Investopedia: Can E.On Maintain Its Fat Dividend Through A Difficult Restructuring?

Experienced dividend investors know better than to just take a fat dividend yield for granted. While there certainly are opportunities every so often to pluck an overlooked or underappreciated income story, oftentimes high yields are best read as a flashing “danger” sign.

That brings me to German utility company E.On (Nasdaq:EONGY). A dividend yield of nearly 9% is certainly attractive these days, but E.On is still in the early years of a difficult transition that is seeing the company cut costs and scale out of its traditional generation business in favor of newer opportunities like renewable generation, oil/gas exploration, and overseas generation. On balance I'm bullish on E.On's prospects for remaking itself over the next three years, but I would caution investors that the dividend could get cut, and possibly cut substantially, before the process is complete.

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Investopedia: Easy To Like Everything About Kubota Except The Price

There's a lot working in Kubota's (OTC:KUBTY) favor these days. The lower value of the yen makes its products cheaper, while rising incomes across Asia make its agricultural equipment more attainable. Add to that a recovery in the U.S. housing market (where the company sells a lot of lawn equipment) and a stated goal to expand the dry land business, and there are multiple attractive growth drivers. The problem? It's just not possible to run an attractive valuation on a discounted cash flow basis, and I can't reconcile the idea of paying a 40% to 100% premium (in forward EV/EBITDA terms) for Kubota compared to Cummins (NYSE:CMI), Deere (NYSE:DE), AGCO (Nasdaq:AGCO), or CNH (NYSE:CNH).

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Investopedia: Waiting For Hormel To Get Cheaper Isn't Getting Any Easier

Once in a while even the best-loved food and beverage companies will sell off on concerns about organic growth trends or margin worries. So far, though, it looks like Hormel (NYSE:HRL) is largely immune, as although margins came up a little light this quarter, the Street seems willing to look past one quarter and remain focused on the attractive, higher-margin business management is building.

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http://www.investopedia.com/stock-analysis/082213/waiting-hormel-get-cheaper-isnt-getting-any-easier-hrl-krft-hsh-tsn.aspx

Investopedia: Hain Celestial's Valuation Already Incorporates Strong Expectations

Even as someone who isn't all that interested in the “healthy lifestyle” trends of today, I find it interesting to see the sort of visceral reactions that stocks like Hain Celestial (Nasdaq:HAIN), White Wave (Nasdaq:WWAV), and Annie's (Nasdaq:BNNY) provoke in investors/readers. In particular, there appears to be a very vocal percentage out there that are just incensed over the valuation and attention these stocks get and absolutely insistent that healthy/organic eating is just a fad.

Whether it's a fad or not (I happen to lean toward “not”, even though I don't participate), there's no question that these stocks have generated some sizable expectations on the Street. As one of the veterans of the sector, Hain Celestial is a good case in point – today's valuation already more than incorporates assumptions that Hain will significantly outgrow the packaged food sector and generate above-average long-term profits. So much so, in fact, that I find it hard to see how the company can live up to (or grow into) these expectations.

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http://www.investopedia.com/stock-analysis/082213/hain-celestials-valuation-already-incorporates-strong-expectations-hain-wwav-krft-k.aspx

Investopedia: HP Still Looks Cheap, But Execution Issues Are Part Of The Reason Why

There's a big difference between “cheap” and “cheap for a good reason”, and it's not always easy to tell the two apart. While Hewlett-Packard (NYSE:HPQ) shares still appear to be undervalued on the expectation of any growth at all, the ongoing execution issues do mean that a return to growth shouldn't be taken for granted. At a minimum, there's still quite a lot of work for management to do make this turnaround a success, and I do have my concerns about the the effect of competition on those plans. On the other hand, today's valuation doesn't exactly presume that those efforts will end in major success.

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Investopedia: Abercrombie & Fitch The Latest To Get Trampled

This is turning out to be a cruel summer for teen retailers, with Abercombie & Fitch (NYSE:ANF) the latest to report very disappointing results and weak guidance. With the A-list retailers all struggling (ANF, American Eagle (NYSE:AEO), and Aeropostale (NYSE:ARO)), it's pretty clear that traffic and promotions are having a seriously adverse impact on many retailers. While the results from companies like Urban Outfitters (Nasdaq:URBN) and Buckle (NYSE:BKE) say that it's not a wholesale wipe-out in the sector, it's pretty clear that Abercrombie & Fitch continues to face some serious challenges in turning around its comps.

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Investopedia: American Eagle Hammered As Conditions Worsen

To me, the biggest question coming out of American Eagle's (NYSE:AEO) poor second quarter and weak guidance is whether or not there's an overall traffic problem at the malls. If traffic is down across the board (and there's some evidence that that may be the case), this is just another one of those bad stretches that every apparel retailer has to deal with now and then. If the traffic patterns are more inconsistent, though, and some really outperform, it sets up a whole new round of questions about merchandising, brand value, and long-term margins.

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Investopedia: History Suggests Street Will Get Over "Disappointing" Smucker Results

I don't want to spend too much time defending Smucker's (NYSE:SJM) fiscal first quarter results, as I thought they were fine. Still, the Street is likely to be concerned about the pace of growth in K-Cups and the question of whether the company can maintain its significant share in the retail coffee business against the likes of Kraft (Nasdaq:KRFT), Green Mountain (Nasdaq:GMCR), and Starbucks (Nasdaq:SBUX). To the extent that history is any indication, I expect Smucker shares will be fine, though the valuation has gotten a bit steep in a still-expensive packaged food sector.

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Investopedia: A Solid Beat-And-Raise As Lowe's Closes Some Of The Gap

While neither Home Depot (NYSE:HD) nor Lowe's (NYSE:LOW) were exactly what I thought of as “cheap” a quarter ago, I did think Lowe's looked like the better buy as I believed the Street would start factoring in improving operations and more HD-like performance. That call seems to have worked out, as Lowe's shares outperformed Home Depot by nearly 15% over the last quarter. As Lowe's still looks cheaper than Home Depot and has more upside to operational improvements/outperformance, I would probably stick with Lowe's over Home Depot, but almost anything house-related in retailing seems strong these days.

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http://www.investopedia.com/stock-analysis/082113/solid-beatandraise-lowes-closes-some-gap-low-hd-whr-bby.aspx

Investopedia: Canadian Dilution And Sluggish U.S. Shopping Bring Target A Little Wide Of The Mark

When Wal-Mart (NYSE:WMT), Target (NYSE:TGT), and Costco (Nasdaq:COST) all see relatively uninspiring same-store sales growth trends, I think it's safe to say the U.S. retail market is not in the best of health. Although Target continues to take steps that should improve the company's long-term competitiveness and growth profile, Wall Street is generally very much focused on the now and underperformance creates some challenges for the shares.

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Investopedia: Intuit Refocusing On What It Does Best

A quarter ago, I thought that Intuit (Nasdaq:INTU) was underestimated and underappreciated by the Street. True, the company was (and is) facing challenges in getting the consumer tax business back to better growth and not all of the company's efforts to diversify and grow the business had worked out to plan. But Intuit still has a valuable business with strong market share that produces almost annuity-like cash flow streams. While the shares have outperformed the S&P 500 by about 10% since my last bullish call, I remain confident that there's more to be gained from the company's strategic readjustment.

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Investopedia: Analog Devices' Slow Walk To Better Days

The still-awaited semiconductor recovery is certainly taking its sweet time in getting here. In the meantime, Analog Devices (NYSE:ADI), one of the leaders in the analog space, remains in something of a holding pattern. Although the stock has done pretty well as investors look forward to better utilization driving higher margins and larger cash returns to shareholders, the business is still waiting to see sustained demand improvement in its end markets.

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Seeking Alpha: Even After A Big Run, The Housing Recovery Can Take Techtronic Higher

Plenty of stocks tied to housing in one form or another have enjoyed strong rebounds, and toolmaker Techtronic (NASDAQ: TTNDY.PK) is no exception, as the shares have climbed almost 60% this year and nearly 1,000% from the depths of the housing/credit crash. With the remodeling/renovation market only just recovering and new housing construction still to come back, Techtronic should be looking at several years of above-average growth just on the recovery trade.

There's more to Techtronic than just a U.S. housing recovery. Techtronic has started to show progress in dealing with lagging margins and the company has barely scratched the surface of its opportunity in markets like Europe. Although these shares can respond violently to updates on the U.S. housing market, another 25% in the shares seems to be attainable on only relative modest margin improvement assumptions and fully executing on the opportunities in margins and Europe could send the shares as much as 50% higher.

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Even After A Big Run, The Housing Recovery Can Take Techtronic Higher

Investopedia: Will Immunotherapy Disrupt The Oncology Market?

Goldman Sachs' recent list of eight "disruptive technologies" included new therapies to fight cancer, drugs that promise to upend the pharma industry in the next few decades. Most promising is immunotheraphy, an approach being researched and advanced by Bristol-Myers (NYSE:BMY), Merck (NYSE:MRK), and Roche (Nasdaq:RHHBY), among others. While these drugs aren't cancer cures, they appear to be on pace to deliver significant improvements in the length of time cancer patients can expect to live, with a relatively tolerable side-effects.

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http://www.investopedia.com/articles/investing/082013/will-immunotherapy-disrupt-oncology-market.asp

Investopedia: Home Depot Moves From Good To Great

While it shouldn't really surprise anybody if there's a little volatility or turbulence along the way, it looks like the long-awaited remodeling upturn is firmly in place now. Not only did Home Depot (NYSE:HD) trounce expectations for same-store sales growth, but companies like American Woodmark (Nasdaq: AMWD), RPM (NYSE:RPM), and Stanley Black & Decker (NYSE:SWK) are seeing improved prospects as well. While these shares didn't do much over the last three months and the valuation is not what I'd call “screaming bargain”, I wouldn't step in front of the momentum with my own money.

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http://www.investopedia.com/stock-analysis/082013/home-depot-moves-good-great-hd-low-swk-rpm.aspx

Investopedia: Medtronic Marking Time

These aren't the glory days for med-tech giant Medtronic (NYSE:MDT), as fiscal 2014 will be a pretty weak year from a growth perspective ahead of some significant new product launches in 2015. Even with a high-quality name like Medtronic, that lack of growth can lead to shares languishing as investors are attracted to (or distracted by) more impressive-looking stories in the short term. Although I'm not a passionate bull on Medtronic shares by any stretch, the stock is pretty much what passes for a bargain these days in the larger segment of this industry and I think it's a respectable core holding.

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Investopedia: Plenty Left To Do, But Signs Of Progress At Best Buy

I know that the skeptics on Best Buy (NYSE:BBY) are going to look at Tuesday's results and ask “What recovery?” After all, comps are still declining and gross margins are still down on a year-over-year basis. What's more, the apparent erosion in high-end mobile demand is a sizable threat to a company that gets a lot of revenue from mobile devices. On the other hand, nobody should have believed that Rome would be rebuilt in a day, and Best Buy continues to deliver on multiple points of its recovery plan.

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http://www.investopedia.com/stock-analysis/082013/plenty-left-do-signs-progress-best-buy-bby-amzn-msft-sne.aspx

Investopedia: International Rectifier Recovering, But Margins Need To Pick Up

Investors in semiconductor stocks have been waiting for almost two years for signs of sustained (or sustainable) improvements in the industry. Companies as varied as ON Semiconductor (Nasdaq:ONNN), Analog Devices (NYSE:ADI), and International Rectifier (NYSE:IRF) have been showing some signs of progress, though it seems like every quarter's guidance is fraught with uncertainty. While International Rectifier reported a quarter with strong sequential revenue growth and better margins, additional margin and cash flow generation improvement is necessary if this stock is going to continue its recovery.

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http://www.investopedia.com/stock-analysis/082013/international-rectifier-recovering-margins-need-pick-irf-ifnny-onnn-stm.aspx

Investopedia: Workday Working Some Major Market Mojo

One way or another, Workday (Nasdaq:WDAY) is going to be a fun stock to watch. Investors angered by the rich valuations once awarded to Salesforce.com (NYSE:CRM), and there certainly were plenty of them, are probably going to be apoplectic over the valuation on the shares of this fast-growing SaaS enterprise software vendor. Although I can't conceive of a credible scenario in which these shares look anything close to fairly valued, I do believe the company will be quite successful and the interplay between the company's rapid growth and share gains in the enterprise resource management/planning (ERM/ERP) market and its valuation in the stock market will be very interesting to watch over the next few years.

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Investopedia: NCR Transforming, But The Street Seems Up To Speed

NCR (NYSE:NCR) has already gone a long way toward transforming itself from a tired, slow-growing manufacturer of ATM and point of sale (POS) hardware to a more dynamic payments technology company. In addition to addressing client needs for more front-end productivity, NCR has really augmented its faster-growing software and service operations. The only downside to the story is valuation, as today's valuation already assumes that these moves will meaningfully upgrade the company's future cash flows.

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Investopedia: Veolia Offers A Decent Dividend, But Both Uncertainty And Upside

When last I wrote about European utility company Veolia (NYSE:VE) for Investopedia (back in March of 2012), I was cautious about the near-term prospects on the stock given the Street's likelihood of buying into (or rather, not buying into) the company's asset disposal and cost-cutting plans. The stock then proceeded to lose about one-third of its value over the next nine months, as worries about both management's ability to execute and the health of Western Europe's economy weighed on shares.

As this was happening, though, the company actually started making progress, and the shares have been moving up strongly since mid-summer as the Street has finally started buying the turnaround story. From where Veolia sits today, I see both opportunity and risk – I happen to side with the bulls who believe management will succeed in its cost-cutting targets, but I also have my worries about the extent to which the company may have to surrender these benefits to customers in order to maintain the business. All told, I see only modest upside to the shares right now, but the dividend isn't bad and I think the company can contain most of the risks it faces.

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Investopedia: Arcos Dorados Still Several Fries Short Of A Happy Meal

Investors who bought Arcos Dorados (Nasdaq:ARCO) thinking they were getting McDonald's-like (NYSE:MCD) consistency with a Latin American growth kicker have been badly surprised over the past year, as Arcos Dorados' performance has lagged its franchiser's performance by roughly 25%. A lot of what has hurt the company is arguably out of management's control, as weakening consumer conditions across much of Latin America (including Brazil and Mexico) and persistent inflation make operations much more challenging. Although these shares do appear undervalued relative to their long-term potential, management has a lot of work to do to realize that potential.

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Investopedia: Corning's Always-Frustating Mix Of Opportunity And Risk

I will always have a soft spot for companies like Corning (NYSE:GLW). I'm a science geek at heart, and what Corning has accomplished time and time again in materials science is impressive to say the very least. But then there's the other side of the equation – brutal competition and capital spending cycles that create boom/bust cash flows and returns on capital. Although I do see some risks to the handset and TV markets, and the free cash flow model doesn't scream “cheap”, I wouldn't bet against this stock for the long term.

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http://www.investopedia.com/stock-analysis/082013/cornings-alwaysfrustrating-mix-opportunity-and-risk-glw-aapl-auo.aspx

Seeking Alpha: OMV's Transformation Should Unlock Meaningful Value

One of the most rewarding things about writing about stocks is when you write a piece, make certain specific predictions, and then see those come to fruition. In contrast, one of the most frustrating things is to have a piece all lined up and ready to go and then see one of your big predictions come true before your piece gets published. That has happened to me now on OMV (OMVKY.PK), as the company announced Monday that the company had reached a potentially transformative $2.7 billion deal with Statoil (STO).

The good news is that my basic thesis on OMV still holds - OMV looks like a significantly undervalued European energy major with catalysts to drive better performance in the coming years. Not only does the acquisition of North Sea assets from Statoil significantly improve the odds that the company will meet its long-term production growth goals (something the Street was incredibly skeptical about), but OMV remains a strong free cash flow-generating major with a low breakeven price and capacity for additional farm-ins as circumstances allow. All told, I believe these shares should trade more than 30% higher than they do today.

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OMV's Transformation Should Unlock Meaningful Value

Investopedia: Nordstrom Shows That Even The Best Can Struggle A Bit

It's hard to find new positive things to say about Nordstrom (NYSE:JWN). This high-end retailer has long stood out from the crowd with its sharp-eyed merchandising, high inventory turns, flexible operating model, and above-average returns on capital. Couple that with a still-growing Rack store concept and e-commerce opportunities, and it's hard to ever get too negative on this company. On the other hand, Nordstrom's excellence has been well-known for years and this second quarter shows that even well-run retailers can struggle to make headway in the face of a tougher consumer spending environment.

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Investopedia: Applied Materials Still Waiting For Orders To Materialize

Applied Materials (Nasdaq:AMAT) is an interesting company (and stock) today. With 3D chips on the way, it looks like the semiconductor equipment industry is looking at both a large increase in orders and a change in the sort of equipment that chip companies will need to stay on the leading edge. With strong share in equipment categories that should be essential to FinFETs, Applied Materials should be looking some strong years. But as this quarter highlights pretty clearly, there are a lot of unknowns about timing and investors are still a little hesitant about bidding up these shares ahead of the next cycle.

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Investopedia: Dell Scratching And Clawing For Share

The situation around Dell (Nasdaq:DELL) continues to churn, as the company scratches, claws, and fights for market share and relevance in its end markets, with Carl Icahn spearheading efforts to disrupt the planned go-private transaction. While Dell has shown that it can improve revenue by trading margin for share, it's unclear to me that the company can win over the long-term with this strategy. As I think management overestimates the extent to which customers will stick with them, and that there are competitors better suited to win on both the price/margin and feature/performance ends of the spectrum, I see Dell stuck in a long-term squeeze play that makes value creation very difficult.

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http://www.investopedia.com/stock-analysis/081913/dell-scratching-and-clawing-share-dell-hpq-ibm-lnvgy.aspx

Seeking Alpha: Microsemi Not Quite To Plan, But Still Improving

Owning Microsemi (MSCC) is an interesting experience. For a company that is pretty small and obscure by most standards, there's a surprising number of people who want to bash the company and claim that its success is only due to the fact that it is, in many cases, the only approved supplier of a particular component.

Let the haters hate - I'm firmly in the black with these shares and the trailing performance compares quite nicely with the semiconductor sector as a whole, not to mention individual rivals like Silicon Labs (SLAB), Fairchild (FCS), and Semtech (SMTC). What's more, the company is built upon a continuous flow of new products, coupled with moves to unlock more operating leverage from the operations. Although these shares are close to my fair value, and I have considered selling them in favor of owning a more undervalued chip stock, a recovery in multiple end-markets could drive higher performance from here.

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Microsemi Not Quite To Plan, But Still Improving

Seeking Alpha: ON Semiconductor - If It Stops Getting Worse, It Could Get So Much Better

In Hollywood, asking "How can it get any worse?" aloud is a sure way to get either a comedic or horrific answer in the next scene. In the case of large chip maker ON Semiconductor (ONNN), a lot of things have gone wrong over the past couple of years. In addition to a deal for SANYO Semiconductor ("Sanyo") that just keeps looking worse and worse, ONNN has been hit by both the general slowdown in chip demand and the particularly weak conditions in computing and consumer electronics.

With all of the bad news and adverse developments, it's easy to overlook some positives that could start working in the company's favor and relatively soon at that. ONNN is a top four/top five player in multiple large markets (transistors, diodes, analog), and the company is actively working to move up the value chain. Given the company's low utilization rate and stabilizing Sanyo performance, the company would seem to have significant margin leverage potential - potential that generate free cash flow growth way ahead of revenue growth and support a fair value of $10 or higher.

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ON Semiconductor - If It Stops Getting Worse, It Could Get So Much Better

Investopedia: Consumer Spending Looking Bleaker For Wal-Mart

It seems like hopes for a strong back-to-school season (not to mention a more general spending recovery overall) are fading away for Wal-Mart (NYSE: WMT). Weak consumer spending may not be a huge surprise this quarter, but I found it interesting that the company also lost some operating leverage. In any case, while Wal-Mart really isn't the sort of stock to buy or sell on the basis of one quarter, but I find the valuation and potential here to be pretty underwhelming on the whole.

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http://www.investopedia.com/stock-analysis/081513/consumer-spending-looking-bleaker-walmart-wmt-tgt-aeo-amzn.aspx

Investopedia: NetApp Underwhelms, But Still Looks Undervalued

There is a risk that investors and analysts are going to start viewing NetApp (Nasdaq:NTAP) less as an undervalued tech stock in an attractive market and more of a “cheap for a reason” underperformer that has gone about as far as it can against its major rival EMC (NYSE:EMC). I don't really share that view per se, but it's harder to argue for the bull case on NetApp when the company continues to leave the Street wanting more.

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http://www.investopedia.com/stock-analysis/081513/netapp-underwhelms-still-looks-undervalued-ntap-emc-ibm-hpq.aspx

Investopedia: Agilent Grinding Through Challenging Market Conditions

It may not look like it on the basis of the last few quarters, but Agilent (NYSE:A) is getting better. Weakness in multiple test and measurement end-markets and lower government spending are generating stiff headwinds, but the company continues to roll out strong new products, and the long-term potential in chemical analysis and diagnostics remains impressive. Even though Agilent is near a 52-week high, I believe shareholders could still do reasonably well with this stock, particularly if their investment horizon is more than just a quarter or two.

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http://www.investopedia.com/stock-analysis/081513/agilent-grinding-through-challenging-market-conditions-dhr-tmo-jdsu.aspx

Investopedia: The Market's Panic On Cisco Seems Overdone

Over time you eventually get used to the idea that the market seldom looks past one or two quarters (except, of course, when it's convenient to do so). So insofar as that goes, I can see how some investors may have listened to the Cisco (Nasdaq:CSCO) conference call, thought they heard a sniffle or two, and rushed to hit the panic button. Though I'm not going to say that Cisco is fully out of the woods and everything is wonderful again in IT-land, I think the long-term valuation on Cisco is getting pretty interesting now.

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http://www.investopedia.com/stock-analysis/081513/markets-panic-cisco-seems-overdone-csco-jnpr-hpq-ibm.aspx

Investopedia: Deere May Be Getting Too Little Credit

The ways things are in the market today, whenever I see an industrial stock that seems to be undervalued by 15% or more, I start wondering what I missed or did wrong in my modeling. While I do believe the North American ag equipment market may well go negative next year, I think the Street may be too down on Deere (NYSE:DE) shares. A combination of weak ag next year and no real construction recovery in sight is grim, yes, but it seems as though investors have been a little gentler with Caterpillar (NYSE:CAT) and Cummins (NYSE:CMI) through their downturns. I'm hesitant to buy into what looks like a bearish and skeptical tape, but Deere is starting to creep up the ranks of my list of value-priced quality stocks.

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http://www.investopedia.com/stock-analysis/081513/deere-may-be-getting-too-little-credit-de-cnh-cat-cmi.aspx

Investopedia: Pricing Still A Long-Term Risk, But Illumina Continues To Build A Sequencing Fortress

Between the disruptions created by Thermo Fisher's (NYSE:TMO) acquisition of Life Technologies, Roche (Nasdaq:RHHBY) all but raising the white flag in sequencing, and Oxford Nanopore's ongoing commercialization challenges, Illumina (Nasdaq:ILMN) continues to build on its already considerable lead in the sequencing space. I do maintain my concerns about the company's ability to maintain pricing on a long-term basis, as well as reimbursement pressures in diagnostics, but it's hard to find much fault with a business that can be driven by ongoing sales of high-margin reagents and consumables.

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http://www.investopedia.com/stock-analysis/081513/pricing-still-longterm-risk-illumina-continues-build-sequencing-fortress-ilmn-tmo-brkr-rhhby.aspx

Investopedia: Expectations, Not Performance, Eclipse Cree

It's pretty rare for a company at the leading edge of an emerging technology to have a smooth growth trajectory, and LED leader Cree (Nasdaq:CREE) has certainly had a few wobbles over the years. That said, Cree has established itself as one of the “Big Five” LED chip companies, one of the three major integrated LED lighting companies, and a leader in patents and technologies. Couple that with a greater than 10-year run of positive free cash flow and it's not hard to see why Cree is a go-to name for growth investors.

That popularity comes with a cost, though. It's exceedingly rare to see a company's stock rise more than 150% in 12 months and still have modest expectations and/or an undemanding valuation attached. Given that margins are a pressing concern with Cree and the company's guidance for the next quarter looked light, it's not too surprising to see the shares indicated down in pre-market trading.

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Investopedia: JDSU's Results Highlight The Volatility Of The Telco Capex Recovery

Happy days are here again in the telecom capex market, right? After all, companies like Juniper (Nasdaq:JNPR), Ciena (Nasdaq:CIEN), and Finisar (Nasdaq:FNSR) have seen their stocks shoot up over the last three months, and even Alcatel-Lucent (NYSE:ALU) is looking viable again. Certainly if Alcatel looks like it could make it, the market must be improving, right?

Well, yes and no. Spending is still lumpy and idiosyncratic, and there are gaps between what companies are saying about orders (and what analysts/investors are projecting for 2013/2014) and what's actually happening in the here and now. And that's where JDSU's (Nasdaq:JDSU) earnings come into play – JDSU didn't have a bad quarter and management sounds optimistic about the recovery, but the actual business still needs time to come around. Of course, those investors who think they can just wait until they see the recovery in the financials before they buy the shares may well find that most of the gains have already gone to others by then.

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Seeking Alpha: A Beat's A Beat, But Brocade Still Needs More Growth

Tuesday night had to be satisfying for Brocade (BRCD) shareholders. The stock has been strong over the past three months (up almost 40%) despite a twitchy Nasdaq and at least two downgrades to "Underperform," and Brocade topped that off with a beat-and-raise fiscal third quarter.

Brocade is already making clear progress on its efforts to restructure and reduce operating costs. What's less clear is the growth trajectory of its storage and IP networking businesses. Better than expected performance in storage is encouraging, and predictions of the rapid demise of this business are likely premature, but the IP networking business still has a ways to go. All of that said, Brocade shares still appear quite cheap on a discounted cash flow basis - if the company can preserve or rejuvenate the storage business and find a better match between its IP networking technology and its targeted customer verticals, these shares could still do quite well from here.

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A Beat's A Beat, But Brocade Still Needs More Growth

Seeking Alpha: Tullow Hasn't Forgotten How To Find Oil, And The Shares Look Too Cheap

Exploration-focused oil and gas companies can give investors a wild ride. That has definitely been the case at Britain's Tullow Oil (TUWOY.PK), as uncommon drilling success built the company into Europe's largest independent, only to see the shares fall more than 20% over the past year on multiple poor results of its exploration program.

I believe that while finding oil is a "win some, lose some" sort of game, Tullow has proven over the years that it will win more than its share. With a strong core expertise in petroleum geology and demonstrated discipline in license acquisition, coupled with a rich portfolio of exploration assets, I believe that Tullow can regain some of its luster and that the shares are 30% to 40% too cheap even if future drilling success rates can't match the company's past levels.

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Tullow Hasn't Forgotten How To Find Oil, And The Shares Look Too Cheap

Investopedia: CA Getting Some Benefit Of The Doubt, But It Must Deliver Growth

I carried the “CA Technologies (NYSE:CA) is too cheap” torch for a while, and though the stock is up about 20% since my last article, better than IBM (NYSE: IBM) and in line with Oracle (Nasdaq:ORCL), the nearly 10% underperformance relative to the S&P 500 precludes any victory dance. On the other hand, the stock is well ahead of the S&P 500 on a year-to-date basis, and it sounds like the Street is increasingly on board with CEO Michael Gregoire's plans to reinvigorate growth at this large enterprise software company.

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Investopedia: BlackBerry Finally Looking For A Bidder, But Will A Real Buyer Bite?

It looks like an outbreak of rationality has hit BlackBerry (Nasdaq:BBRY), as the company announced on Monday that it had formed a special committee to “explore strategic alternatives” for the struggling handset company. While the company's announcement mentioned options like joint ventures, partnerships, and alliances, shareholders, analysts, and investors are are zeroing in almost exclusively on the possibility of a sale.

If BlackBerry is serious about a sale, it'll happen. I have no doubt that, at the right price, the company can find a buyer willing to take on the not-inconsiderable task of turning around this struggling high-end handset company. The trick is going to be that “at the right price” part. BlackBerry's enterprise value (that is, market capitalization net of cash and debt on the balance sheet) isn't very large, but any buyer is looking at a likely multi-year restructuring/turnaround program that will require capital, compress margins, and offer only uncertain payoffs.

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Investopedia: Danaher Could Be Loading Up For A Bigger 2014

In a pretty lackluster industrial environment, Danaher (NYSE:DHR) continues to hold its own. The company's organic revenue and segment profit growth are squarely in the middle of the pack, but that's fine – Danaher is almost always in the middle, while the leaders and laggards move all over the board through the economic cycle. More to the point for investors, Danaher seems pretty modest about the prospects for a second-half rebound, but a combination of reinvested expense restructuring and sizable potential M&A could leave Danaher in solid shape for a stronger 2014.

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Investopedia: With Scale, Flowers Foods Has Built A New Future For Itself

Tech investors may turn their noses up at consumer staples companies as hopelessly low-growth and boring, but Flowers Foods (NYSE:FLO) is a good example of what a prudently aggressive management team can accomplish. In 2000, the company served about one-third of the country; now that figure is up over 75% and the company has yet to focus on the Midwest and Pacific Northwest regions.

Along the way, Flowers blend of organic and acquired growth, scale, and operating leverage has produced nearly 9% compound revenue growth and almost 15% free cash flow growth. That, in turn, has fueled one-year, five-year, and 10-year stock appreciation of almost 70%, 100%, and 500%. While I'm not calling for an end to Flowers gaining share or growing its business, I do wonder if the shares aren't in need of a little rest, as the valuation no longer seems quite so compelling at these levels.

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Seeking Alpha: CRE Playing The Long Game In China, And Looks Significantly Undervalued

Investors know all too well how challenging it can be to generate long-term gains from Chinese equities. Leaving aside those companies that play fast and loose with accounting or pin their hopes on favored relationships with government officials, there are the rapidly-changing economic trends that may make long-term forecasting even more challenging.

All of that said, I think investors should give serious consideration to China Resources Enterprise (CRHKY.PK). While CRE carries the black mark against it of being a state-owned enterprise, the company has emerged as a leading retailer and brewer in this fast-growing economy, and is looking to invest more in its food processing and beverage businesses.

What's more, the company plays the long game - using JVs and foregoing quick near-term profits to build a larger, more profitable business down the road. All told, I believe a case can be made that CRE shares should appreciate 40% to 50% over the next 12 to 18 months as China recovers and investors return to names leveraged to Chinese consumer spending.

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CRE Playing The Long Game In China, And Looks Significantly Undervalued

Seeking Alpha: Receptos Could Meet With A More Positive Reception

Investors do well to be very skeptical of the biotech companies that go public in the late stages of a multi-year bull market. In many cases, bankers, executives, and insiders are looking to cash in on hope and hype and exploit a market that isn't too discriminating about the details. So while I went into researching Receptos (RCPT) with ample skepticism, I walk away more than a little intrigued.

Receptos seems like a pretty straightforward story - basically a "2.0" version of the already-successful oral multiple sclerosis drug Gilenya sold by Novartis (NVS), but one with a potentially much better tolerability profile. Add to that the possibility of clinically meaningful activity in ulcerative colitis and a "call option" drug for eosinophilic esophagitis, and Receptos shares may be as much as 50% undervalued even in this aging biotech bull market. What's more, investors won't have long to wait for significant news, as multiple trial read-outs in 2014 should further clarify the odds and opportunities.

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Receptos Could Meet With A More Positive Reception

Investopedia: Jive Software Worth A Closer Look?

I wouldn't say that the market's love affair with all things “cloud” or collaborative is over, but having the right buzzwords is no longer an express ticket to a high multiple. Due in part to self-inflicted wounds that management blames on execution and investor/analyst worries about competition, Jive Software (Nasdaq:JIVE) has dropped more than 10% over the past year and significantly underperformed its peer group.

It may be early to throw in the towel, though. The company's new sales approach, one based on establishing real-world value for clients, is still fresh and the company continues to have the opportunity to show that it can offer a better collaborative platform than less focused rivals like IBM (NYSE: IBM), Microsoft (Nasdaq:MSFT), and Salesforce.com (NYSE:CRM). Although Jive's shares don't look very cheap on a discounted cash flow basis, that's nothing new in the world of growing software companies and other methodologies suggest more upside.

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Seeking Alpha: Middleby Not Giving Many 'Buy The Dip' Opportunities

When an investor is watching a great growth story from the wrong side of the glass, there's little to do but hope for the occasional stumble to create a buying opportunity. Fast-growing food service equipment company Middleby (MIDD) stubbornly refuses to cooperate, though, as management's consistent execution has created relatively few pullbacks in recent times. Given the company's dual focus on strong internal product development and strategic M&A, not to mention the large addressable markets left unexplored (both geographically and product-oriented), it's tempting to make a "forget the valuation" call with Middleby. At a minimum, this is a stock to monitor just in case one of those rare pullbacks comes.

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Middleby Not Giving Many 'Buy The Dip' Opportunities

Seeking Alpha: FDA Kicks Wright Medical In The Groin - What Now?

There are days when the news that comes out of the stock market makes you want to rip the router out of the wall and just forget about stocks for a couple of days. Thursday, August 8th was one of those days as the FDA delivered a sharp kick to the collective groins of Wright Medical (WMGI) shareholders with a nearly impossible-to-justify rejection of the company's application for the Augment orthobiologic product.

If there was any good news, and that's a big "if", it was that most analysts were not fully incorporating Augment into their numbers for Wright Medical. Consequently, the rejection is not devastating from a numbers perspective. Moreover, it's still at least theoretically possible that the company can find a way to get this product on the market eventually, where it could still be a multi-hundred million dollar product. For now, though, investors would do well to think about Augment on par with getting included in the will of a wealthy uncle you didn't even know you had - the FDA has made it clear that that Augment will reach the U.S. market more or less over its dead body.

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FDA Kicks Wright Medical In The Groin - What Now?

Investopedia: Sysco's Benefit Of The Doubt Looking A Little Fuzzy

Like a bag of produce left in the back of the fridge too long, the argument for Sysco (NYSE:SYY) being a dependable year-in/year-out performer is looking fuzzy and pretty unappetizing. I don't argue that Sysco remains the go-to name when it comes to supplying restaurants and all manner of food-serving institutions, but I do argue that that dominance isn't worth quite as much in terms of margin leverage as long believed. Still, this company reliably churns out free cash flow and that ought to keep the shares from getting all that cheap.

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Investopedia: Weaker Organic Growth Creating An Opportunity In Nestle

Swiss food giant Nestle (Nasdaq:NSRGY) is a remarkable company in several respects. Despite being one of the largest food companies in the world, Nestle continues to focus on ongoing product innovation and is closing in on generating half of its sales from emerging markets. Add 20 billion-dollar brands and a long track record of out-earning its cost of capital, and it's not too hard to see why Nestle shares often trade at a premium.

“Often” is not the same as always, though, and a recent slowdown in organic sales growth seems to have created a window of opportunity in these shares. Investors have to accept the risk that the company will fail to deliver 5% organic growth for 2013, but the long-term opportunity makes this a name worth considering.

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Investopedia: Fusion-io Tries To Hit Reset, But The Street Will Carry A Grudge

By no means is it unheard of for tech companies, including storage companies, to stumble in their early years. With Fusion-io's (NYSE:FIO) fiscal fourth quarter and guidance, management can certainly check that box. The trouble now is the question of how to weigh out the balance of the company's interesting enterprise flash storage technology (and the growing marketing opportunity) with the likelihood that the company can and will execute on that opportunity.

Fusion-io deserves the time it's going to spend in the doghouse. Earlier management was brash and bold, and the Street doesn't necessarily have a problem with that, but the failure to deliver is now an issue. I don't particularly like this company, but even I have to say that the valuation is now at a point where the stock is possibly interesting again if the company doesn't have to reset guidance to a lower level once again.

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http://www.investopedia.com/stock-analysis/081213/fusionio-tries-hit-reset-street-will-carry-grudge-fio-emc-lsi-ibm.aspx

Investopedia: Nvidia's Core May Be Strong, But Tegra Is Getting Expensive

Nvidia (Nasdaq:NVDA) generates a healthy amount of free cash flow and has maintained a strong GPU business despite but the pressures in the PC market, but analysts and investors have increasingly soured on the company's mobile ambitions. Tegra has yet to catch on, and with competition ramping up from Intel (Nasdaq:INTC), Qualcomm (Nasdaq:QCOM), Marvell (Nasdaq:MVRL), and others, this whole adventure may end up as little more than an expensive mistake. The shares don't look expensive even on undemanding assumptions, but Tegra-related concerns are likely to keep a lot of investors out of the shares.

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Investopedia: Can Mondelez Live Up To The Sell-Side Hype

Not unlike the apparent love affair between Wall Street and Kraft (Nasdaq:KRFT), Mondelez (Nasdaq:MDLZ) gets quite a bit of love from the sell-side. Many analysts seem convinced that Mondelez can significantly boost its organic growth over a relatively short time and likewise significantly upgrade margins. While I think Mondelez is basically a good company, I worry that the expectations bar is being set at a level where a failure to perform is going to create a real backlash. Even if I use growth expectations beyond the published estimates of the bulls, I can't really get to a point where Mondelez looks cheap today.

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Investopedia: Novo Nordisk Getting Its Trial By Fire

The past year or so has shown that Novo Nordisk (NYSE:NVO) isn't immune from seeing some serious challenges to its business. Between a serious setback in its insulin development program and nagging worries about incretins, 2013 isn't going to go down as a great year in the history of Novo Noridsk. All of that said, I have little doubt that the company will continue to be an uncommonly strong pharma company, with huge leverage to one of the fastest-growing diseases in the world. Although I think broadening both the diabetes business and the overall business would be beneficial, Novo Nordisk really doesn't have to do much to continue performing at a high level.

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Investopedia: Transocean Still Has Plenty To Prove, But The Valuation Isn't Demanding

It doesn't seem like it was that long ago when Transocean (NYSE:RIG) was considered one of the best-run energy-related companies and the leader in the offshore drilling industry. While Transocean still has far and away the largest offshore fleet, the company's issues with downtime, operational efficiency, and legacy Macondo liabilities has eroded a lot of the goodwill the company had built with the Street. Transocean's valuation doesn't appear very demanding today, and an improving deepwater market should help, but management still has to rebuild its credibility if the stock is to get the sort of valuation it used to enjoy.

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Investopedia: Groupon Takes Another Step Forward

The once beaten-up Internet 2.0 stocks are coming back with a vengeance. Groupon (Nasdaq:GRPN) still has a long way to go to match Facebook (NYSE: FB) and Yelp (Nasdaq:YELP) in terms of reclaiming prior highs, but the stock has quadrupled from its lows and analysts seem considerably more positive about the company's strategy now. With that big recovery in the stock, valuation is getting more demanding but if Groupon can get to double-digit revenue growth, I would expect the stock to remain strong.

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http://www.investopedia.com/stock-analysis/080813/groupon-takes-another-step-forward-grpn-fb-goog-amzn.aspx

Seeking Alpha: Endo Health Has A Lot Of Work To Do

How do you ruin a specialty pharmaceutical business? Take a ridiculously lucrative stream of free cash flow generated by a strong pain franchise and reinvest it badly-reasoned acquisitions in the device space. To be fair, though, "ruin" in the case of Endo Health Solutions (ENDP) still means a stock that has climbed almost 150% over the past ten years and left both the S&P 500 and drug companies like Teva (TEVA) and Mylan (MYL) in the dust.

The relevant question now is where Endo Health goes from here. The company's one-time fortress of pain medications is now due to erode away in the face of generic competition, while the company's device business has not only failed to generate good cash flows but has actually created potentially large product liability claims. New management has already laid out bold cost-cutting moves and explicitly intends to close multiple M&A transactions. At this point, then, this stock is basically a referendum on management - if you believe they can acquire a better future for Endo, you probably like the stock. If you believe Endo won't be able to acquire enough growth, it probably looks like a hold at best.

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Endo Health Has A Lot Of Work To Do

Seeking Alpha: Can Tiny Synergetics See A Big Surge?

Having made some solid capital gains from various ophthalmology and niche med-tech companies in the past, I looked into Synergetics (SURG) hoping to find an interesting growth opportunity that the Street has simply not caught on to yet. While I did find a decent company with some growth and capital appreciation potential, the magnitude of that potential was maybe not quite what I was hoping to find. Though I intend to monitor this company in the future to see whether they can capitalize on any disruptions at Valeant's (VRX) Bausch + Lomb business, I'm not sure I see quite enough opportunity today to merit a strong recommendation.

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Can Tiny Synergetics See A Big Surge?

Seeking Alpha: Tornier's In The Right Market, But Expectations Are High

It seems pretty clear that extremities are the next big growth opportunity in orthopedics. Of course, "big" is a relative statement - the market for implants and tools to repair shoulders, elbows, ankles, and feet is only about 10% the size of the market for spine care, and only about 25% of the size of the spinal fusion market. Even so, double-digit market growth tends to attract attention, and that could be a good thing for Tornier (TRNX) - an extremities-focused small cap with strong share in this emerging market.

Right now, Tornier is still a company in transition. Not only did the company see a rather sudden CEO/CFO change a year ago, but Tornier is also still in the midst of a sales force transition, the integration of a large acquisition, and the introduction of a significant new product. And while I do believe Tornier is likely to start posting better results, I do wonder if the Street isn't a little too enamored of the company's market share and the double-digit growth of the extremities market.

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Tornier's In The Right Market, But Expectations Are High

Investopedia: A Little Noise In Disney Earnings Shouldn't Matter Much

Even though Disney (NYSE:DIS) shares were basically flat for the past quarter (while the S&P 500 was up about 5% and some consumer indices were a little stronger), it's hard to overlook the 30%-plus gain over the past year. Along similar lines, while the company's core cable, international park, and movie business may have not done so well this quarter, Disney doesn't run itself on a quarter by quarter basis. With that, and the company's strong sports, movie, park, and IP franchises, it's hard not to like Disney as a company, even though the shares don't look particularly cheap.

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Investopedia: Parker Hannifin Skids, But Conditions May Be Bottoming

It's not too much of a stretch to say that Parker Hannifin (NYSE:PH) makes industry move. Although the company doesn't give much in the way of end-market breakouts, hydraulics, seals, valves, and connectors are vital to a host of markets ranging from vehicles to energy to basic machinery, and Parker counts customers as diverse as Caterpillar (NYSE:CAT) and McDonald's (NYSE:MCD) in its roster.

Orders haven't been very good for a while now, and that has basically mirrored the malaise in the wider industrial market. Although Parker's fiscal fourth quarter performance was not very strong (and guidance likely disappointed many investors), flat orders and management's commentary about signs that the economy is bottoming could make this a stock to watch again.

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http://www.investopedia.com/stock-analysis/080713/parker-hannifin-skids-conditions-may-be-bottoming-ph-etn-cat.aspx

Investopedia: Expectations Seem To Be A Bigger Problem For Emerson

I'm starting to feel a little sympathy for the management team at Emerson (NYSE:EMR). While the recent financial performance from this industrial conglomerate hasn't been that great, it increasingly seems to me that a lot of the Street just waves off management's cautious commentary. If the Street is building up expectations ahead of what Emerson's own people say they're likely to do, I can't really fault the management for what happens.

In any case, I still think investors are too bullish on Emerson's prospects. I do believe the Climate business is do for a solid rebound and I like the company's underlying order trends in automation, but I do worry both about the company's long-term competitiveness in automation and whether expectations are still too high. At this point, I'd still not be a buyer of Emerson.

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Investopedia: ADM Offsets Weak Volume With Strong Ethanol

With ethanol margins improving in the second quarter and investors increasingly transitioning from the old (poor) crop to the new (good) crop, Archer Daniels Midland (NYSE:ADM) has caught investor attention again, and the stock is both near a 52-week high and up almost 50% over the past year. I do believe that the 2013 U.S. crop harvest will be good for ADM's 2014 handling, milling, and crushing operations, and I do believe ethanol is here to stay. That said, this is still fundamentally a volatile low-margin business and even with the opportunities added with GrainCorp, I would be careful about chasing the shares.

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Investopedia: Hologic Struggling To Find A New Path

Hologic's (Nasdaq:HOLX) difficult midlife crisis continues. With its core cervical cancer screening business struggling in response to new recommended testing intervals and the 3D tomo mammography business slow to ramp up, Hologic is a distressing mix of sluggish organic growth and a debt-laden balance sheet. While some investors seemed encouraged by the company's move to bring back its former CEO, there's a lot of work to be done to carve out an attractive growth path for this company.

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http://www.investopedia.com/stock-analysis/080713/hologic-struggling-find-new-path-holx-dgx-ge-bdx.aspx

Investopedia: Tyson Foods Continues To Leverage Strong Margins In Proteins

As many packaged food companies start to stumble and sputter, Tyson Foods (NYSE:TSN) appears to be picking up steam. With generally solid volume and pricing trends across the business and lower feed costs boosting margins, Tyson is starting to draw the “it's different this time” bullish arguments. It's hard to argue with a stock that has nearly doubled over the past year, and management's guidance sounds pretty solid, but investors buying today need to hope for strong grain harvests and restrained competition going forward.

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Investopedia: Global Giant HSBC Still An Attractive Story

When I last wrote on HSBC (NYSE:HBC) about 18 months ago, I was positive on this global banking giant. In the intervening period the shares are up about 30% (excluding a pretty solid dividend), making that a pretty solid call. Although HSBC's second quarter/first half results were not perfect by any means, this isn't a bank that runs itself on a quarter-by-quarter basis and I see little to quibble with in the bank's excellent ratios and profits, nor its policy of redirecting copious surplus capital to both growing markets and shareholders. With the shares about 10% to 15% undervalued, there's still a case to be made for buying/holding these shares.

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Investopedia: Societe Generale Continues To Clean Up Its Act

The stocks of U.S. banks like Bank of America (NYSE:BAC) and Citigroup (NYSE:C), not to mention smaller regional players like Zions (Nasdaq: ZION), Regions (NYSE:RF), and Synovus (NYSE:SNV), have enjoyed strong rebounds on the back of the clean-up trade – ongoing improvements in bad debt inflow, credit ratios, and so on.

As bad as things got in the U.S., they were much worse in Europe and Societe Generale (Nasdaq:SCGLY) teetered on the brink of going the way of Lehman Brothers and Washington Mutual. Since going almost to the very edge of the cliff, though, SocGen management has been working hard to clean up the business, shore up its capital, and reposition the company for profitable growth. Although there is still a lot left to be done, and ample doubts as to whether they can do it, a strong second quarter and ongoing improvements are a good sign.

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Seeking Alpha: Mindray's Quarter Won't Settle Diddly

Both bulls and bears can find information in Mindray's (MR) second quarter report to uphold their preexisting biases about the stock. Convinced that that growth is slowing and the company is seeing less margin leverage? There are data to support that. Convinced that Mindray can continue to exploit a huge market for quality value-priced medical equipment while generating good free cash flow? We've got you covered there too.

At a minimum, I'd say Mindray is in that awkward phase where the company is alienating pure med-tech growth investors, but not yet attracting the margin/cash flow-driven value/GARP crowd. Although I think recent ventures into immunoassay and ultrasound could pay off down the road, I'm not as willing to stick my neck out right now for a stock like Mindray.

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Mindray's Quarter Won't Settle Diddly

Seeking Alpha: Wright Medical Showing A Growth Core, But Transition Will Be Messy

Sometimes simplifying a business makes things a little more complicated in the short term. When Wright Medical (WMGI) elected to sell its hip and knee implant business to MicroPort for $290 million, the company put itself on path toward becoming a pure extremity and biologics med-tech company, a decision that improve growth and margins down the road. At the same time, though, the transaction removes a cash cow business and forces the company to rebuild its international infrastructure.

On balance, I believe the MicroPort transaction will lead to better shareholder value over the long term as it frees management to maximize the far more promising extremity and biologics opportunities. Likewise, it gives the company more flexibility in M&A and makes the company a more attractive target in its own right. While converting sales and cash flow to cash on the balance sheet leads me to trim my present fair value estimate, I do believe that shareholders can look forward to improving valuation multiples and Augment approval to drive a higher share price.

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Wright Medical Showing A Growth Core, But Transition Will Be Messy

Seeking Alpha: Should Traders Try To Play The Odds With Cyclacel?

To be very clear from the get-go, I'm not bullish on the long-term prospects for Cyclacel (CYCC), nor those of its lead drug sapacitabine. I think the odds favor a negative outcome for the company's Phase III trial (SEAMLESS), and I think the remainder of the pipeline is unlikely to generate much investor enthusiasm in the absence of a licensing agreement.

That said, I'm surprised that Cyclacel trades where it does. By my math, Cycalcel trades with implied odds of sapacitabine success of less than 12%. While that may ultimately prove prescient, it seems out of line with the implied odds that other controversial oncology companies like Aeterna Zentaris (AEZS), Northwest Biotherapeutics (NWBO), ImmunoCellular (IMUC), Dendreon (DNDN) and Vical (VICL) have enjoyed at various points in their developmental histories.

This leads me to wonder if Cyclacel will run up into the interim analysis (estimated to occur in 2014) of the Phase III study. This is not a stock that I'd buy with the intention of holding for any extended period of time, but even just 15% to 20% assumed odds of success would suggest a target of around $4 to $5.40.

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Should Traders Try To Play The Odds With Cyclacel?

Seeking Alpha: Novadaq On Track To Bring Excellent Growth To Light

With second quarter results in hand, Novadaq (NVDQ) continues to look like a rare med-tech story with both very strong growth and large addressable markets trading at something close to a reasonable valuation. "Reasonable" is a subjective assessment, of course, it will take many years of exceptional growth for Novadaq to earn its valuation, but I believe the company's strong portfolio of surgical imaging technologies can drive that growth.

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Novadaq On Track To Bring Excellent Growth To Light

Seeking Alpha: MAKO Surgical - Rebuilding Credibility, But They Need To Rebuild More Knees

When I last wrote on MAKO Surgical (MAKO), I thought investors would be well-served by slowly building a multi-part position. With the stock up 38% since that piece (and 43% over the last three months), I'm feeling relatively good about that call. What's more, MAKO management has helped itself and rebuilt some credibility with the Street when it comes to guidance and financial performance. With the shares back in the mid-teens, it's going to take better utilization numbers for me to get more excited about the shares, and the trend there is not nearly so positive.

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MAKO Surgical - Rebuilding Credibility, But They Need To Rebuild More Knees

Investopedia: Wall Street All In On Kraft's Improvement Potential

The way many sell-side analysts talk about Kraft Foods (Nasdaq:KRFT) and the company's CEO Tony Vernon, you would think they make sure to never go to bed at night before kissing a picture of them both and writing their names with little hearts substituting for the “o's”. And this is for a company whose organic growth just hasn't been that good since the split with Mondelez (Nasdaq:MDLZ).

Now, to be fair, I do think Kraft is a good business and a very well-run company. In more than a few cases, Kraft either dominates its category or frankly is the category. Moreover, I like the motivational approach the company takes toward incentivizing employees, the company's focus on innovation, and its willingness to shift resources away from brands that can't carry their own luggage. On the other hand, while I do share Wall Street's optimism that Kraft will eventually post margins and free cash flow that are just as good as, if not leading, its peers, the valuation already assumes precisely that.

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http://www.investopedia.com/stock-analysis/080613/wall-street-all-krafts-improvement-potential-krft-gis-nsrgy-sjm.aspx

Investopedia: Can Sanofi Investors Just Blame It On Rio?

Sanofi (NYSE:SNY) was supposed to be a relatively solid Big Pharma company in 2013. True, the company is going through some pressures from patent expirations and internal drug development issues have created a soft spot for growth, but Sanofi's strong emerging market exposure was supposed to help, as was the fact that about one-third of the company's revenue comes from non-branded drug businesses.

Instead, Sanofi delivered a surprisingly large miss for the second quarter, a miss that means a little more in the typically more predictable Big Pharma space. While it may be true that problems in Brazil were a large part of the reported miss, worse than expected results in ex-Brazil emerging markets, vaccines, and animal health, coupled with higher than expected SG&A spending to support new launches, has reset expectations to a lower level. Although Sanofi shares are not overvalued today and the company could demonstrate fairly quickly that Q2 results were just an aberration, it's harder to make a forceful pro-Sanofi argument today.

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http://www.investopedia.com/stock-analysis/080613/can-sanofi-investors-just-blame-it-rio-sny-shpg-biib-amgn.aspx

Investopedia: Chevron Disappoints, But Offers A Little Value

With the results in hand from Exxon Mobil (NYSE:XOM) and refiners like Valero (NYSE:VLO) the big surprise for the second quarter would have been if Chevron (NYSE: CVX) had posted a good quarter in refining. Chevron didn't do so, and the company's performance in the upstream E&P business was also a little light. Coupled with a somewhat higher capex spend this quarter, it was a pretty “blah” report for this international energy major. By the same token, given that growth isn't going to really change much until Gorgon gets going (around 2015), it's not a story-changing quarter and Chevron continues to look like a decent pick in the major energy space.

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Investopedia: Will Less Scarcity Value Harm Whole Foods?

Whole Foods (NYSE:WFM) is still most commonly identified as the supermarket for organic, natural, and healthier foods. While plenty of shoppers know about chains like Sprout's (NYSE:SFM), Natural Grocers (Nasdaq:NGVC), and The Fresh Market (NYSE:TFM), just about everybody has been to a Whole Foods once. With more organic/healthy food options in the stock market, not to mention a significant expansion at conventional retailers like Wal-Mart (NYSE:WMT) and Target (NYSE:TGT), just how special is Whole Foods anymore? While the numbers continue to support the notion that Whole Foods is an uncommonly well-run retailer with considerable growth potential, it's increasingly challenging to justify the price on the shares.

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http://www.investopedia.com/stock-analysis/080613/will-less-scarcity-value-harm-whole-foods-wfm-ngvc-sfm-tfm-wmt.aspx

Investopedia: Eaton's Conservatism Clashes With Street's Enthusiasm

Wall Street badly wants to believe in the narrative of a strong second half recovery, and companies that don't toe that particular line are seeing their stock prices suffer. While I didn't hear much that was really very new in Eaton's (NYSE:ETN) comments after the second quarter report, the Street took the shares down almost 6% as management's comments took the high end of guidance off the table. Although I do expect Eaton to reap good revenue growth from the Cooper deal, as well as long-term cost benefits and lower taxes, the shares are still no bargain unless you're willing to go with pretty exceptional growth expectations.

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Seeking Alpha: Industry Headwinds Masking Some Progress At Axiall

The trouble with commodity businesses is that there's only so much that a company can do to control its fate. In the case of Axiall (AXLL), the company seems to be doing well with respect to its synergy targets, but the underlying PVC and caustic soda markets haven't improved as much as hoped. While this could have the effect of shifting out some of the obvious profit and cash flow leverage by a few quarters, Axiall remains an undervalued play on a recovering housing market coupled with company-specific margin improvement opportunities.

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Industry Headwinds Masking Some Progress At Axiall

Seeking Alpha: Atmel Needs To Show That Touch Can Be A Growth Business Again

While Atmel (ATML) has looked for touch controllers/sensors in mobile devices to build on its core microcontroller business and reignite some growth, that plan hasn't exactly gone to plan. Atmel has done a good job of developing new technologies like maXTouch, but the company has not yet broken out of a cycle where the higher-end touch companies like Atmel, Synaptics (SYNA) and Cypress (CY) play leapfrog with each other on each new device iteration (gaining and losing sockets) before eventually seeing lower-ASP rivals catch up.

At the same time, the underlying recovery for non-touch microcontrollers has been a touch-and-go affair in end markets like industrial, wireless, consumer devices and so on. While Atmel continues to offer leverage to both a more general chip demand recovery as well as company-specific drivers like improved margins and acceptance of its new XSense technology, the slowdown in high-end handsets and the very slow adoption of touch-enabled laptops/notebook computers still make this a challenging investment thesis.

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Atmel Needs To Show That Touch Can Be A Growth Business Again

Investopedia: Becton Dickinson Already Priced For Excellence

It's pretty rare to see an “Underperform” rating on a med-tech stock these days, but Becton Dickinson (NYSE:BDX) carries more than Johnson & Johnson (NYSE:JNJ), Abbott (NYSE:ABT), and Cepheid (Nasdaq:CPHD) combined. I won't pretend to have read all the research reports out there, but it seems that most of those analysts who are cautious/negative on BD are so because of the stock's very robust valuation and concerns about both near-term and long-term growth in the diagnostics business. I too see these shares as overpriced relative to the likely growth trajectory, and wouldn't be a buyer at these levels.

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http://www.investopedia.com/stock-analysis/080113/becton-dickinson-already-priced-excellence-bdx-abt-rhhby-cphd-holx.aspx

Investopedia: The Street Has Caught Covidien

For most of 2012 and 2013, Covidien (NYSE:COV) was the not-so-little med-tech that could. In an environment were companies like Johnson & Johnson (NYSE:JNJ), Bard (NYSE:BCR), Stryker (NYSE:SYK), and Abbott (NYSE:ABT) were struggling to deliver sustained attractive growth in devices, Coviden managed to do so. Now, though, it looks like the Street has caught up with Covidien's prospects and the sequential deceleration in device growth could make it harder for these shares to outperform. Still, as one of the best companies in a still-popular sector, I wouldn't be in a hurry to sell if I owned shares.

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Investopedia: Kellogg Reports Unimpressive Earnings

While the bull market in consumer stocks has slowed a bit over the past quarter, and Kellogg's (NYSE:K) performance has trailed others like General Mills (NYSE:GIS) and Post (Nasdaq:POST), the stock was still trading quite close to its 52-week high prior to its second quarter report. Unfortunately for shareholders, organic growth came in pretty weak. While the second half should be stronger from a margin perspective, a high valuation and less impressive growth trajectory could put these shares on ice for a couple of quarters.

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Investopedia: Weatherford Burning Through Its Benefits Of The Doubt

Broadly speaking, there are two valid reasons to own Weatherford (NYSE:WFT). First, you believe that the company's position in markets like artificial lift, casing, and tool rental coupled with more disciplined management will lead to solid revenue and profit growth. Second, you believe that the company's process of getting its act together, including resolving tax/reporting issues, a FCPA investigation, and working capital management, will lift the penalty discount on the shares and/or prompt a buyout.

Judging by Weatherford's second quarter earnings, and the market's reaction, it seems like the second notion is in the lead. This wasn't a great quarter for the service sector, but Weatherford's quarter was pretty poor on an operating basis, and there's only just so much grace period that investors will give this management team. While I'm still content to own these shares on the basis of what I think is the underlying value to the business, the company needs to get its act together quickly.

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