Seeking Alpha: Orchids Paper Products A Paper Tiger, But In A Good Way

When I last wrote about Orchids Paper Products (TIS) in October, I expressed a lot of respect and admiration for this well-run paper products company, but thought the valuation was a bit steep. I'm not going to claim that I got that part right; the shares rose another 20% or so from where I wrote and it was only a sharp three-day drop in Orchids' stock that brought it back down again. I still do not believe that these shares are all that cheap, but it's hard not to like a company with a credible growth plan and a solid dividend.

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Orchids Paper Products A Paper Tiger, But In A Good Way

Seeking Alpha: Cal Dive Still Waiting For That Offshore Recovery

There are more than a couple of ways to make Cal Dive (DVR) look cheap. If you look the book value of the company's vessels, it might be tempting to call the stock undervalued on the basis of its liquidation value. Likewise, if you look at past utilization rates and EBITDA margins, it can be tempting to base a strong bull argument on the basis of substantial earnings leverage once Gulf of Mexico activity levels recover.

I'm not nailing down the coffin lid on Cal Dive, but I do see this stock as a more speculative play on better offshore activity levels in the Gulf. The nature of offshore support functions is changing, and I believe it favors companies like Oceaneering (OII), Chouset, Subsea 7, Saipem, and Technip (OTCQX:TKPPY) as more work goes to ROVs and deepwater projects. Projects are starting to move forward, though, and Gulf rival Tetra Technologies (TTI) has sounded relatively bullish on near-term prospects. If Cal Dive can get more of its fleet working in FY 2014 and continue to move back toward mid-teens EBITDA margins, a substantially higher share price is possible.

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Cal Dive Still Waiting For That Offshore Recovery

Seeking Alpha: More Positive News For Lexicon, But Not The Big Announcement

Lexicon Pharmaceuticals (LXRX) continues to generate data on its SGLT-1/2 inhibitor LX4211 that suggest this is an effective and promising medication for treating not only Type 2 diabetes (the common target for non-insulin medications for diabetes), but also Type 1 as well. Lexicon's most recent update, a small short-term Phase II study in Type 1 diabetics is certainly a positive update, but it's not what investors really want to see. Lexicon still needs to find a development partner for LX4211 and the ongoing delays don't help sentiment or the long-term prospects for the drug.

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More Positive News For Lexicon, But Not The Big Announcement

Seeking Alpha: Titan Machinery Needs More Than Short Covering

It's always worth remembering that there is more to a stock's performance than just the reported financials. In the case of Titan Machinery (TITN), fiscal fourth quarter results were not all that greater and there are still real issues with the business model. Investors liked what they heard about cost-cutting in the next year, though, and with Yahoo! Finance showing about one-third of the float held short, it looks like a short squeeze helped catapult the shares last week.

I saw value up to the high teens on a cash flow-basis last time I wrote, and I still see a similar fair value after this latest quarter. I don't like the model, though, and I think investors have better options for playing bullish outlooks for agriculture and/or construction equipment demand.

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Titan Machinery Needs More Than Short Covering

Seeking Alpha: PTC Therapeutics Looks Like A High-Risk Play On Rare Diseases

With money and momentum flowing out of the biotech sector, there are going to be a lot of beaten-down diamonds in the rough amidst the wreckage. I'm not entirely convinced PTC Therapeutics (PTCT) is a diamond, or at least not yet. While the company's lead compound ataluren has a lot of promise, there some serious questions and concerns about the drug. Bulls are right about the high-end potential here, but prior trial failures shouldn't be ignored.

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PTC Therapeutics Looks Like A High-Risk Play On Rare Diseases

The Motley Fool: What's Behind Intuitive Surgical Inc's Revenue Miss?

If surgical robot pioneer Intuitive Surgical (NASDAQ: ISRG  ) is going to keep its heady med-tech growth stock multiple, it has to do better than this. After logging just 4% revenue growth in 2013, Intuitive's announcement of a 24% drop to start 2014 is certainly not a step in the right direction. Some of the trouble may well be from transitory issues like weather and delays tied to hospitals awaiting new product rollouts, but Wall Street is not a forgiving place when high multiple growth stories stop delivering that growth.

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What's Behind Intuitive Surgical Inc's Revenue Miss?

Seeking Alpha: Impala Platinum Seeing Short-Term Pain For Uncertain Gains

As was the case when I wrote about South African platinum producer Aquarius (OTCPK:AQPTY), I can't help but feel a little sorry for management Impala Platinum (OTCQX:IMPUY) (also known as "Implats"). Dealing with the rapacious government in Zimbabwe was more than enough of a headache, and now the top three South African platinum producers are dealing with an extended strike that is running down their inventories and threatening significant cost increases over the coming years.

At some point the strike in South Africa will end and Implats, Anglo American Platinum (OTCPK:AGPPY), and Lonmin plc (OTCPK:LNMIY) will get back to business. The strike is likely running down global platinum inventories, but there is certainly the risk that higher wage costs at notoriously labor-intensive mines will weigh on the sector for years. Barring yet another attempt from the government of Zimbabwe to shake down the platinum miners, I would argue that Implats offers an investors a rocky short-term road, but decent value for the long-term.

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Impala Platinum Seeing Short-Term Pain For Uncertain Gains

Seeking Alpha: AngioDynamics Delivering The Growth, Margins Next?

When it comes to publicly-traded companies, growth fixes a lot of issues and AngioDynamics's (ANGO) return to revenue growth has seen the stock outperform nicely over the past year. There are certainly considerable challenges left for AngioDynamics management, including taking share from Bard (BCR) and Teleflex (TFX) in vascular access and maximizing the value of newer offerings like BioFlo and AngioVac. Efforts to restructure the business and generate better margins are likewise a big part of the bull thesis.

These shares are still in that grey area of "strong hold" for me. The shares don't appear all that cheap by discounted cash flow, even giving management the benefit of the doubt on margins, but the EV/revenue multiple is quite low and this is often the number that institutional investors follow. So long as the company can post better growth numbers and keep the margin improvement story alive, I would think retesting the high teens is a credible expectation.

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AngioDynamics Delivering The Growth, Margins Next?

Seeking Alpha: MSC Industrial Continues To See An Early Cyclical Recovery

While the bad winter weather early this year certainly had an impact on some businesses, it doesn't seem to have hurt the industrial distribution businesses as much feared. MSC Industrial (MSM) didn't see the same level of growth in its most recent quarter that HD Supply (HDS) did, and the company did miss the published average sell-side revenue target, but many analysts had this stock's earnings pegged as a likely disappointment.

Instead of disappointing the Street, MSC Industrial gave a relatively encouraging update regarding the U.S. manufacturing sector and its business. Business still is far from rampant recovery levels, but the company's efforts to add sales associates and SKUs seem to be progressing on plan, as is the integration of the large BDNA deal. The expected returns here are looking increasingly ordinary, though, so I can't really pound the table as hard on this stock today as in past articles.

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MSC Industrial Continues To See An Early Cyclical Recovery

Seeking Alpha: Quality Doesn't Come Dirt-Cheap With Franco-Nevada

I'm not a gold bug by any stretch, but I do like the basic business model pursued by precious metal royalty companies like Franco-Nevada (FNV), Royal Gold (RGLD), and Silver Wheaton (SLW). By providing financing to mining companies and getting a low-cost cut of their metal production in exchange, these companies offer leverage to precious metal prices and better diversification of operating risks. They're also something of a "heads I win, tails I don't really lose" proposition, as periods of weaker metal prices limit miners' financing options and allow royalty companies to set up new agreements on better terms.

The long and short of it is that I believe Franco-Nevada offers a pretty efficient way to gain exposure to precious metals. The company has generally outperformed gold in good times and bad and also offers a dividend stream - addressing one of the major complaints with precious metal investments. These shares are not exactly cheap at around 1.9x NAV, but that's a little below the middle of the historical range for a company with a good operating history and solid production growth prospects in the future.

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Quality Doesn't Come Dirt-Cheap With Franco-Nevada

Seeking Alpha: Summer Infant Looking To Get Smaller, Smarter, And More Profitable

Picking Summer Infant (SUMR) as a Top Idea in mid-October of 2013 has been a boneheaded move so far, as the stock has declined about 25%. Summer Infant's share price weakness has come in response to greater-than-expected struggles to migrate away from low-margin licensed business and reduce SKU counts.

With new management in place, Summer Infant is continuing its basic strategic decision to slim down and refocus itself around a smaller number of more profitable, more competitive SKUs. This is not an unusual or uncommon phase in prior growth-by-acquisition stories, but the process can be difficult and stretch on longer than investors' patience. Summer Infant has a long way to go before it is a more credible threat to Dorel Industries (OTCPK:DIIBF), Newell Rubbermaid's (NWL) Graco, or Mattel's (MAT) Fisher-Price, but Summer Infant doesn't have to become the best to be better.

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Summer Infant Looking To Get Smaller, Smarter, And More Profitable

Seeking Alpha: EnerNOC Working, But The Outlook Still Cloudy

I liked demand response and energy management company EnerNOC (ENOC) six months ago and the stock has done well since, rising about 40% as the brutal winter weather brought attention back to the advantages of electricity demand response. I still like this company, particularly as the company shifts its attention to international DR markets and the sizable opportunities in providing enterprises with tools to better analyze and manage their energy needs.

The prime issue with EnerNOC remains the volatile regulatory environment. PJM Interconnection, a major source of EnerNOC's revenue, is serious about altering its rules for demand response and those changes threaten a meaningful portion of today's revenue and cash flow. Over time the company's efforts to diversify and the underlying advantages of DR should smooth this out, but the company's reported performance could be erratic in the meantime. That complicates valuation, though today's price does not seem unreasonable.

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EnerNOC Working, But The Outlook Still Cloudy

The Motley Fool: Can Perrigo Company PLC Continue Its Bull Run?

There's a pretty good chance that if you use store-brand OTC consumer health products, you have a Perrigo (NYSE: PRGO  ) product in your bathroom right now. Perrigo hasn't completely eschewed the prescription-based generic drug business that build companies like Teva (NYSE: TEVA  ) , but it has focused a great deal of its time and energy on ruling the store-brand OTC market. That business now offers pretty solid cash flow and returns, with plenty of growth opportunity in areas like diabetes and pet care. Perrigo doesn't exactly carry a "store-brand" multiple today, but these shares could still offer some upside as the company looks forward to further OTC launches, additional M&A, and growth in the nutrition and overseas markets.

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Can Perrigo Company PLC Continue Its Bull Run?

Seeking Alpha: Has Universal Stainless & Alloy Products Bottomed?

When last I wrote about Universal Stainless & Alloy Products (USAP), I was bullish on the long-term potential of the company's efforts to upgrade its product mix, but skeptical about the valuation of the stock. Since then, the shares are down about 7%, having spent the last six months chopping between $32 and $38. In that time, that company's progress on volume growth and mix has been frustratingly inconsistent.

I have a nerdish interest in metallurgy and companies like Allegheny Technologies (ATI), Carpenter Technology (CRS), A.M. Castle (CAS), and Haynes International (HAYN), but following companies and science is a completely separate issue from the stocks. I do generally like the potential for advanced alloy growth in aerospace, power machinery, and oil/gas, and I also do believe that vacuum induction melting (or VIM) products will skew USAP's mix higher over time. Here and now, though, it's hard to call the shares undervalued, with an apparent fair value around $33 to $37.

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Has Universal Stainless & Alloy Products Bottomed?

Seeking Alpha: Parker Drilling Starting Slow, But On A Better Path

I liked Parker Drilling (PKD) and its turnaround/self-improvement story about six months ago, and while the idea worked pretty well for a short time (the stock rose about 30% in the first month after that article), performance has trailed off noticeably since March as the company warned that 2014 would be off to a slower start. With that, the shares have been left behind by other small-cap energy service providers and contract drillers.

The sluggish start to 2014 is disappointing, but the Parker Drilling story is still worth a closer look. The company is the leading player in domestic drilling barges, earning a dayrate premium for the quality and capabilities of its rigs. The company's international land rig business is seeing better utilization, and there is a significant opportunity in the tool rental business from expanding operations in the Gulf of Mexico (or GOM) and improved margins in the international business (or ITS). A fair value of around $8 may not scream "must own" today, but it is worth a look as a relative laggard in the space.

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Parker Drilling Starting Slow, But On A Better Path

Seeking Alpha: Vistaprint Still Consistently Inconsistent

Bullish sell-side analysts have long pushed Vistaprint N.V. (VPRT) as a way to play growth in small businesses and the advantages of online/web-based disintermediation in bringing more sophisticated marketing tools to the SMB sector. It all sounds good (it always has), but Vistaprint seems stuck in this yo-yo business model where sustainable, balanced growth seems elusive.

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Vistaprint Still Consistently Inconsistent

Seeking Alpha: Marlin's Retreat Starting To Get Interesting

The market has apparently started turning its back on small caps, and that is likely to produce some long-term values. I think Marlin Business Services (MRLN) is starting to earn its way onto that list. Marlin is a good play on a small business recovery, and the company's over-capitalized balance sheet and low cost of funds gives management considerable flexibility. I haven't always been so fond of the stocks' valuation, but this 30%-plus pullback from the high is starting to look a little excessive.

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Marlin's Retreat Starting To Get Interesting

The Motley Fool: Mallinckrodt plc Takes a Big Swing for Growth

Facing declining market share in its core generic controlled substance (painkillers) market and holding the valuable asset of an Irish tax domicile, Mallinckrodt plc (NYSE: MNK  ) has aggressively put its balance sheet to work. First the company announced a $1.3 billion deal for Cadence Pharmaceuticals (NASDAQ: CADX  ) and its hospital-centered Ofirmev product (injected acetamenophen). Now the company is taking an even bigger swing – announcing a $5.6 billion deal for controversial Questcor (NASDAQ: QCOR  ) and its lead drug Acthar.

If Mallinckrodt can steer Questcor past the rocks that short sellers have been loudly claiming are in the company's path, this deal could double Mallinckrodt's earnings in relatively short order. If the short sellers are proven right about the many and varied problems of Questcor and Acthar, Mallinckrodt's shareholders will pay the price.

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Mallinckrodt plc Takes a Big Swing for Growth

Seeking Alpha: A Sharp Pullback In Celldex Could Be A Window Of Opportunity

To buy when others seemingly can't sell fast enough takes a lot of guts (and other less family-friendly attributes), but it can be one of the best ways to exploit Wall Street shortsightedness. Small-cap oncology immunotherapy biotech Celldex (CLDX) has gotten swept up in this biotech bubble-popping, even though the data from the company has generally been positive and supportive of the idea that this company has some promising high-potential drugs.

On a risk-adjusted basis, I calculate a fair value of $29 per share for Celldex, suggesting significant upside from today's level. Readers have to consider two key risks here. First, there is the ever-present biotech risk that Celldex's drugs will fail in advanced clinical studies and never make it to market. Second, there is a growing risk that investors are cycling out of biotech and may no longer be willing to use the same long-term revenue multiples and discount rates. A true rout in the biotech space could take these shares down another 50% without any bad news from the company, but investors who can stomach that risk as the price of admission to a potential winner should look further into this story.

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A Sharp Pullback In Celldex Could Be A Window Of Opportunity

Seeking Alpha: Still Waiting For Tenneco's Margin And CV Leverage

On at least one level, Tenneco (TEN) offers a compelling story. European governments take emissions control fairly seriously, China is starting to take it more seriously, and while the commitment in the U.S. seems to wobble from administration to administration (or Congress to Congress), it has been marching toward higher standards. As the second-largest emissions player in the world (with around 22% share in light vehicles and 10% share in commercial vehicles), that should feed ongoing growth for Tenneco.

The problem is less about the story and more about the timing and valuation of that opportunity. Bullish analysts have been pushing a margin leverage and commercial vehicle growth story for a little while now, but the timelines keep sliding to the right. I don't disagree that Tenneco will get there, but the timing does have valuation implications. Although Tenneco's long-term DCF-based valuation isn't so impressive, the recent sell-off has pushed the price to a more attractive level on an EV/EBITDA basis.

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Still Waiting For Tenneco's Margin And CV Leverage

Seeking Alpha: Some Of PICO Holdings' Value Finally Peeking Through

Waiting for the market to realize the value in PICO Holdings (PICO) is not unlike waiting for paint to dry. The shares are up all of 9% in the past 12 months, though the six-month performance (up 11%) is a little better. Part of the problem is that so much of the company's asset base rests on a stronger housing market in the Western/Southwestern U.S., and that just hasn't materialized yet. While I would suggest investors who want to own holding company-type investments should certainly consider names like Brookfield Infrastructure (BIP) or Macquarie Infrastructure (MIC), PICO does have some appeal for those investors particularly interested in playing a Western/Southwestern housing recovery.

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Some Of PICO Holdings' Value Finally Peeking Through

Seeking Alpha: In A Shaky Biotech Market, Alnylam's Prospects Are Getting Stronger

Biotech investing is not where you go if you want an easy investing life, but the profits of patience and good stock selection can be significant. Investors are clearly nervous about biotech now, and there is a threat that sector-wide selling in these notoriously fickle stocks will put them in hibernation until the cycle turns around again.

Specific to Alnylam (ALNY), though, I would argue the company has never been stronger. The company is on pace to exceed its target of having five compounds in human studies by the end of 2015 ("5 x 15"), and a recent deal with Sanofi (SNY) gives Alnylam development funding, a motivated commercial partner, and the perception that it has been vetted by a large pharmaceutical company with a significant presence in rare diseases.

Alnylam is absolutely a risky pick, and investors should not ignore the risk that not only may the company's drugs fail in the clinic or in the marketplace, but that investors indiscriminately bailing out of the sector could weigh on the share price at times. On the flip side, I cannot ignore that Alnylam has multiple potential billion dollar-plus drugs in the clinic and a very strong R&D position in what could prove to be one of the next major therapeutic alternatives. With that, I see almost 50% upside in Alnylam shares today.

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In A Shaky Biotech Market, Alnylam's Prospects Are Getting Stronger

Seeking Alpha: Cascade Microtech Still Waiting On The Semi Rebound

The last six months have not been easy ones for small-cap semiconductor equipment and product companies. Those with exposure to LED, solar, or other non-semiconductor markets like Advanced Energy Industries or Veeco have done alright, but it has been a more challenging run for the likes of Mattson (MTSN), FormFactor (FORM), and Cascade Microtech (CSCD).

I'm still relatively bullish on Cascade, though. True, order and activity levels have not picked up as much as projects back six months ago, but Cascade is still leveraged to the increasing sophistication of chip production, as new process nodes, materials, structures, and wafer geometries will all require the company's probe cards. What's more, management has launched new tools like the CM300 and APS200 and acquired new capabilities that should make it more competitive in the wafer probe markets for advanced logic and SoCs.

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Cascade Microtech Still Waiting On The Semi Rebound

The Motley Fool: Pfizer Inc's Palbociclib Delivers the Goods

Pfizer (NYSE: PFE  ) could use another blockbuster right now, and data presented from the phase 2 PALOMA-1 study for its CDK 4/6 inhibitor palbociclib over the weekend suggests it likely has one. The only major issue now could be the Street's already aggressive expectations, particularly as they pertain to Pfizer filing for approval on the basis of phase 2 data and getting to the market ahead of Lilly (NYSE: LLY  ) and Novartis (NYSE: NVS  ) . 

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Pfizer Inc's Palbociclib Delivers the Goods

The Motley Fool: Is There Opportunity in the Eye-Care Sector?

Imperfect vision is a common problem around the world. It's the basis for large businesses at Essilor (NASDAQOTH: ESLOY  ) , Hoya, and Luxottica (NYSE: LUX  ) , as well as contact-lens manufacturers like Johnson & Johnson (NYSE: JNJ  ) , Novartis, Cooper (NYSE: COO  ) , and Valeant (NYSE: VRX  ) . Not only is providing vision care products a profitable business in its own right, which often supports double-digit returns on capital, it is a business where customers typically have to buy the product over and over again throughout their life. Add in above-average growth prospects from emerging markets and it is not too difficult to see why these businesses generally carry robust valuations.

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Is There Opportunity in the Eye-Care Sector?

The Motley Fool: Can Express Scripts Holding Co. Beat Expectations Again?

Pharmacy benefit management company, or PBM, Express Scripts (NASDAQ: ESRX  ) has done quite well for investors in the past, but Wall Street is less confident about the future. Analysts are skeptical that, with the large advances already made in the shift to generics, Express Scripts can leverage formulary design, producer discounts, mail delivery and other drivers to continue generating double-digit free cash flow growth.

That skepticism could work in investors' favor, though, as Express Scripts looks like one of the relatively few meaningfully undervalued large health care companies.

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Can Express Scripts Holding Co. Beat Expectations Again?

The Motley Fool: Can DaVita HealthCare Partners Inc's Run Last?

The two largest hemodialysis service providers, Fresenius Medical Care (NYSE: FMS  ) and DaVita HealthCare Partners (NYSE: DVA  ) , may have a lot in common, but the performance of their shares is not one of them. Over the past year, DaVita has a 10% lead on on Fresenius and that lead only increases at the two-year (roughly 60%), and five-year (nearly 120%) marks.

Though the operating margins have been similar, DaVita has significantly outgrown Fresenius over the past decade and generated more free cash flow as a percentage of revenue. Better still, DaVita's HealthCare Partners business looks like a "right place, right time, right idea" operation that can benefit from a growing focus on basing health care spending on outcomes, not procedures. Considering DaVita's growth potential, the shares may yet be as much as 20% undervalued today.

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Can DaVita HealthCare Partners Inc's Run Last?

Seeking Alpha: RPC's Winter Of Discontent Has Passed

When I wrote on RPC (RES) about six months ago, I thought the company was a well-run, quality small-cap energy services name, but also a little pricey relative to some other options in the services space. RPC's performance in the interim was quite good (up about 20%), but the relative performances of Basic Energy (BAS) (up almost 120%) and several other service companies were even better, so I'm not exactly regretting the call.

Service stocks have rebounded on the prospects of greater activity in 2014, particularly in areas like pressure pumping and coiled tubing. Given that RPC maintained pretty good margins even as contracts rolled off and the company was forced to the tough spot market, I like this company's prospects for making hay as increased activity leads to better prices. The valuation isn't dirt-cheap right now, but I still think these shares can head higher in 2014.

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RPC's Winter Of Discontent Has Passed

Seeking Alpha: FMC Corp's Exceptional Performance Comes At A Cost

There are a lot of really good things about FMC Corporation (FMC). The company's unusual model in agricultural chemicals allows for exceptional margins, and the company's food/nutrition business is a leader in close to two-thirds of its operations. The only fly in the ointment is that investors are well aware of FMC's exceptional growth and its different model, and the valuation on these shares is not low.

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FMC Corp's Exceptional Performance Comes At A Cost

Seeking Alpha: Global Payments' Transformation Continues

Merchant acquiring isn't the most exciting business - truth be told, the entire acquiring / network / interchange system is probably boring to most people - but Global Payments (GPN) has a lot of interesting drivers working right now. The company's transition away from ISOs and toward direct acquisition should be good for margins over time, and the company has an uncommonly strong position outside the U.S. With the company also embracing integrated payments, higher revenues and margins should also be in play down the line.

Global Payments' efforts haven't gone unnoticed. Since I last wrote, the shares are up about 20% on increasing bullishness over the company's efforts to expand into integrated offerings and speculation that the company's overseas position could make it an M&A target. These shares don't seem mispriced in the market right now, but could still generate a good high single digit to low double-digit annual return from here.

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Global Payments' Transformation Continues

Seeking Alpha: Should Investors Buy PMC-Sierra Ahead Of Big Product Ramps?

Shares of storage and networking semiconductor company PMC-Sierra (PMCS) have done reasonably well since I last wrote about the company in October. Up around 20%, the company has lagged acquisition-assisted LSI (LSI), but matched Broadcom (BRCM) and outperformed Applied Micro (AMCC). Analysts, though, are a little worse than lukewarm on the shares, with four holds and two underperforms at present.

In reading the sell-side research, it seems like analysts are concerned about going positive on PMC-Sierra ahead of meaningful ramps in PCIe flash controllers, 12G SAS, and OTN. While I find it odd that the normally overly-bullish sell-side is being cautious, investors don't seem to have the same issue. With the run in the shares over the past six months, PMC-Sierra's price seems more than fair relative to its long-term cash flow-based value and likewise quite reasonable relative to operating margins.

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Should Investors Buy PMC-Sierra Ahead Of Big Product Ramps?

Seeking Alpha: The Wait Goes On At PCTEL

PCTEL (PCTI) is the sort of tiny tech company that could generate substantial upside if things started clicking, but it has been a long, frustrating wait for that growth to materialize. The company's antenna (Connected Solutions) business has some legitimate addressable growth markets like process automation, precision agriculture, and positive train control, and the company's scanning receivers have substantial share (albeit in a small market). It also doesn't hurt that the company has been free cash flow positive.

Unfortunately, this somewhat thinly-traded, under-followed company isn't generating the strong quarter-in, quarter-out double-digit revenue growth that seems mandatory for most winning tech stocks. I still believe that the company can start reporting double-digit growth again before too long and that the shares are undervalued, but I have to acknowledge that owning these shares could be a frustrating experience for long stretches of time.

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The Wait Goes On At PCTEL

Seeking Alpha: Neenah Paper Stays A Few Steps Ahead

Waiting for a better price on the stock of a company you like can work out really well sometimes, but then there are cases like Neenah Paper (NP) where the shares just keep marching upward - to the tune of better than 30% move since I last wrote about the company.

I do like the company's focus on value-added specialty papers where there is relatively less competition and less price sensitivity. I also like that management seems focused on identifying future acquisition opportunities, as free cash flow generation over the next few years should be in excess of the company's deleveraging needs. What I still don't like so much is the price you have to pay for all of that - I don't think the company has gotten 30% better in the last six months and while a company that can generate double-digit ROICs deserves a premium, this one still seems pricey.

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Neenah Paper Stays A Few Steps Ahead

Seeking Alpha: OM Group Could Be Ready To Run On A Stronger Europe

Many specialty chemicals spent the last six months going nowhere fast, OM Group (OMG) included. I've been watching this one, wondering if there might be a chance to get shares before the business started to improve on better demand in Europe. I don't think you can say that a recovery in Europe is a fait accompli, particularly in the passenger vehicle industry, but demand for automation, electrical, energy conversion, and alternative energy seems to be picking up. Considering the combination of recovering markets and a clean balance sheet with which to make accretive acquisitions, I like OM Group at these levels.

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OM Group Could Be Ready To Run On A Stronger Europe

Seeking Alpha: Still Waiting For A Better Entry Point On Innospec

When you find a chemicals company that can routinely post double-digit returns on assets and invested capital, it's worth paying attention. Likewise, not many $1 billion companies can get meaningful share in markets when competing against behemoths like the chemical operations of Exxon Mobil (XOM) and Chevron (CVX), or Berkshire Hathaway's (BRK.A) Lubrizol. Now, with Innospec (IOSP) making it clear that growing its oilfield chemicals business is a priority, I'd say the story is getting better.

Valuation still remains an issue. I've liked Innospec as a company for quite some time, but as I observed about six months ago, the valuation was and is fairly demanding. The stock hasn't done much in the interim, and I'm likewise concerned that investors buying today may be facing a wait as the company "grows into" its valuation and as the market expects more moves to build the oilfield operations.

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Still Waiting For A Better Entry Point On Innospec

The Motley Fool: Monsanto Company's Balanced Growth Proves Stronger Than the Headwinds

Agricultural productivity giant Monsanto (NYSE: MON  ) has faced a slightly higher wall of worry here of late. Calendar 2013 was an operationally strong year for the company and one that largely put to rest questions of the company's ability to recapture momentum from DuPont (NYSE: DD  ) . For this quarter, though, there were worries that poor weather, difficult comps, and lower plantings were going to stall out the company's growth.

Analysts needn't have worried, as Monsanto once again delivered a better than expected quarter. With significant near-term opportunities in both corn and soybeans and longer-term opportunities in biologicals/microbials and precision agriculture, there are both growth and value catalysts to keep this stock moving.

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Monsanto Company's Balanced Growth Proves Stronger Than the Headwinds

Seeking Alpha: Glatfelter Rolls With The Punches And Changes With The Times

When I last wrote on Glatfelter (GLT), I liked the company but wasn't eager to jump into the stock at that price. With the shares up only about 2% since then, the relative valuation is quite a bit more interesting today. I do have some concerns about the company's input costs and the historical ROICs and book value growth, but the company stacks up well within the paper segment and I believe management's ability to move the company with the times will serve investors well over time.

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Glatfelter Rolls With The Punches And Changes With The Times

Seeking Alpha: Can Denbury Resources Recover Market Enthusiasm?

Enhanced oil recovery specialist Denbury Resources (DNR) can generate significant cash margins over extended periods of high oil prices, but it doesn't seem to be suiting the needs and tastes of the market right now. Some investors seem disappointed that the company elected not to convert to an MLP structure, while others worry about the company's relatively modest production growth outlook and its sensitivity to lower oil prices.

I don't find Denbury strikingly cheap, at least not in comparison to some other alternatives in the market, but it offers a different risk/reward profile than many other oil stocks. With management now more focused on returning capital to shareholders and with less drillbit risk here (relative at least to companies in the Bakken, Eagle Ford, or Niobrara regions), Denbury strikes me as an option for playing a high oil price outlook with less operational risk.

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Can Denbury Resources Recover Market Enthusiasm?

Seeking Alpha: Talisman Energy Aims To Shrink And Grow Rich

"Bigger is better" is the operating mindset for many corporate executives, but that's not always the winning strategy in the energy sector. With share price performance often closely tied to debt-adjusted production growth, it can make quite a bit of sense to jettison assets that don't offer much production growth upside and/or those that require substantial investments to maintain or develop.

That brings me to the Talisman Energy (TLM) situation. While the company has legitimately interesting assets in North and South America as well as Southeast Asia, the company's North Sea assets are little more than an albatross around its neck. Talisman shares do appear to be trading below fair value, and the company appears quite committed to both asset sales and cost reductions, but there isn't any particular shortage of interesting ideas in the energy sector today.

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Talisman Energy Aims To Shrink And Grow Rich

The Motley Fool: Can Fresenius Medical Care AG & Co. Get Past Medicare Reimbursement Issues?

When Medicare plays a major role in a company's business model there always seem to be challenges. Such is the case for Fresenius Medical Care (NYSE: FMS  ) . While the company's strong global share in dialysis equipment and strong share in North American dialysis services ought to be a strong positive in the company's favor, the difficult reimbursement environment has created challenges and uncertainties in the company's model. Though there is a significant global growth in the number of patients with end-stage renal disease, Fresenius Medical Care can't afford to drop the ball when it comes to careful expense management.

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Can Fresenius Medical Care AG & Co. Get Past Medicare Reimbursement Issues?

Seeking Alpha: ARC Document Solutions Still On A Recovery Path

ARC Document Solutions (ARC) is barely followed on the Street, but this small cap document services company has undergone some pretty compelling changes even as its traditional core market (reprographic services for architecture/engineering/construction) has seen severe stress over the last six or seven years. With the company still generating around three-quarters of its revenue from that AEC end market and non-residential construction picking up, there could be good revenue and margin growth potential for a company that has already shown a good knack for maintaining FCF through tough times.

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ARC Document Solutions Still On A Recovery Path

Seeking Alpha: Can Investors Salvage Value From Homex?

About six months, I wrote that I saw little hope that severely troubled Mexican homebuilder Homex (HXM) would be able to pull itself out of a tailspin and salvage meaningful value. Since then, the shares are down about a third, the company has effectively ceased new operations, and bondholders and shareholders alike are wondering when and how the company will be able to restructure its debts and resume operations.

At the time of the company's last report, Homex had about $1 per share in book value remaining on the balance sheet. If Homex goes through a prepackaged bankruptcy similar to the one recently filed by fellow Mexican homemaker Corporacion Geo, equity holders may end up with about 10% of the company. That's better than nothing, and there is still considerable uncertainty about what a final deal will look like, but investors are looking at long odds for a happy ending to this story.

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Can Investors Salvage Value From Homex?

Seeking Alpha: Is It Too Late To Jump Into Maxwell Technologies?

About six months ago, I thought Maxwell Technologies (MXWL) looked pretty interesting, as Wall Street seemed to be incorporating pretty reasonable expectations for a company that could become a high-growth story stock. I should have followed my own advice, as although the stock drifted down through mid-December, the shares have since rocketed up on rumors of a potential partnership with electric car pioneer, Tesla Motors (TSLA).

Maxwell still has a lot to prove, not only in terms of driving OEM acceptance of its ultracapacitors, but also in terms of being able to generate meaningful margins and cash flows as the business scales up. With the stock up 50% from late September, it almost goes without saying that it is not as cheap as it was and that the expectations that go into supporting today's valuation are not as conservative.

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Is It Too Late To Jump Into Maxwell Technologies?

Seeking Alpha: WESCO Offers Another Way To Play Familiar Themes

I was lukewarm to positive on WESCO (WCC) six months ago (you can read that article here), and the stock has more or less matched the S&P 500 in the time since, rising about 10%. That's not too bad, particularly as two of the company's largest markets, industrial and construction, have yet to really rebound all that much. HD Supply (HDS) offers a lot of the same underlying exposures and market leverage, with an operational improvement kicker, but WESCO may hold more appeal for investors less inclined to gamble on an internal improvement story.

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WESCO Offers Another Way To Play Familiar Themes

The Motley Fool: Can This Drive Growth for Amarin Corporation plc?

Small-cap biopharmaceutical Amarin (NASDAQ: AMRN  ) has made it clear that the company is not giving up on Vascepa without a fight, several of them actually. In addition to challenging the FDA's decisions to rescind a Special Protocol Assessment (SPA) on the company's ANCHOR study and to refuse NCE status for the key ingredient in Vascepa, the company is now trying to augment its sales effort. A co-promotion agreement with Kowa Pharmaceuticals America will most likely cap the company's gross margin for the foreseeable future, but it adds nearly twice as many reps as Amarin has pushing the drug.

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Can This Drive Growth for Amarin Corporation plc?

Seeking Alpha: Catching Up On PowerSecure

I may have thought PowerSecure (POWR) was a worthwhile hold back in October, but the fact is this stock should have been bought then and not just held, as the shares have gone up more than 45% since then. While eating some crow on not being nearly bullish enough on this stock, I still have lingering questions about the long-term profitability and FCF generation of this business.

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Catching Up On PowerSecure

Seeking Alpha: Advanced Emissions Solutions Still Convoluted And Still Looks Undervalued

Shares of Advanced Emissions Solutions (ADES) have basically matched the market since I last wrote about the company ("Are Investors Getting Free Call Options On Advanced Emissions' Long-Tail Technologies?"), though they had been up more than 30% from last September prior to concerns about weather and an accounting restatement that has delayed fourth quarter earnings. While this is far from the simplest company that an investor could consider, it's still an interesting collection of assets that look undervalued today.

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Advanced Emissions Solutions Still Convoluted And Still Looks Undervalued

Seeking Alpha: Peabody Energy Looks For A Better Mix To Drive A Better Outcome

While it's U.S. peers like Arch Coal (ACI), James River Coal (JRCC), and Alpha Natural Resources (ANR) groan under the strain of less competitive Appalachian thermal and met coal assets, Peabody Energy (BTU) has neither. Peabody long ago got out of the Appalachian coal business and instead now offers relatively competitive thermal assets in the Powder River and Illinois Basins and met assets in Australian. Though these are far from fat times for Peabody, the company's asset mix, cost structure, and debt maturity schedule give it one of the stronger operating profiles today.

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Peabody Energy Looks For A Better Mix To Drive A Better Outcome

Seeking Alpha: Arch Coal Can't Catch A Break

Maybe the best thing that can be said about Arch Coal (ACI) recently is that the company's management has been able to execute a few transactions to give the company more breathing room. Pricing for Powder River Basin (or PRB) coal has been improving lately, but metallurgical coal pricing has continued to weaken, and Appalachian thermal coal just isn't competitive with natural gas today.

Some have called Arch Coal a long-dated call option on thermal and metallurgical coal price recoveries, and I suppose that is true to a point. It certainly has been the case in past cycles that improving prices benefit struggling operators more, so Arch Coal would likely offer more upside than Peabody Energy (BTU) or Cloud Peak Energy (CLD), were PRB prices to move into the high teens and/or met coal recovery above $160/ton.

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Arch Coal Can't Catch A Break

The Motley Fool: What You Need to Know About the Agilent Technologies Split

There is no shortage of data, analysis, and opinion out there about the virtues (or lack thereof) of spinoffs and corporate splits. They don't always work, but I do believe that Agilent (NYSE: A  ) will be one of those companies that benefits, as there really never were meaningful synergies or counter-cyclical offsets between the test and measurement operations and the life science tools and diagnostics operations. Agilent still looks a little undervalued today and even with the added cost burden of the split, the life science and diagnostic operations in particular look well worth following.

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What You Need to Know About the Agilent Technologies Split

Seeking Alpha: Low Visibility Forces A Big Reset At Itron

Smart metering company Itron (ITRI) is making it harder and harder to justify sticking one's neck out in the hopes of a turnaround. The company is an overall share leader in utility meters, but deployments haven't lived up to expectation and the company's electricity meter margins are pretty bleak. The sell-side has definitely turned on this name, slashing its revenue growth expectations by about half over the last six months. With so much skepticism, a few good quarters would likely lead to a big move in the stock, but I'm not sure there are any particular reasons to expect that any time soon.

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Low Visibility Forces A Big Reset At Itron

Seeking Alpha: Calpine Offers Some Upside To More Realistic Power Pricing

The regional markets for electricity in the U.S. are more messed up than many readers probably realize. Although the power stays on, the incentives and pricing structures have led to capacity imbalances and the prospects for more problems down the line. That's a good news / bad news situation for an independent producer like Calpine (CPN) - the good news is that this company's very efficient gas-fired generation fleet can generate attractive cash flows when pricing gets better, but the bad news is that there is little visibility on those price improvements and regulators keep trying to postpone the day of reckoning.

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Calpine Offers Some Upside To More Realistic Power Pricing

Seeking Alpha: Marvell Shares May Not Be Done Yet

The last few months have been kind to many chip stocks, with Maxim (MXIM), Marvell (MRVL), and Nvidia (NVDA) all logging double-digit returns. Marvell's run actually goes quite a bit further back, as the shares have more than doubled from their late 2012 lows. As Marvell has grown share in the hard drive controller space and announced LTE wins in China, investors have returned to the shares despite worries about a looming patent infringement award and the prospects of competing with Qualcomm (QCOM).

The sell-side seems to be getting more cautious about suppliers to the high-end smartphone market, but that's not really Marvell's core market. Although I own and prefer Broadcom (BRCM), Marvell may be undervalued enough to be worth a closer look even after this long run. Most chip stocks are bought to be sold, though, so investors shouldn't assume that this is a buy-and-forget opportunity.

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Marvell Shares May Not Be Done Yet

Seeking Alpha: Can Turnaround Efforts Put Farmer Brothers' Problems In The Past?

Right off the bat, I think it's important to note that Farmer Brothers (FARM) is riskier than average. There was an accounting restatement, the founding family has significant involvement in the firm (and not always for the best), and the company's financials do not impress whether you look at EPS, free cash flow, or book value. Fellow Seeking Alpha contributor Richard Pearson did a very thorough job of covering many of the problems of Farmer Brothers back in January ("Trouble Is Brewing At Farmer Brothers Coffee"), and though I don't agree with every point he made, I'd still suggest investors read it carefully as background material.

I am not as bearish as Mr. Pearson, but I would hardly call myself a strong bull on these shares. Reducing SKUs, improving inventory management, and more closely monitoring individual route/customer profitability should help margins. Unfortunately, a large part of this business is basically a low-margin distribution operation with few obvious competitive advantages over companies like Sysco (SYY) and with a heavy reliance upon small independent foodservice operators. Excluding the company's pension and workers comp liabilities, or offsetting them with its real estate value, the shares could trade to the mid-$20's, but this is one of those situations where I have to wonder if the hassles and risks are worth the potential rewards.

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Can Turnaround Efforts Put Farmer Brothers' Problems In The Past?

Seeking Alpha: Maxim Has Room To Run A Little Further, But Long-Term Concerns Remain

The market is telegraphing quite a bit of optimism about the chip sector for the start of 2014. Better demand from industrial and auto customers ought to help, as should a comms market driven by China's 4G rollout. As Maxim (MXIM) has exposure to all of those markets, this could be a good first half of the year for this analog chip company and the company's valuation looks a little low relative to its peer group. This may be more of a date than a long-term commitment, though, as the company's outsized exposure to Samsung and high-end smartphones are still causes for concern.

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Maxim Has Room To Run A Little Further, But Long-Term Concerns Remain

The Motley Fool: Exelixis Inc's Comet Fails To Dazzle

Astronomers have grown very cautious over the years about predicting which comets will brighten the night skies, as all too many have failed to live up to expectation. Small biotech Exelixis'  (NASDAQ: EXEL  ) own comet, the COMET-1 study of cabozantinib in metastatic castration-resistant prostate cancer, likewise has failed to live up to the most optimistic hopes. Although the stock's 25% drop on Wednesday may seem like an overreaction, the reality is that the company badly needed a winner and the absence of an early halt due to efficacy suggests that the company could face a tough battle in getting market share in the prostate cancer space.

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Exelixis Inc's Comet Fails To Dazzle

Seeking Alpha: Patience Will Pay With Brookfield Infrastructure

Brookfield Infrastructure Partners L.P. (BIP) is not for the investor looking for the quick three-bagger, nor the investor who wants a lot of flashy activity. What Brookfield Infrastructure is about is the patient allocation and investment of capital into protected businesses at prices that allow for superior long-term returns. There's a very large global base of potential assets out there, and I would look for 8% to 10% long-term annual returns from this level.

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Patience Will Pay With Brookfield Infrastructure

Seeking Alpha: Millicom Needs To Improve Margins To Unlock Value

The glory days of wireless service growth appear to be over. Most markets have at least three competing companies, and even those few remaining virgin markets have been demanding expensive concessions from operators. In the case of Millicom (OTCPK:MIICF), then, the question is whether or not the company can use better margins as a driver of shareholder value. Though the company has the opportunity to grow its cable and multi-play services in Latin America and benefit from underpenetration in Africa, management will likely find it easier to deliver incremental growth through cost containment.

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Millicom Needs To Improve Margins To Unlock Value

Seeking Alpha: Is The Medifast Model Built To Last?

When I last wrote about Medifast (MED) ("Medifast May Be The Best House On A Scary Street"), I thought that the shares certainly looked cheap, but that the risks of the weight loss industry and the company's model made it a less desirable choice. Since then, the shares are up about 13% even with two quarterly misses on revenue and more weakness than expected from weather and a challenging consumer retail environment.

As the shares have risen but the business really has not improved all that much, I find less value in the stock today. I may well be too bearish on the company's plans to franchise its Weight Control Centers, but I don't like the apparent sensitivity of revenue to promotional spending. Medifast does not seem too expensive on standard valuation metrics, but I just don't see enough momentum in the business to be all that excited by the potential.

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Is The Medifast Model Built To Last?

The Motley Fool: Is Teva Pharmaceutical Industries Ltd Turning a Corner?

Once a darling of the health care space (and a frequent member of "buy and hold forever" lists), Teva Pharmaceuticals (NYSE: TEVA  ) spent about three and a half years in the market's doghouse. Investors bailed out due to worries about competition in the company's lucrative MS franchise, the perception of a dwindling pipeline for major generics, and turmoil in executive leadership. Now it looks as though the company has shored up its MS franchise, rejuvenated its R&D efforts, and become more serious about driving better value in/from the business.

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Is Teva Pharmaceutical Industries Ltd Turning a Corner?

The Motley Fool: Will Baxter International Inc's Split Unlock Shareholder Value?

If a strategy has worked before, try it again. Baxter (NYSE: BAX  ) has never been shy about identifying businesses that lie outside its core operating focus and being willing to set them free. Edwards Lifesciences, Caremark, and Allegiance Healthcare (now part of Cardinal Health) were all once under the Baxter umbrella, and arguably did better on their own than they would have as parts of Baxter.

Now the company is doing it again, choosing to spin off its biopharmaceuticals business as an independent publicly traded company. Investors cheered the move, as it does remove some issues that were clouding the value of the company's other operations.

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Will Baxter International Inc's Split Unlock Shareholder Value?

Seeking Alpha: Francesca's Floundering, But The Model Can Still Work

The list of disappointing specialty retailers is getting longer, but Francesca's (FRAN) has really gotten on the bad side of Wall Street with a series of weak quarters. Some of the more bearish analysts are claiming that Francesca's model is fundamentally broken, and that the company's differentiated store concept just doesn't work.

With seven straight quarters of weakening sequential comps, not to mention weak merchandise margins and inventories that go against the supposed virtues of the model, it's difficult to say that the bears don't have a point. Even so, I believe it is hard to fairly judge any retail concept when miserable weather is shutting stores and keeping shoppers at home. I'd also point out that even in a disappointing year, Francesca's FCF generation was better than many retailers. If management can turn this around and resume a path to mid-teens long-term FCF growth, there is enough upside here to be worth a second look but there are many beaten-down retailers to choose from today.

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Francesca's Floundering, But The Model Can Still Work

Seeking Alpha: CapitaLand's Valuation Looks Too Low

Even though CapitaLand (OTCPK:CLLDY) (CATL.SI) has established a reputation for itself as a quality property developer in Singapore and China, investors seem to be more scared of the near-term risks in Singapore and China than attracted to the long-term potential. Trading well below its average and median price/book and price/RNAV ratios, investors seem to be incorporating pretty pessimistic expectations for the business both in 2014 and beyond. Readers considering these shares today need to appreciate the risks of swimming against the tide, but patience could pay off given the company's leverage to China's growth and management's commitment to streamline and improve operations.

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CapitaLand's Valuation Looks Too Low

Seeking Alpha: For SL Green Realty, A Rich Premium Is Richly Deserved

It's probably not accurate to say that SL Green Realty (SLG) is a universally liked office REIT, but it does seem to be the case that the objections raised by sell-side analysts are more often about value and market/concentration risk as opposed to management's plans or performance. I won't argue that SL Green is cheap right now, but the company does offer some upside to ongoing improvements in the NYC office market and from its investment portfolio.

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For SL Green Realty, A Rich Premium Is Richly Deserved

Seeking Alpha: Gordmans Stores' Merchandising Problems Linger

Discount retailer Gordmans Stores (GMAN) has been a falling knife since the fall of 2013, as the company has exacerbated a weak underlying retailing environment with poor merchandising decisions that have hit same-store sales hard and depressed margins. Although Gordmans' results weren't out of line with expectations for the quarter, they were still weak and the company announced that the CEO had elected to retire.

Gordmans Stores may benefit from a new vision or voice at the top, as the company's robust store growth of recent years is not producing compelling comp-growth. The good news here is that even in a tough quarter the company was still profitable and it does not take particularly aggressive model assumptions to suggest value in the shares. This is a speculative call, and the sell-side has slashed its price targets by almost half in the last four months, but simply stabilizing the comps could a make a significant difference.

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Gordmans Stores' Merchandising Problems Linger

The Motley Fool: Will Shire PLC Build Or Buy Its Future?

The ideal in the biotech and pharma world may be for a company to develop a strong internal R&D engine that regularly churns out potential blockbuster compounds, but the reality is that most companies have to turn to partnerships and acquisitions to manage risk and maintain growth. Shire (NASDAQ: SHPG  ) built itself into a significant biotech/pharma company on the basis of strong internal CNS and rare disease R&D efforts, but has more recently turned to M&A to improve its prospects. With Shire likely to generate considerable cash flow in the coming years, the question stands as to whether investors would be better-served with additional M&A transactions or a reinvestment into its own internal R&D capabilities.

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Will Shire PLC Build Or Buy Its Future?

Seeking Alpha: HD Supply Seeing A Turn In Non-Residential Construction

It may yet be early for all-clear on HD Supply (HDS), as "green shoots" could easily get trampled, but the company does seem to have its guidance dialed in better and underlying results are looking better. There's still some comp-group noise that has me questioning the sell-side's apparent love for this stock, but the valuation and opportunity seem in reasonable alignment these days.

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HD Supply Seeing A Turn In Non-Residential Construction

Seeking Alpha: McCormick Spanks The Skeptics, But Not Exactly A Bargain

Spice, seasoning, and packaged food giant McCormick (MKC) has long enjoyed a privileged position in the food sector, as investors have been willing to pay a premium for shares in a company that holds uncommonly high market share and ups its dividend like clockwork. The shares were caught in the downdraft that saw other food stocks trailing the S&P 500 after mid-2013, but took an even steeper move down when management handed out weak 2014 guidance at the end of January.

Analysts suddenly started worrying about valuation on stock where valuation really hadn't mattered before, but then first quarter earnings came in higher than expected and sent the shares up more than 5%. McCormick is still expensive, but bulls can build a credible argument that the company's consistent double-digit ROICs and dividend hikes merit a much lower discount rate and that the shares are still a worthwhile holding for long-term investors.

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McCormick Spanks The Skeptics, But Not Exactly A Bargain

Seeking Alpha: Neogen Priced Like The Excellent Company It Is

Following Neogen (NEOG) is frustrating, as there really isn't all that much to say from quarter to quarter. Neogen continues to acquire attractive niche businesses to augment its revenue and continues to build an appealing food safety business that goes from the farm to the factory. Neogen also continues to look shockingly expensive or, at a minimum, incorporates demanding expectations that few companies could hope to attain.

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Neogen Priced Like The Excellent Company It Is

Seeking Alpha: Gerdau's Correction Seems Overdone

Numerous Brazilian industrial companies, not to mention the Bovespa as a whole, have gotten hit hard since the start of 2014. The prior year was a volatile one as investors became more concerned about slowing growth in Brazil and difficult choices for the government regarding inflation, fiscal stimulus, and infrastructure inadequacies. Weak rainfall has exacerbated the problem, raising the prospect of electricity rationing that could lead to a meaningful decline in industrial output.

The Brazilian steel sector has gotten hit hard, with Gerdau (GGB), CSN (SID), and Usiminas (OTC:USNMY) down 25% to 40% before a recent bounce. Electricity rationing would be bad news for an already-stressed Brazilian economy, but there is more to Gerdau than just one year of performance in Brazil. As non-residential construction picks up in the U.S., Gerdau should see shipments, utilization, and margins improve, and there is at least the possibility that investors have overreacted to the potential downside in Brazil. Assuming that Gerdau deserves a multiple in line with the global average for steel, the shares look about 20% undervalued today.

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Gerdau's Correction Seems Overdone

Seeking Alpha: Fear Driving The Braskem Trading And Obscuring The Value

Chemical stocks can be volatile enough in their own right, as they are sensitive to the prices of key inputs like oil (naphtha) and natural gas and demand is typically tied to economic growth. Braskem (BAK) seems to offer additional risks, as investors worry about the impact of electricity rationing on the Brazilian economy and the company's competitiveness with gas-based cracking capacity.

Questions about the health of the Brazilian economy are valid, as the company has about two-thirds share in Brazil and over half of its sales go into this economy. Even so, the market appears to be overdoing it and the discount to other chemical companies seems to wide to ignore. I believe that fair value for Braskem starts around $20 today, making this is a notably undervalued play on Brazil's underlying economic growth as well as operational improvements that could improve the company's product portfolio and cost structure in the coming years.

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Fear Driving The Braskem Trading And Obscuring The Value

The Motley Fool: Is This Overlooked Stock Primed for More Growth?

Blood products really don't get that much attention in the health care space, but it's a market worth more than $10 billion a year excluding hemophilia products and growing around 6% to 8% a year as indications and patient identification expand. Baxter (NYSE: BAX  ) , one of the largest players in the market, is reasonably well-known to investors, but Grifols (NASDAQ: GRFS  ) is more obscure despite being one of the three largest players in the world and the largest in the U.S. As Grifols looks to leverage good underlying market growth through more efficient operations, the growth potential looks impressive.

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Is This Overlooked Stock Primed for More Growth?

The Motley Fool: Is Incyte Corporation Overvalued?

One of the secrets to successful stockpicking in the biotech sector is adequately valuing and pricing the risk/reward profile of a company's pipeline. Almost every biotech looks cheap if an investor just assumes that everything will work as planned, but the reality is that only a small percentage of pipeline prospects live up to their potential. In the case of Incyte (NASDAQ: INCY  ) , this company does have a solid product in Jakafi, but it seems as though the Street is already factoring in a fair bit of success for the company's early stage pipeline.

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Is Incyte Corporation Overvalued?

Seeking Alpha: Fears About Argentina And Mexico Have Ternium Looking Cheap

Argentina is a mess right now, and the companies with ties to that country are paying the price - some deserved, some not so much. I would place Ternium (TX) in the "not so much" camp, as although the company does generate a substantial amount of EBITDA in Argentina, the business isn't as vulnerable as valuation would suggest. More to the point, this is a well-run and growing Mexico-based steel company with some measure of influence over its input costs.

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Fears About Argentina And Mexico Have Ternium Looking Cheap

Seeking Alpha: Plum Creek Timber Biding Time

The wait for Plum Creek Timber's (PCL) realization of value from its timber assets drags on. These shares bounced up for a little while after my Top Idea write-up in September 2013 ("Patient Investors Get A Crack At Plum Creek Timber"), but declined sharply on the announcement of the acquisition of MeadWestvaco's (MWV) timberland and the concomitant equity offering. Matters were helped little when the company followed that up in January of 2014 with a weak guide for 2014 EPS on lower land sales.

Plum Creek shares have long traded at premiums to Weyerhaeuser (WY) and Rayonier (RYN) (at least on an EBITDA basis), but investors seem to be tiring of the wait for a sustained recovery in housing construction and demand for sawlogs in the southern U.S. For what small consolation it offers, it doesn't appear that Plum Creek's issues are all company-centric, as Rayonier and Potlatch (PCH) have declined by similar amounts since September and Weyerhaeuser is also in the red for that period.

I remain bullish on the long-term value of these shares, but I realize that a "be patient, it gets better" call is not the most compelling call to make, particularly with the shares trading around 19x 2014 EBITDA. A clean 2014, with higher harvest volumes and better prices, would be welcome, but patient investors can still find a lot of value in the company's substantial timberland holdings, real estate development potential, and possible biomass energy play.

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Plum Creek Timber Biding Time

Seeking Alpha: IPG Photonics Continuing To Expand Its Fiber Laser Opportunity

In the six months since I wrote on IPG Photonics (IPGP) as a Top Idea ("IPG Photonics Looking To Innovation And Integration") the shares have registered a solid 26% gain. In that time, whatever changes have come have largely been to IPG Photonics' credit - the company maintains a significant lead over the likes of Rofin-Sinar (RSTI) and the company's aggressive product development efforts continue to expand the company's addressable market and long-term revenue potential.

I believe IPG Photonics remains a quality name in this space, but the shares are not as obviously cheap as they once were. I still expect long-term revenue growth in the neighborhood of 12% and I am still willing to project long-term FCF margins in the low 20%'s. There is upside to those numbers if the company's addressable markets (and/or share within them) expand even faster, but these shares look more like a "bullish hold" than a strong buy today.

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IPG Photonics Continuing To Expand Its Fiber Laser Opportunity

Seeking Alpha: Everest Re Looks To Surmount A More Competitive Environment

The talk in insurance and reinsurance these days is almost always about pricing. A lack of major catastrophes, higher retention rates from insurance companies, and an influx of new capital has led to a lot of money chasing the business that's out there, leading to double-digit declines in prices. Everest Re (RE) seemed to withstand that in 2013, in part through new products and expanding outside peak areas.

Investors seem to doubt that the company will be able to keep up double-digit premium growth and double-digit returns on equity. It is probably true that the rate of premium increases in areas like workers comp has to slow, and likewise true that pricing will remain soft in reinsurance without an event that destroys capital. Even so, the company's underwriting history is pretty good and a long-term ROE of 11% suggests a fair value close to $175, or roughly 15% above today's price.

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Everest Re Looks To Surmount A More Competitive Environment

Seeking Alpha: As Power Markets Improve, NRG Energy Can Better Leverage Its Assets

There is a chance that independent power producer NRG Energy (NRG) can offer investors the best of both worlds. NRG's management quality has served it well through tough market periods, as the company has executed good deals to improve its market positioning and capital structure. Now, it may be approaching a period where its operating assets can outperform on the back of higher gas prices and tight capacity in key markets like Texas.

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As Power Markets Improve, NRG Energy Can Better Leverage Its Assets

The Motley Fool: Cancer Vaccines: Doomed to Fail?

Some ideas sound good in theory but just never manage to work out in real-world experience, and cancer vaccines are on their way to that destination. Following the failures of Vical and Merck KGaA with their respective cancer vaccines, GlaxoSmithKline (NYSE: GSK  ) has announced the second pivotal trial failure for its MAGE-A3 cancer vaccine. Glaxo will continue to try to identify patient sub-populations in both melanoma and lung cancer that could/do respond to a clinically significant degree, but the odds are good that this high-risk/high-reward program is on its last legs.

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Cancer Vaccines: Doomed to Fail?

Seeking Alpha: Huntington Ingalls Needs A New Driver

Since it spun out from Northrop Grumman (NOC), Huntington Ingalls (HII) has done pretty well. Shares of this pure-play Navy shipbuilder have risen about 150% in its time as a publicly-traded company, handily beating other defense and shipbuilding companies like General Dynamics (GD) and Lockheed Martin (LMT).

At least some of Huntington Ingalls' performance can be tied to its progress in improving margins, moving through an order book that included some very low-margin business and putting its 9% margin targets very much into play. The question investors should probably ask now is how the company continues to improve its results. Projecting defense spending down the line is tricky, but major projects like carriers, submarines, and destroyers could fare better. I like the prospects for Huntington Ingalls continuing to improve its profitability and free cash flow generation, but the shares seem to already reflect continuing improvement here.

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Huntington Ingalls Needs A New Driver