha: Gordmans Stores Looking To Carve Out A Niche In The Cutthroat Retail World

I go back a long way with Gordmans Stores (GMAN). When I was a little kid, the local Richman Gordman had a kids play area with these huge (to a 4-yr-old) fiberglass animals that you could climb on/through, slide down, and otherwise amuse yourself with. The play area was always pretty full, and I think Richman Gordman was locally popular if for no other reason than mothers could do some shopping (these were the days when you actually could leave kids unattended to play) while their shrieking hellions amused themselves without bothering other shoppers.

Fast forward all too many years, and it's worth asking if the U.S. retail scene really needs yet another shopping destination. In the case of Gordmans, I think there could be something here - the company is trying to combine discount store pricing with a specialty store "feel," and shoppers have proven over and over again that they love that combination. With a good balance sheet, an economically attractive store model, and a solid expansion plan, these shares may just be a discount themselves today.

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Gordmans Stores Looking To Carve Out A Niche In The Cutthroat Retail World

Seeking Alpha: Monotype Imaging Looks To Print Money

Fonts and typefaces fall into that group of technologies that nobody thinks about unless/until they fail or don't look right. Monotype Imaging (TYPE) makes sure that doesn't happen often, as it is a leading developer of text imaging software and solutions. Although the shares look reasonably valued today, more success in emerging end-market opportunities could lead to better-than-expected performance down the line.

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Monotype Imaging Looks To Print Money

Thursday, March 14, 2013

Seeking Alpha: Lawson Products Toils Away In Obscurity

I would never say that the industrial maintenance, repair, and operations (MRO) space is wildly popular with investors, but analyst coverage for Grainger (GWW), Fastenal (FAST), Applied Industrial Technologies (AIT), and MSC Industrial (MSM) does at least stretch into the double-digits. By comparison, Lawson Products (LAWS) is barely covered at all.

It takes more than obscurity to make a bargain, though. To that end, I'm concerned about the long history of uninspired financial performance from Lawson, as well as a business model that appears to overlap with many better-positioned rivals without a true, strong core of specialization. On the other hand, management is relatively new here and the MRO market is still scattered enough to let a company like Lawson grow.

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Lawson Products Toils Away In Obscurity

Seeking Alpha: Thinly-Traded Edwards Group Could Outperform On Semi Equipment Pickup

When it comes to companies tied to the semiconductor capital equipment cycle, talking about valuation often feels pretty pointless. Creating accurate long-term models is a Sisyphean task, and the realities of the market mean that the stocks often go much too low in the bad times and much too high in the good times. With that in mind, then, Edwards Group (EVAC) doesn't necessarily jump out as a screaming bargain today, but I suspect that a recovering in the cyclical semiconductor, panel, and LED markets will lead to significant stock performance for a year or two.

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Thinly-Traded Edwards Group Could Outperform On Semi Equipment Pickup

Seeking Alpha: Is Student Transportation Steering Toward A Ditch?

There's a long custom of Canadian companies structuring themselves in such a way that they convey a large percentage of earnings and/or operating income to shareholders in the form of dividends. In days past, these distributions were screened from taxation by companies organizing themselves as royalty trusts (CanRoys), but the Canadian government largely shut that process down years ago.

In any case, Student Transportation (STB) is a Canadian company that provides school busing services in the U.S. and funnels a very large percentage of its cash flow to shareholders in the form of dividends. That has made the company a high-yield option for dividend investors, but I wonder if optimism about the company's yield and future growth prospects has run a little too hot relative to the company's underlying financial performance and valuation.

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Is Student Transportation Steering Toward A Ditch?

Seeking Alpha: Can TearLabs Stay On A Tear?

As I've lamented before, there just aren't many ways for investors to play the ophthalmology market. Aside from a few small biotech/pharma companies and Cooper (COO), the bulk of the industry is locked away within larger companies like Allergan (AGN) and Novartis (NVS). But it's not just scarcity value that makes TearLab (TEAR) interesting. TearLab has developed a quick test for dry eye disease that not only can be done in the doctor's office, but is actually profitable for the doctor to do. With an innovative test and a tried-and-true disposables-based model with a low breakeven level, TearLab could be an interesting small-cap speculation even here after a doubling in the stock.

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Can TearLabs Stay On A Tear?

Wednesday, March 13, 2013

Seeking Alpha: CVD Equipment - Certain Risks And Potentially Significant Returns

I'm a fan of so-called repurposed technologies - technologies that were developed for one industry or application and are then introduced into new areas. In that sense, I'm intrigued by CVD Equipment's (CVV) attempts to bring chemical vapor deposition, a technique/technology long used in semiconductor manufacturing, into areas like solar power, LEDs, med-tech and nanotechnology. While the technologies are different, it's a basic approach that has worked for other companies like FEI Company (FEIC).

Unfortunately, while the basic concept of applying very thin layers of active materials to surfaces holds significant potential in many different end markets, there are many ways to skin a cat and CVD's tiny revenue base suggests that the company hasn't really made major commercial inroads yet. Applications in carbon nanotubes, nanowire, and graphene likewise hold huge theoretical potential, but there are many miles to go before it becomes anything like commonplace or commercial in scale.

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CVD Equipment - Certain Risks And Potentially Significant Returns

Seeking Alpha: Matrix Looks To Multiple Growth Opportunities And Better Margins

It's not too hard to make money investing in companies that make things, but successful investing in companies that build things has proven quite a bit more challenging. Not only is there rampant competition in engineering & construction (E&C) to keep a lid on prices, but many a contractor has run into trouble with cost overruns. All told, this is a sector where the relative few companies that earn decent (or good) returns on capital are more than offset by those who fall short - in other words, this is a sector where picking the right company/stock matters.

Maybe Matrix Service (MTRX) is one of those better picks. The company's recent ROICs haven't been super, but nor have they been terrible. What's more, management seems to have a cogent vision for not only growing the business, but doing so in a profitable way.

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Matrix Looks To Multiple Growth Opportunities And Better Margins

Seeking Alpha: Omeros Doesn't Look Like That Much Of An Opportunity

Biotechnology is hard enough all on its own without investors complicating things with low-potential drugs in difficult markets. With that in mind, I don't see significant opportunity in Omeros (OMER). The company's near-term pipeline for ophthalmology and knee surgery isn't all that promising, and the early-stage pipeline of MASP-2, PDE10, PDE7, GPCR, and PPAR-gamma has far too little supporting data at this point to validate a high valuation or multiple.

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Omeros Doesn't Look Like That Much Of An Opportunity

Seeking Alpha: S&W Seed May Need A Breather, But The Potential Is Enticing

If you didn't grow up in a farm country, chances are the word alfalfa conjures images of either the off-key and cowlicked member of Our Gang or what you feed to rabbits and guinea pigs. As it happens, though, alfalfa is a large global crop worth about $8 billion a year and a major source of food for livestock. While S&W Seed Company (SANW) is a very small company today, the company has big plans to grow through added acreage, new products, and improved value capture.

These shares have had an incredible run, fueled in part by an acquisition and licensing agreement with Monsanto (MON), but likely also a sudden burst of sell-side coverage. While the shares may need to "rest" after a 50% jump over the last three months, it's not hard to generate impressive-looking growth estimates for this company.

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S&W Seed May Need A Breather, But The Potential Is Enticing

Tuesday, March 12, 2013

Seeking Alpha: VeriFone Takes A Big Swing

While investors in VeriFone (PAY) may feel that the board of directors has tolerated operational mistakes for too long already, a far more definite move was made on Monday. After the close, the company announced that CEO Doug Bergeron is stepping down immediately from his role as CEO and leaving the board of directors. This move certainly brings closure to an executive tenure that had recently turned sour, but it also increases the uncertainty of the company's near-term trajectory. On a longer term basis there would seem to be value in the shares, but there's an uncomfortable amount of hope in that thesis.

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VeriFone Takes A Big Swing

Seeking Alpha: Brasil Foods Moving From Tyson Towards Nestle

Lack of ambition has never been a problem at Brasil Foods (BRFS). While over a third of the company's revenue currently comes from commodity meat exports to the Mideast, Africa, and Asia, Brasil Foods has made it abundantly clear that they don't see other Brazilian protein companies like Marfrig or JBS as their true long-term peers, nor American protein companies like Tyson (TSN) or Smithfield (SFD). No, Brasil Foods is playing for larger stakes - looking to become the developing world's answer to Nestle (NSRGY.PK), and they may just be ambitious enough to pull it off.

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Brasil Foods Moving From Tyson Towards Nestle

Seeking Alpha: Arcos Dorados Somewhere Between Gold And Scrap Iron

For the most part, investors can't seem to get enough of Brazilian consumer stocks, bidding many of them up to exceptionally demanding valuations. And to be fair, many of these companies are producing pretty solid growth numbers. In the case of Arcos Dorados (ARCO), though, a combination of sluggish comp-store growth, rampant cost inflation, and fears of competition seem to be combining to create a stock that many investors are pretty ambivalent about today. While it is important that investors not understate the risks to the Arcos business model, I think these shares could be an interesting speculative play at these levels.

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Arcos Dorados Somewhere Between Gold And Scrap Iron

Seeking Alpha: Splunk - The Next Google Or The Next Goner?

Whenever a new company emerges with a target market that is ill-defined, both the bulls and bears dig in and get to work with their respective promotion machines. That brings us to Splunk (SPLK). Can the company's technology and platform for collecting, processing, and analyzing machine data make it a Google (GOOG) of log and config files, or will it just prove to be another not-so-spectacular systems management tool, and one unworthy of a high teens multiple on sales?

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Splunk - The Next Google Or The Next Goner?

Seeking Alpha: Measurement Specialties Doesn't Quite Measure Up

Measurement Specialties (MEAS) is hardly a household name for most investors, as it barely has any sell-side coverage. Even so, the institutions which own nearly 90% of the shares haven't let the stock go unrewarded - like so many other industrial stocks, these shares are close to their 52-week high despite pretty unspectacular near-term expectations. While Measurement Specialties should have ample opportunity to grow its business through customized sensor offerings and increased per-product sensor content, the valuation already seems to incorporate generous growth in the coming years.

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Measurement Specialties Doesn't Quite Measure Up

Sunday, March 10, 2013

Seeking Alpha: Sourcefire's Risk-Reward Seems A Little Out Of Whack

Growing tech stocks rarely look cheap by conventional metrics, and Sourcefire (FIRE) has been an all-too-rare beat-and-raise grower even through this slowdown in enterprise IT spending. Relative to the opportunities and valuations at other security players like Cisco (CSCO), Check Point (CHKP), Fortinet (FTNT), and Palo Alto (PANW), though, it's not so clear that Sourcefire is a major bargain at today's prices. Although the potential addressable market would indeed likely support strong revenue growth and the company's technology could make it an acquisition target, I'm not sure Sourcefire should have this sort of relative valuation.

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Sourcefire's Risk-Reward Seems A Little Out Of Whack

Seeking Alpha: Global Power Equipment Is Either A Big Value Or A Trap

By and large, investors do well for themselves if they assume that something that looks too cheap to be believed shouldn't be believed. Of course, carry that philosophy too far and you miss most of the really impressive turnarounds and long-term growth stories.

That brings me to Global Power Equipment (GLPW). This company has been suffering lately from lower service demand and delayed orders, but nevertheless offers an intriguing mix of sustainable recurring revenue and leverage to natural gas-fired electricity generation expansion. A discounted cash flow suggests significant potential undervaluation, but investors would do well to remember that many power/utility-focused companies have ultimately disappointed relative to their long-range forecasts.

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Global Power Equipment Is Either A Big Value Or A Trap

Seeking Alpha: CBD - Pure Play On Brazil, But With Demanding Expectations

There's really nothing easy about Companhia Brasileira De Distribuicao (CBD), including the explanation of why the company is called both CBD and Pao de Acucar. While this is the second-largest retailer in all of Latin America, and the largest in Brazil, the company has a convoluted and contentious ownership group at a time when the company really needs to be more focused on improving its asset turnover and returns.

The potential here is indeed very impressive, and CBD is one of the few Brazilian consumer stocks that American retail investors can invest in without going to considerable inconvenience (or accepting significant liquidity risk). That said, the stock already incorporates pretty heady expectations for growth and emerging markets are notoriously volatile.

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CBD - Pure Play On Brazil, But With Demanding Expectations

Friday, March 8, 2013

MassDevice: When It Comes To Robots, Opinions Run Hot

Robots may not have emotions, but that's certainly not the case when it comes to the investors, doctors, and other associated people who are involved in the surgical robotics market. From promises that robots open up new avenues in surgery that are better and more comfortable for patients to accusations that robots are dangerous and unnecessary, it often feels like the middle ground is perilously thin these days. While the utilization rates don't point to robots disappearing anytime soon, investors in Intuitive Surgical (NSDQ:ISRG) and Mako Surgical (NSDQ:Mako) are likely looking at plenty of volatility and debate for years to come.

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Thursday, March 7, 2013

Seeking Alpha: HeartWare Is Premium-Priced Growth, But Could Still Go Higher

Just in recent memory, investors have had little problem with talking highly-valued med-tech stories like Edwards Lifesciences (EW), Intuitive Surgical (ISRG), and Cepheid (CPHD) and pushing them even higher on their uncommonly strong revenue growth numbers. Along those same lines, I think HeartWare (HTWR) could continue to head higher, despite an already rich valuation, on news of strong share/unit growth. That said, investors would do well to notice that the three aforementioned stocks have all had periods where the stock sold off pretty sharply (and pretty quickly), so HeartWare is not for the faint of heart.

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HeartWare Is Premium-Priced Growth, But Could Still Go Higher

Seeking Alpha: Kaydon's Strong Niche Focus Doesn't Produce Quite Enough Value

I love somewhat obscure and under-followed industrial companies, particularly when they are leaders in their markets and have quality investors like Royce & Associates on board. That said, I find it hard to find a lot of value in Kaydon (KDN) shares today. Although the company has considerable market share and pretty solid margins, the bottom-line return on capital and free cash flow generation just aren't quite where they need to be relative to valuation to make this a must-own right now.

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Kaydon's Strong Niche Focus Doesn't Produce Quite Enough Value

Seeking Alpha: Tangoe Doesn't Look Like A Must-Own SaaS Stock

Whenever there's a new sector or market within technology creating a buzz, companies come out of the woodwork to attach themselves to the excitement. I fear that may be the case with Tangoe (TNGO). While there could be a real market, and a real opportunity, for enterprise telecom expense management (TEM), I'm not sure that Tangoe's approach is really software-as-a-service (SAAS) as opposed to more traditional business process outsourcing (BPO). With what looks like a potentially limited addressable market and some questions about long-term margins, Tangoe's value proposition just doesn't entice me to take the plunge with my own money.

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Tangoe Doesn't Look Like A Must-Own SaaS Stock

Wednesday, March 6, 2013

Seeking Alpha: Aspen Pharmacare Offers Very Expensive Developing World Growth

Aspen Pharmacare (APNHY.PK) is likely to be a very frustrating stock to many SA readers. While this company may be one of the best publicly-traded plays on the growth of the healthcare markets in Africa, Latin America, and Asia, the stock already sports a very steep multiple. What's more, its ADR shares are incredibly illiquid in the U.S., and only the Johannesburg-traded shares (APNJ.J) offer much liquidity. But for investors who can be patient, an opportunity to acquire shares in this company could be one of those rare once-in-a-decade opportunities.

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Aspen Pharmacare Offers Very Expensive Developing World Growth

Seeking Alpha: Sun Hydraulics May Be Special, But The Valuation Isn't

With Sauer-Danfoss (SHS) having accepted a buyout offer from Danfoss A/S, I will soon need to replace a stock in my portfolio, and Sun Hydraulics (SNHY) is a name that I've had my eye on for some time. While many companies talk about valuing their employees and seeking innovative solutions for their customers, Sun seems to actually do it. Unfortunately, the qualities of this company have not gone unnoticed, and Sun is not exactly a bargain bin option.

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Sun Hydraulics May Be Special, But The Valuation Isn't

Seeking Alpha: Quirky Raven Has The Quality, But Not So Much Value

The word quirky probably doesn't do justice to Raven Industries (RAVN), as this small conglomerate is a leader in such disparate markets as reinforced plastic sheeting, GPS-based controls for agricultural equipment, and high-altitude balloons. While Raven has consistently generated strong returns on capital, the free cash flow hasn't been as consistent or impressive. With meaningful exposure to markets like energy and government and what looks to be a premium valuation, I think investors may do better to wait before making a major commitment to Raven with their own capital.

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Quirky Raven Has The Quality, But Not So Much Value

Tuesday, March 5, 2013

Seeking Alpha: Ingenico Seems To Be Gaining An Edge In Payments

Credit and debit card transactions only continue to grow, but investors have clearly tired of VeriFone's (PAY) uninspiring performance and management missteps. That leaves investors looking to payment processors like Heartland Payment Systems (HPY) or Global Payments (GPN) to play the trend, or European payment and security companies like Gemalto (GTOMY.PK) and VeriFone's co-duopolist Ingenico (INGIY.PK). Unfortunately, not unlike VeriFone a little while ago, it looks like the market already expects a very full growth outlook for Ingenico.

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Ingenico Seems To Be Gaining An Edge In Payments

Seeking Alpha: Luminex Has Both Many Opportunities And Many Questions To Answer

While I'm not opposed to paying up for a strong growth story, particularly in an area like molecular diagnostics (MDx), I think there are too many questions about the basic business model at Luminex (LMNX) to pay up for this stock today. The company does indeed have significant potential and large addressable markets, but the combination of inherent business model volatility, less than full control on product development, and rampant technological and commercial competition are all significant factors as well.

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Luminex Has Both Many Opportunities And Many Questions To Answer

Seeking Alpha: Ultratech Ultrainteresting

While a very strong year for the stock has propelled Ultratech (UTEK) above $1 billion in market cap, this is still far from a household name in semiconductor equipment. That could still work in investors' favor, as Ultratech addresses several appealing markets with above-average growth potential. Although valuation does look a little stretched, waiting for this stock to get meaningfully cheaper could be in vain as it offers a clean balance sheet, solid growth prospects, and leverage to improving capital spending in the chip space.

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Ultratech Ultrainteresting

Seeking Alpha: Apple Vs. Samsung - Avago Wins Either Way

Although many investors, analysts, and writers are deeply invested in the "Apple (AAPL) versus Samsung (SSNLF.PK)/the field" battle, I really don't care who wins. Instead, I try to find companies that can prosper from the overall growth in next-gen wireless devices, and Avago (AVGO) looks like a good candidate. While Apple certainly matters to Avago, I like the company's broader exposure to the handset market, not to mention what I believe to be undervalued opportunities in wired infrastructure and industrial/automotive markets.

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Apple Vs. Samsung - Avago Wins Either Way

Monday, March 4, 2013

Seeking Alpha: FEMSA Just Keeps Rolling

Just about everything seems to be working in favor of FEMSA (FMX) these days. Not only have volumes and margins continued to improve in the Coca-Cola FEMSA (KOF) business, but the company's OXXO stores are lapping the competition in terms of comp-store growth. With new opportunities in Southeast Asia, pharmacies, and financial services, the growth outlook for this Mexican consumer conglomerate looks quite solid.

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FEMSA Just Keeps Rolling

Seeking Alpha: AtriCure's Frustratingly Slow Build Hides Value Beneath

Many investors like to believe that all a med-tech company has to do is develop a product for an under-served market, secure FDA approval, and then sit back and count the money as it rolls in. If only it were so easy. Marketing is often overlooked as a primary challenge, as new therapies often require doctors to change their routines and practices and may threaten older, profitable ways of doing business.

That seems particularly relevant in the case of AtriCure (ATRC). While AtriCure has a good suite of products to treat atrial fibrillation, uptake has been slow and the company is still below the $100 million barrier in annual revenue. Although it's going to take time and patience for this company/stock to work on its own, the market opportunity is real and investors shouldn't ignore the potential that AtriCure attracts a bid from a larger med-tech player.

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AtriCure's Frustratingly Slow Build Hides Value Beneath

Friday, March 1, 2013

Seeking Alpha: BroadSoft Broadsides Investors

Growth stocks have a relationship with Wall Street not unlike that between mobsters and their "clients" - namely, "give us the growth … or else." Unfortunately for BroadSoft (BSFT) investors, the company had little choice but to go with "or else" with its guidance for 2013. As revenue growth appears to be flattening, the biggest question now is whether it's a pause or the warning sign that the BroadSoft growth story isn't what investors thought it was. While I'm inclined to believe that this is a pause and not a stop, investors need to appreciate the above-average risk and volatility in this name.

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BroadSoft Broadsides Investors

Seeking Alpha: Globus Medical Has The Growth, But What About Value?

On first glance, Globus Medical (GMED) looks like it could be one of the unicorns of the med-tech space - a legit growth story that the market hasn't already pushed up to a red-hot valuation. Globus has what seems to be a sustainable culture built around product innovation, and that steady stream of innovative products could be just the ticket for success in a price-constrained implant world. That said, valuation isn't quite the slam-dunk that value investors may hope to see.

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Globus Medical Has The Growth, But What About Value?

Seeking Alpha: Joy Global Tries To Beat The Cycle With Better Margins

The mining equipment industry is in a cyclical rough patch. This is not news; we've heard similar information from Caterpillar (CAT) and Atlas Copco (ATLKY.PK) among others, and the signs of a slowdown at Joy Global (JOY) have been apparent for some time. With the magnitude and timing of a significant recovery both key unknowns, one of the critical factors for Joy Global in the interim will be solid operating performance. News has been encouraging on that front, but investors have to be pretty bullish on the long-term outlook for the mining sector to see major value in Joy Global shares today.

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Joy Global Tries To Beat The Cycle With Better Margins

Seeking Alpha: Patience With Weatherford Should Pay Off

Energy services company Weatherford (WFT) has shown it has ample capabilities in digging deep holes - both for its oil and gas clients and for investors. Years of "growth at any cost" spending, lax (if not wholly inadequate) accounting, and various other accounting misdeeds created some large problems that have been coming home to roost more recently.

There looks to be a light at the end of the tunnel, though, and I don't believe it's an oncoming train. Weatherford has largely cleaned up its tax issues, appears close to resolving its internal accounting control problems, and should soon have closure on matters related to illegal transactions with sanctioned countries. More significantly, management has smartened up about capital allocation and profitable growth, and divestitures should lead to a more focused, more profitable, and less debt-ridden firm.

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Patience With Weatherford Should Pay Off