Arkados Group OTCBB: AKDS $0.37
Research Note
Industry: Electronics & Engineering
Rating: Speculative Buy (Reiterated)
Price Target: $2.00
By: Robert S. Stoklosa
Arkados Completes ASTER Acquisiton; Gains Important Intellectual Property; Reiterate Speculative Buy
March 26, 2007. Arkados Group, Inc. (Nasdaq: AKDS) completes the ASTER Wireless acquisition. The intellectual property is a good fit, and will broaden the reach of company to other standards and markets. We reiterate our Speculative Buy rating.
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Amarillo Biosciences Inc. OTCBB: AMAR $0.89
Research Note
Industry: Healthcare, Biotechnology & Pharmaceutical
Rating: Speculative Buy (Reiterated)
Price Target: $1.90
By: Wayne M. Lottinville, CFA
Amarillo Biosciences Adds Sites In Two Clinical Studies; Reiterate Speculative Buy
March 22, 2007. Amarillo Biosciences, Inc. (OTCBB: AMAR), recently added clinical trial sites to advance its progress for the treatment of two diseases with low-dose oral interferon-alpha. In Turkey, where the therapy is being investigated in a Phase 2 clinical study for the treatment of Behcet's disease, two new clinical sites were approved by the Turkish Ministry of Health to enroll patients. The Company also added three more clinical sites to the six currently approved in the U.S. to enroll patients in a study of HIV-positive patients suffering from oral warts. The Company's goal is to complete both studies in 2007.
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Amarillo Biosciences Inc. OTCBB: AMAR $0.89
Research Note
Industry: Healthcare, Biotechnology & Pharmaceutical
Rating: Speculative Buy (Reiterated)
Price Target: $1.90
By: Wayne M. Lottinville, CFA
Amarillo Biosciences To Announce Annual Financial Results; Reiterate Speculative Buy
March 17, 2007. Amarillo Biosciences (OTCBB: AMAR) should announce financial results for 2006 by the end of March. In our last update report on the Company on December 1, we projected Amarillo Biosciences would lose $3.1 million, or $0.14 per share, in 2006 on operating expenses of $3.0 million. The Company is also expected to provide updates on the progress of two Phase 2 clinical trials using low-dose interferon-alpha, one for treatment of Behcet's disease and a second for treating oral warts in HIV-positive patients.
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Ampex Corporation Nasdaq: AMPX $18.60
Research Note
Industry: Electronics & Engineering
Rating: Strong Buy (Reiterated)
Price Target: $35.00
By: Richard W. West, CFA
Ampex Reports 4th Quarter and Year-End 2006 Results; Eastman Kodak Summary Judgement Appealed; Strong Buy Rating Reiterated
March 22, 2007. Ampex Corporation's (NasdaqCM:AMPX) fourth-quarter and year-end results were in line with our revenue and revenue margin estimates; however, we believe that Ampex's investment value lies not in its current earnings, but in royalty income that may be created from their portfolio of patents. In our soon to be published Update Research Report, we will revisit our Worst Case/Best Case Estimates for 2007. We reiterate our Strong Buy Rating and our $35.00 price target.
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Ampex Corporation Nasdaq: AMPX $18.60
Research Note
Industry: Electronics & Engineering
Rating: Strong Buy (Reiterated)
Price Target: $35.00
By: Richard W. West, CFA
SEC Form 13D Amendment Filed on Behalf of Ampex Corporation;ValueVest Increases Ownership Position; Strong Buy Rating Reiterated
March 21, 2007. Ampex Corporation (Nasdaq:AMPX); ValueVest Management Company II, LLC, ValueVest MasterFund, et al (ValueVest), filed a fourth SEC Form 13D Amendment on behalf of Ampex Corporation, indicating an increase of ownership position in Ampex. We reiterate our Strong Buy Rating and price target of $35.00 per share.
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Ampex Corporation Nasdaq: AMPX $18.60
Research Note
Industry: Electronics & Engineering
Rating: Strong Buy (Reiterated)
Price Target: $35.00
By: Richard W. West, CFA
Ampex Corporation Announces Release Date for FY2006 Results and Conference Call Info;We Preview the Numbers;Strong Buy Rating Reiterated
March 15, 2007. Ampex Corporation (NasdaqCM: AMPX) announced on March 15, 2007, their year-end FY2006 results will be released after the markets close on Wednesday March 21, 2007. Our estimate for the fourth quarter is a loss of $(0.18) per share on revenue of $8.9 million. For the year, we are estimating total revenue of $38.0 million and a loss per diluted share of $(0.96). We reiterate our Strong Buy Rating and affirm our 12-month price target of $35.00 per share.
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American Software Inc Nasdaq: AMSWA $7.80
Research Note
Industry: Computers, Technology & Internet
Rating: Strong Buy (Reiterated)
Price Target: $9.00
By: David P. Soetebier, CFA
American Software Reports 40% Increase In Operating Earnings
March 15, 2007. American Software Inc.'s (NasdaqGS: AMSWA) operating income, at $2.96 million for its January 2007 quarter, was sharply above the $2.46 million we had been estimating. Key variations versus our estimate included much stronger performance from the New Generation Computing Group (NGC) and the AMSWA Legacy ERP software business, a greater contribution from Logility (88% owned) and higher Other income. NGC along with the ERP business reported software sales of $1.8 million compared with our estimate of $900,000 (Note: gross margins can be 90% in this business). These two businesses have been relatively flat in recent periods so this improvement was a nice change. Net income at Logility (NasdaqGM: LGTY $7.58) exceeded our estimate by about $600,000. Other income at AMSWA, at $1.4 million, was also sharply above our estimate of $508,000. The higher software sales and Other income contributed to earnings per share of $0.10 versus our estimate of $0.07. Year ago earnings were $0.08 per share. Based on the better results we have raised our estimate for the April 2007 fiscal year to $0.29 from $0.26. Our Rating remains Strong Buy with a 12-month price target of $9.00.
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Applied NeuroSolutions Inc OTCBB: APNS $0.29
Research Note
Industry: Healthcare, Biotechnology & Pharmaceutical
Rating: Strong Speculative Buy (Reiterated)
Price Target: $1.00
By: Denise T. Resnik, M.S.
Estimates of Applied NeuroSolutions Targeted Market Grow; Strong Speculative Buy Reiterated
March 20, 2007. The Alzheimer's Association released a new estimate of the number of people in the United States living with Alzheimer's disease in its annual Public Policy Forum in Washington, DC today. This report, entitled "2007 Alzheimer's Disease Facts and Figures" reported that there are currently more than 5 million people in the United States living with Alzheimer's disease, which exceeds its previous nationwide estimate of 4.5 million by 10%. This announcement continues to highlight the toll of Alzheimer's Disease in the United States and the size of the diagnostics and therapeutics market for this disease. We continue to believe that Applied NeuroSolutions (OTCBB:APNS) possesses unique intellectual property in the area of Alzheimer's disease diagnostics and therapeutics, and we reiterate our Strong Speculative Buy rating.
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Biophan Technologies, Inc. OTCBB: BIPH $0.36
Research Report
Industry: Healthcare, Biotechnology & Pharmaceutical
Rating: Neutral (Reiterated)
By: Richard W. West, CFA
Biophan Technologies Rating Maintained At Neutral; MRI Technologies Should Bring Revenues and Earnings
March 26, 2007. Since our September 26, 2006, report, several events have affected Biophan Technologies, Inc.'s (OTCBB: BIPH) balance sheet and its progress toward commercialization of its technologies by licensees. Biophan commented in its SEC Form 10Q for November 30, 2006, that it believes the Company has adequate working capital resources for the upcoming four to six months of operations. However, the Company's need for capital prompted us to reduce our rating of Biophan on February 21, 2007, to a Speculative Buy with a new price target of $2.00 per share. We then lowered our rating to Neutral on February 28, 2007, in response to Biophan's filing an SEC Form 8-K on February 27, 2007, detailing the Forbearance Agreement dated February 16, 2007, with the holders (the Note Holders) of its Senior Subordinated Convertible Notes, due October 12, 2009. We believe the closing of a Forbearance Agreement is positive for Biophan in this situation and indicates that the Note Holders are willing to discuss new terms for the Notes. We further believe that Biophan's MRI technologies (both for safety and image compatibility) and the MYOTECH MYO-VAD technology are unique to the industries addressed and, given time, will provide Biophan revenue and earnings. However, during this period of limbo for Biophan's finances, we reiterate our Neutral rating and will review the rating upon resolution of this financing.
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Clearant, Inc. OTCBB: CLRI $0.13
Research Note
Industry: Healthcare, Biotechnology & Pharmaceutical
Rating: Neutral (Reiterated)
By: Sally H. Wallick, CFA
Clearant, Inc.: 10-K Filing Could Be Delayed.
March 16, 2007. Clearant, Inc. (OTCBB: CLRI): Although Clearant's 10-K is due to be filed by the end of March, we believe that the filing could be delayed while the Company continues efforts to raise much needed capital. As discussed in previous comments, we believe that it is imperative that Clearant raise additional capital for working capital purposes and to fund its growth strategies and that it faces significant financial and operational risk if unable to do so. Our rating on these high-risk shares remains Neutral.
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Chilco River Holdings, Incorporated OTCBB: CRVH $0.74
Research Note
Industry: Leisure & Entertainment
Rating: Neutral (Reiterated)
By: Gerald F. LaKarnafeaux, CFA
Chilco River Announced Agreement In Principal To Secure Neccessary Funding For Completion of Bruce Hotel and Casino .
March 17, 2007. Chilco River Holdings (OTC BB: CRVH.OB) annouced it has entered into an agreement in principal which provides for an equity financing of up to $10.0 million.
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DXP Enterprises Inc Nasdaq: DXPE $44.60
Research Report
Industry: Industrial & Manufacturing
Rating: Strong Buy (Reiterated/Update)
Price Target: $51.00
By: Paul J. Resnik, CFA
DXP Enterprises Strong Buy Rating Maintained; Believe Investors Will Come To Increasingly Understand The Potential For Substantial Growth
March 26, 2007. DXP Enterprises Inc's (Nasdaq: DXPE) share price rose sharply after the Company reported 2006 full year results on March 15, 2007. Although the results, discussed later in the report, were in line with our expectations, the report, which was followed by the Company's first ever conference call, provided needed confirmation that DXP's strong growth trends have been unaffected by slowing economic trends. We believe investors will come to increasingly understand the potential for substantial growth as management seeks to fulfill its goal of making DXP a $1 billion sales company with a national footprint. In the meantime, a large short position (622,000 shares as of February 12) and growing institutional ownership (26.6% of shares outstanding) auger well for the stock's performance. We continue to believe that, longer term, DXP has the potential for rapid growth based on both internal gains and accretive acquisitions. Our current $51 price target for the stock, a modest $1 upward adjustment from the previous figure, is based on a 17 multiple of estimated forward 12 months' (through the first quarter of 2008) earnings per share of $3.00 and supports the maintenance of our Strong Buy rating.
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DXP Enterprises Inc Nasdaq: DXPE $44.60
Research Note
Industry: Industrial & Manufacturing
Rating: Strong Buy (Reiterated/Update)
Price Target: $51.00
By: Paul J. Resnik, CFA
DXP Enterprises Reports Strong Fourth Quarter Results in Line With Dutton Associates Estimate; Stock Advances Over 10% in Late Trading; Reiterate $50 Price Target and Strong Buy Recommendation
March 16, 2007. DXP Enterprises' (Nasdaq: DXPE) fourth quarter 2006 sales increased 45.0% to $79.4 million from $54.7 million in the year-earlier period. We consider this figure in line with our aggressive estimate of $80.2 million. Net income rose 68.1% to $3.49 million, with diluted earnings per share of $0.61 compared to net income of $2.08 million and diluted earnings per share of $0.36 for the fourth quarter of 2005. Other income of $413,000, which reflected the forced sale of a building to the State of Texas for road construction purposes, added $0.04 per share to earnings. Eliminating this sum, earnings per share came in at $0.57, matching our estimate. We are fine-tuning our 2007 sales estimate down from $347.7 million to $346.5 million but maintaining our 2007 EPS estimate at $2.73. Looking out to 2008, we are initiating preliminary estimates of sales of $416 million and EPS of $3.60. Given current general market valuation trends, we are reducing our targeted price/earnings multiple for DXP shares from 18 to 17. Based on projected EPS over the 12 months of $2.97, we are maintaining our 12-month price target of $50 and our rating of Strong Buy for these shares.
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Elron Electronic Industries LTD. Nasdaq: ELRN $13.43
Research Note
Industry: Electronics & Engineering
Rating: Strong Buy (Reiterated)
Price Target: $15.00
By: Barry Raeburn
Elron Reports Fiscal 2006 Results
March 20, 2007. Elron Electronic Industries Ltd. (NasdaqGS: ELRN; TASE: ELRN) reported fiscal 2006 results. Net profit for 2006 was $3 million ($0.10 per share), compared to $47.3 million ($1.61 per share) in 2005. Elron's 2006 revenue was $31 million from $82.6 million in 2005. A main reason for the drop was due to a fall in net capital gains to $23.7 million in 2006 from $123 million in 2005. Recall that the company's primary source of income comes from gains on the sale of portfolio companies. Elron's share in the net losses of its subsidiaries totaled $22.7 million in 2006, compared with $23 million in 2005.
We believe 2007 and 2008 will be eventful years for many companies in the Elron portfolio, primarily the private companies. Many catalysts exist as private portfolio companies are moving from R&D phases to having product generally available exiting 2006.
Elron shares currently trade at a discount to Net Asset Value. We maintain our Strong Buy rating and 12-month price target of $15.00.
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Elron Electronic Industries LTD. Nasdaq: ELRN $13.43
Research Note
Industry: Electronics & Engineering
Rating: Strong Buy (Reiterated)
Price Target: $15.00
By: Barry Raeburn
Elron Acquires 34% Stake in Second Emerging Clean Water Technology Company
March 17, 2007. Elron Electronic Industries Ltd. (NasdaqGS: ELRN) announced on March 15th that it has completed the acquisition of approximately 34% of the outstanding shares of AqWise, which provides advanced biological wastewater treatment technologies..
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Forgent Networks, Inc. Nasdaq: FORG $1.07
Research Note
Industry: Computers, Technology & Internet
Rating: Strong Speculative Buy (Reiterated)
Price Target: $2.40
By: Richard W. West, CFA
Forgent Networks' Stock Weakness is Puzzling;Presents a Buying Opportunity;Reiterate Strong Speculative Buy Rating
March 20, 2007. After Forgent Networks, Inc. (NasdaqGM:FORG)reported, March 1, 2007, its second profitable quarter in a row, its common stock has sold down from an intra-day high of $1.24 to its present lower level. On a technical basis, this weakness does not bode well for Forgent, but sometimes selling just begets selling.... We reiterate our Strong Speculative Buy Rating and our $2.40 price per share target.
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Green Plains Renewable Energy NasdaqNM: GPRE $20.10
Research Report
Industry: Oil, Gas & Energy
Rating: Strong Speculative Buy (Reiterated/Update)
Price Target: $58.00
By: Paul J. Resnik, CFA
Green Plains Renewable Energy Rated Strong Speculative Buy In Update Coverage; Turn Profitable In The Fourth Quarter of 2007
March 14, 2007. Green Plains Renewable Energy (Nasdaq: GPRE; AMEX: GPRE) is currently building two 50-million-gallon dry mill ethanol plants; one in Shenandoah, Iowa and another in Superior, Iowa. The projected annual production capacity of each of the plants under construction is approximately 55 million gallons of ethanol and 176,000 tons of animal feed (we assume the plant will run at about 10% above the nameplate level). The Shenandoah plant is scheduled to be completed by mid-2007 and the Superior plant should be in operation by the beginning of 2008. Despite rapid growth in demand for ethanol, the shares of ethanol producers have been weak based on concerns that the rapid build-up of ethanol production capacity will depress the price of ethanol and create tight supply conditions, and therefore higher prices, for corn. However, ethanol prices have firmed recently, mirroring an uptick in gasoline prices, and the current April Chicago Board of Trade (CBOT) contract price of $2.32/gallon is well above the $2.00 level upon which we have based our earnings projections. Corn on the other hand, now trades at about $4.00/bushel versus levels well below $2.50 a year ago. We believe a sharp increase in acreage devoted to corn will bring prices down to the $3.00 - $3.50 area later this year. We believe Green Plains will turn profitable in the fourth quarter of 2007 and our $58.00 target represents a better than doubling in the stock price.
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Harbin Electric, Inc. Nasdaq: HRBN $12.00
Research Report
Industry: Industrial & Manufacturing
Rating: Strong Speculative Buy (Reiterated/Update)
Price Target: $16.02
By: Stanley Ng
Harbin Electric Strong Speculative Buy Rating Reiterated in Update Report
March 22, 2007. Harbin Electric is a dominant player in China's fast growing linear and specialty motors for the automobile market. It is the only domestic company in China with its own patented manufacturing technologies in producing linear motors, which are experiencing a rapid increase in demand due to advantages of speed, simplicity and accuracy, energy efficiency, reliability and being maintenance free over traditional rotary motors. The Company recently reported robust fourth quarter and fiscal 2006 financial results, with both revenue and exceptional core earnings ahead of our projections in our initial reports released in October 2006. Based on an 18 times 2007 P/E, our new 12-month price target is $16.02. With nearly 40% upside potential, we reiterate our Strong Speculative Buy recommendation on the stock.
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Harbin Electric, Inc. Nasdaq: HRBN $12.00
Research Note
Industry: Industrial & Manufacturing
Rating: Strong Speculative Buy (Reiterated/Update)
Price Target: $16.02
By: Stanley Ng
Harbin Electric's Robust Fourth Quarter and Non-cash Items Lifts Fiscal 2006 Financial Results; Earnings Forecasts for 2007 and 2008 and Price Target Under Review
March 13, 2007. Harbin Electric, Inc. Recently Announced Strong 4Q06 and Fiscal 2006 Financial Results
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HydroGen Corporation NasdaqCM: HYDG $4.44
Research Note
Industry: Oil, Gas & Energy
Rating: Speculative Buy (Reiterated)
Price Target: $8.25
By: Sally H. Wallick, CFA
HydroGen Corporation Reports 2006 Results; Makes Progress On Business Plan; Speculative Buy Reiterated
March 15, 2007. HydroGen Corp. (NasdaqCM: HYDG) reported fourth quarter 2006 revenue of $610,721 and an operating loss of $7.4 million or $0.67 per share. Since HydroGen is in the early stages of commercializing its fuel cell products, we do not believe that the year's results reflect the Company's long-term potential. During 2006 and thus far in 2007, we believe that the Company made significant progress on its business plan. Most recently, in February, HydroGen announced the mechanical completion of its 400 kilowatt phosphoric acid fuel cell module demonstration and acceptance test facility and initiation of pre-commissioning activities. The test facility will be used for demonstration and acceptance testing of 400 kilowatt fuel cell modules manufactured in HydroGen's Versailles, Pennsylvania plant. We rate HydroGen's shares Speculative Buy. We consider the shares appropriate for aggressive investors willing to accept the above-average risk inherent in an early-stage company that is not yet profitable.
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HydroGen Corporation NasdaqCM: HYDG $4.44
Research Note
Industry: Oil, Gas & Energy
Rating: Speculative Buy (Reiterated)
Price Target: $8.25
By: Sally H. Wallick, CFA
HydroGen Corp. Makes Progress On Growth Strategies; Fourth Quarter Preview
March 14, 2007. HydroGen Corp. (NasdaqCM: HYDG): We expect HydroGen to report fourth quarter results by the end of March. Since HydroGen is in the early stages of commercializing its fuel cell products, we do not believe that the results will be indicative of its long-term potential. More important, in our opinion, is evidence that the Company is achieving the goals set out in its business plan. During 2006 and thus far in 2007, we believe that the Company made significant progress on this plan. Most recently, in February, HydroGen announced the mechanical completion of its 400 kilowatt phosphoric acid fuel cell module demonstration and acceptance test facility and initiation of pre-commissioning activities. The test facility will be used for demonstration and acceptance testing of 400 kilowatt fuel cell modules manufactured in HydroGen's Versailles, Pennsylvania plant. We rate the Company's shares Speculative Buy. We consider the shares appropriate for aggressive investors willing to accept the above-average risk inherent in an early-stage company that is not yet profitable.
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IntegraMed America Inc NasdaqNM: INMD $14.84
Research Note
Industry: Healthcare, Biotechnology & Pharmaceutical
Rating: Strong Buy (Reiterated)
Price Target: $15.00
By: Richard W. West, CFA
IntegraMed America, Inc.'s Fourth Quarter and FY2006 Results Reviewed; Strong Buy Rating Reiterated
March 26, 2007. IntegraMed America, Inc. (NascaqNM: INMD) provides management services to medical providers specializing in reproductive health care. IntegraMed's fourth quarter and year-ended 12/31/2006 comparative results show the effect of an adjustment to reduce the fourth-quarter tax provision and a change in accounting for recording sales of pharmaceutical products as revenue and cost of pharmaceutical products as a cost of service. The stock is now selling at Dutton Associates's 12-month price target set on March 15, 2006. A Research Report update will shortly be published wherein we will review estimates and the price target. We reiterate the Strong Buy Rating.
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Joystar Inc. OTCBB: JYSR $0.92
Research Note
Industry: Leisure & Entertainment
Rating: Strong Speculative Buy (Reiterated)
Price Target: $1.50
By: Richard W. West, CFA
Joystar, Inc. Appoints New Chief Financial Officer;Strong Speculative Buy Reiterated
March 22, 2007. Joystar, Inc. (OTCBB:JYSR), a host-based leisure travel agency network and seller of cruises, announced the appointment of Jerry Galant as its new Chief Financial Officer. Mr. Galant is a financial executive whose over 30 years of experience ranges from start-ups to large multi-national corporations. We reiterate our Strong Speculative Buy Rating and maintain our 12-month price target of $1.20 per share.
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Arcadia Resources, Inc. AMEX: KAD $2.25
Research Note
Industry: Healthcare, Biotechnology & Pharmaceutical
Rating: Buy (Change)
Price Target: $3.25
By: David Riedel
Arcadia Resources - Well-positioned to Benefit from Ongoing Changes in U.S. Healthcare - 60% Upside - Upgrade to BUY
March 19, 2007. Arcadia Resources (AMEX: KAD) shares have been weak recently (down from $3.25 in November to about $2.00 today) as a result, we believe, of market frustration with the pace of progress on new initiatives and profitability. We believe, however, that the set of skills and assets that the company has been assembling will provide patient investors with an attractive return as the company is well positioned to benefit from on-going changes in the US healthcare industry.
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Lime Energy Co. OTCBB: LMEC $0.95
Research Note
Industry: Oil, Gas & Energy
Rating: Strong Speculative Buy (Reiterated)
Price Target: $2.00
By: Richard W. West, CFA
Lime Energy Co. Extends Rights Offering; Strong Speculative Buy Reiterated
March 26, 2007. Lime Energy Co. (OTCBB:LMEC), announced Friday, March 23, 2007, a one-week extension of its current rights offering, which has been distributed to stockholders of record as of February 23, 2006. Lime Energy decided that this is in the best interest of all stockholders, and is allowing a one week extension, holding the rights offering open until 5:00 p.m., EST, on Friday, March 30th. We reiterate our Strong Speculative Buy and $2.00 per share price target.
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Lime Energy Co. OTCBB: LMEC $0.95
Research Note
Industry: Oil, Gas & Energy
Rating: Strong Speculative Buy (Reiterated)
Price Target: $2.00
By: Richard W. West, CFA
Lime Energy Co. Reports Preliminary Results of Q4/2006 and FY2006: Restructuring and Full Company Integration Completed in FY2006;Strong Speculative Buy Reiterated
March 13, 2007. On March 12, 2007, Lime Energy Co. (OTCBB:LMEC) announced its fourth-quarter 2006 and full-year 2006, results with numbers showing improvement in revenue and with gross profits in both periods. The stock market has yet to recognize the massive changes Lime Energy has achieved. We believe that as the coming quarters are reported, the stock market will recognize the "new" Lime Energy Co. We reiterate our Strong Speculative Buy and $2.00 price target.
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Lime Energy Co. OTCBB: LMEC $0.95
Research Note
Industry: Oil, Gas & Energy
Rating: Strong Speculative Buy (Reiterated)
Price Target: $2.00
By: Richard W. West, CFA
Lime Energy to Conduct Conference Call to Discuss 4Q/2006 and Full-Year 2006;Rights Offering Instructions Clarified;Strong Speculative Buy Reiterated
March 13, 2007. Lime Energy Co. (OTCBB:LMEC) has scheduled a conference call for this Wednesday, March 14th, at 11 a.m. ET to discuss the results from its fourth-quarter 2006 and full-year 2006, and to provide a general company update.
Lime Energy today released information for clarification regarding its current rights offering, which has been distributed to stockholders of record as of February 23, 2006. We reiterate our Strong Speculative Buy and $2.00 per share price target.
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Lantronix, Inc. Nasdaq: LTRX $1.65
Research Report
Industry: Electronics & Engineering
Rating: Strong Speculative Buy (Reiterated)
Price Target: $2.50
By: David P. Soetebier, CFA
Lantronix Rating of Strong Speculative Buy Maintained; Expect Lantronix's Growth To Accelerate Over The Intermediate Term From The Introduction Of Multiple Products In The Past Two Years
March 16, 2007. Lantronix (Nasdaq: LTRX) offers investors the most leveraged way to participate in the developing machine-to-machine (M2M) connectivity industry with 73% of its revenues from M2M sales. Computers generally have networking ability but machines do not. However, by 2010, an estimated 95% of all devices connected will not be computers, but rather machines or devices representing a $10 billion market opportunity (Source: Forrester). We expect Lantronix's growth to accelerate over the intermediate term from the introduction of multiple products in the past two years, (13 in the past 12-months) including an important wired networking component (XPort Direct) priced under $20 that should broadly expand the market for networking devices. Although the industry is still in the development stage, Lantronix already offers a broad product line and has a highly experienced management team that we believe can capitalize on this market potential. We believe investors have failed to value the company relative to this growth potential. Consequently, we consider the shares undervalued at the recent price of $1.61. Our rating is Strong Speculative Buy with a 12-month target of $2.50.
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Maine & Maritimes Corporation AMEX: MAM $18.56
Research Note
Industry: Oil, Gas & Energy
Rating: Buy (Reiterated)
Price Target: $20.00
By: Sally H. Wallick, CFA
Maine & Maritimes Corporation Names Brent Boyles President and CEO; Buy Reiterated.
March 19, 2007. Maine & Maritimes Corporation (AMEX: MAM) announced the appointment of Brent Boyles as the Company's President and Chief Executive Officer (CEO) effective May 8. He will continue to serve as President and CEO of Maine Public Service Company, Maine & Maritimes' regulated electric distribution and transmission subsidiary. We believe that Mr. Boyles is an excellent choice, given his 23 years of experience in the regulated utility industry across a broad spectrum of functions, including corporate planning, regulatory compliance, rate design and operations. Maine & Maritimes recently announced plans to divest its unregulated operations and refocus on its regulated business. We rate the Company's shares Buy.
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Maine & Maritimes Corporation AMEX: MAM $18.56
Research Note
Industry: Oil, Gas & Energy
Rating: Buy (Reiterated)
Price Target: $20.00
By: Sally H. Wallick, CFA
Maine & Maritimes To Divest Unregulated Operations; Focus On Core Regulated Utility. Rating Upgraded From Speculative Buy to Buy.
March 17, 2007. Maine & Maritimes Corporation (AMEX: MAM) in conjunction with reporting fourth quarter and full year 2006 results, said that it will divest its unregulated operations and return to a focus on its regulated business, Maine Public Service Company (MPS), an electric transmission and distribution utility serving Northern Maine. As a result, its unregulated businesses have been reclassified as discontinued operations. This decision was based on: (1) The poor performance of the unregulated businesses. (2) MPS's history of solid earnings, cash flow and shareholder returns. (3) A more favorable political and regulatory environment for electric utilities, which the board believes is creating new growth opportunities for the regulated business. and (4) Maine & Maritimes' core competencies in regulated utility operations. We concur with the board's decision and view this return to the Company's roots as a positive development with the potential to result in improved financial performance and greater shareholder value long term. Also, we believe that a more focused Company with a less complex structure may have greater appeal to some investors who found its diversified portfolio of businesses confusing and difficult to analyze. Maine & Maritimes expects to complete the divesture of the unregulated businesses within the next year. We have not yet discussed the Company's change in strategic direction with management and, therefore, cannot project its effect on future operating results. For the time being, we are maintaining our $0.50 per share 2007 earnings estimate for the Company, but will review and perhaps revise this estimate once we talk with management. During the 12 months ended December 31, 2006, Maine & Maritimes lost $5.92 million or $3.62 per share (versus a loss of $220,000 or $0.13 per share in 2005). Income from continuing operations was $804,000 or $0.49 per share. Discontinued operations lost $4.11 per share, including the estimated loss on the divestiture of the unregulated businesses. We are changing our rating on the Company's shares from Speculative Buy to Buy.
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MortgageBrokers.com Holdings OTCBB: MBKR $0.79
Research Note
Industry: Banks, Financial Services & Insurance
Rating: Strong Speculative Buy (Reiterated)
Price Target: $1.50
By: Richard W. West, CFA
MortgageBrokers.com Details Strong Canadian Mortgage and Housing Market;Business Model in Place to Benefit From U.S. Slowdown;Strong Speculative Buy Rating Reiterated
March 19, 2007. MortgageBrokers.com (OTCBB:MBKR), in a press release, dated March 19, 2007, detailed its view on the strength of the Canadian mortgage and housing market that is being driven by moderate interest rates, high employment, continued strong immigration to Canada, and strong consumer confidence, in contrast with the U. S. mortgage market that is experiencing high default rates. Because of its Canadian base and unique business model, we believe that Mortgage.Brokers.com is a sleeper in the mortgage industry. We reiterate our Strong Speculative Buy Rating and price target of $1.50 per share.
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Medivation, Inc. Nasdaq: MDVN $19.37
Research Note
Industry: Healthcare, Biotechnology & Pharmaceutical
Rating: Strong Speculative Buy (Reiterated)
Price Target: $27.00
By: Wayne M. Lottinville, CFA
Medivation Presents Alzheimer's Data To International Conference; Reiterate Strong Speculative Buy
March 19, 2007. Medivation, Inc. (Amex: MDV), recently presented six-month results from last year's Alzheimer's trial to the 8th International Conference on Alzheimer's and Parkinson's Diseases: Progress and New Perspectives. The randomized, double-blinded, placebo-controlled Phase 2 efficacy trial of 183 patients with mild-to-moderate Alzheimer's disease was conducted at multiple sites in Russia. Patients treated with Medivation's therapeutic candidate were significantly improved compared to patients taking placebo on all five efficacy endpoints studied.
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Medivation, Inc. Nasdaq: MDVN $19.37
Research Report
Industry: Healthcare, Biotechnology & Pharmaceutical
Rating: Strong Speculative Buy (Reiterated)
Price Target: $27.00
By: Wayne M. Lottinville, CFA
Medivation Strong Speculative Buy Rating In Update Coverage;Three Promising Therapies With Potential To Advance Treatment Results In The Fights Against Alzheimer's disease, Huntington's disease and Prostate Cancer
March 15, 2007. Medivation (AMEX: MDV) recently said that preclinical data suggest that the Company's lead development candidate for hormone-refractory prostate cancer treatment is effective in a mouse model of the disease. Results of the research showed treatment was associated with a significant dose-dependent reduction in tumor volume in human hormone-refractory prostate tumors grown in mice. In October, Medivation announced compelling Phase 2 clinical results for the treatment of Alzheimer's disease. Not only did treated patients show an improvement over placebo, but also they demonstrated a significant improvement over baseline for all five endpoints of the study. In Huntington's disease, the Company initiated a two-part Phase 1-2a clinical trial in October 2006. The second phase of the study is expected to begin in the first half of 2007 with efficacy data reported in the second half of this year. Based on the dramatic and promising results from Medivation's Phase 2 Alzheimer's study, on the recently announced preclinical results in the Company's prostate cancer investigation, and on our perceptions of management's capabilities, we believe that the Company has a better than average opportunity to clear regulatory hurdles and ultimately win FDA approval for one or more of its development programs. We assume that Medivation wins approval of its drug candidate for treatment of Alzheimer's by 2011 and that by 2013 sales reach $1.3 billion. Discounting a price-to-sales multiple of 5x, we calculate a 2008 price target of nearly $27.00 per share. Based on this price target and timeline, we rate Medivation's shares a Strong Speculative Buy.
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MediciNova, Inc. NasdaqGM: MNOV $10.78
Research Note
Industry: Healthcare, Biotechnology & Pharmaceutical
Rating: Strong Speculative Buy (Reiterated)
Price Target: $20.00
By: Wayne M. Lottinville, CFA
MediciNova To Present At Healthcare Conference; Reiterate Strong Speculative Buy
March 15, 2007. MediciNova, Inc. (NasdaqGM: MNOV; Osaka: 4875), will offer investors an overview of the Company and its clinical progress at a healthcare conference in Miami Beach on March 19. MediciNova is developing eight unique, differentiated small molecules for 10 different therapeutic indications. The Company's development programs include therapeutic drug candidates for treatment of asthma, multiple sclerosis, cancer, and urinary incontinence. Most of these programs are in advanced clinical testing.
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National Coal Corporation Nasdaq: NCOC $4.57
Research Note
Industry: Oil, Gas & Energy
Rating: Speculative Buy (Reiterated)
Price Target: $6.35
By: Richard R. Wolfe, CFA
National Coal Fourth Quarter Results
March 23, 2007. National Coal Corp. (NasdaqGM: NCOC) released fourth quarter and full year 2006 results on March 23, 2007 showing continued adverse impact from sluggish coal markets. The company's net loss was $0.48 per share compared to our forecast net loss of $0.21 per share. Discretionary cash outflows were $4.6 million, compared to our forecast of a cash inflow of $0.8 million.
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Neoprobe Corporation OTCBB: NEOP $0.24
Research Report
Industry: Healthcare, Biotechnology & Pharmaceutical
Rating: Strong Speculative Buy (Change)
Price Target: $1.30
By: Dennis C. Fischer, CFA
Neoprobe Upgraded to Strong Speculative Buy Rating in Update Report
March 22, 2007. Neoprobe Corporation (OTCBB: NEOP) engages in the development and commercialization of surgical and diagnostic products. We believe Lymphoseek®, a proprietary radiopharmaceutical intended for use in biopsy procedures for the detection of cancer cells in lymphatic tissues in a variety of tumor types, including breast, melanoma, prostate, gastric and colon cancers, provides substantial potential and will be the impetus for the Company's emergence into profitability in 2009. Currently in Phase II clinical trials, Lymphoseek has clear advantages over existing compounds on the market that are being used off label for this indication. We are upgrading Neoprobe's rating from Speculative Buy to Strong Speculative Buy and establishing a 12-month price target of $1.30.
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Nutrition 21 Inc Nasdaq: NXXI $1.73
Research Report
Industry: Healthcare, Biotechnology & Pharmaceutical
Rating: Strong Buy (Reiterated/Update)
Price Target: $2.75
By: William R. Prather, RPh, MD
Nutrition 21. Strong Buy Rating Reiterated in Update Report
March 21, 2007. Nutrition 21 Inc. (Nasdaq: NXXI) is a nutritional bioscience company. Our FY2007 revenue forecast of approximately $47 million, represents approximately a four-fold increase over FY2006 revenues, with the projected product sales mix shifting towards finished products being sold through higher margin retailers, and sustained profitability estimated to begin in Q4 of this year. This revenue increase will come from sales of Chromax® (chromium picolate marketed to vitamin and supplement manufacturers) and Diachrome® (for type-2 diabetes) as well as from products obtained in the Iceland Health acquisition (markets and sells a line of products that contain fish oil and omega-3 fatty acids). We are maintaining our Strong Buy rating on the stock and establishing a 12-month price target of $2.75.
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Oragenics Inc AMEX: ONI $0.94
Research Note
Industry: Healthcare, Biotechnology & Pharmaceutical
Rating: Speculative Buy (Reiterated)
Price Target: $3.75
By: Wayne M. Lottinville, CFA
Oragenics Expected To File 2006 Financial Results; Reiterate Speculative Buy
March 19, 2007. Oragenics, Inc. (Amex: ONI), is expected to announce financial results for 2006 by the end of March. In our last update report on the Company on November 28, we projected Oragenics would lose $2.9 million, or $0.15 per share, in 2006 on operating expenses of $3.0 million. In a February letter to shareholders, management predicted that one or more licensing deals might be signed this year. The Company is negotiating the licensing of its mouthwash for maintaining oral health, and is continuing to develop a method of producing a sufficient quality of its antibiotic candidate for human clinical trials.
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O2Diesel Corp AMEX: OTD $0.78
Research Note
Industry: Oil, Gas & Energy
Rating: Speculative Buy (Reiterated)
Price Target: $2.25
By: Sally H. Wallick, CFA
O2Diesel Corporation Quarter Previewed; Company Enters Into Supply Agreement With Fair Energy.
March 16, 2007. O2Diesel Corporation (AMEX: OTD): We expect O2Diesel to file its 2006 10-K by late March. We anticipate fourth quarter results similar to those reported in recent periods, with modest revenue and a small loss per share. During the fourth quarter and thus far in 2007, O2Diesel has made significant progress on its business plan of commercializing its ethanol-diesel fuel blend including supply agreements with Singapore-based Energenics Pte Ltd. for Asia Pacific and South Africa and Geneva-based Fair Energy S.A for certain South American countries and Switzerland and the signing of a definitive agreement to acquire 80% of ProEco Energy Company, Inc., which is developing a 100-million-gallon ethanol plant. We reiterate our Speculative Buy rating on the Company's common stock.
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O2Diesel Corp AMEX: OTD $0.78
Research Report
Industry: Oil, Gas & Energy
Rating: Speculative Buy (Reiterated)
Price Target: $2.25
By: Sally H. Wallick, CFA
O2Diesel Speculative Buy Rating Reiterated In Update Coverage; Announces Acquisition of ProEcho Energy Who Is Building 100 mm Gallon Ethanol Plant
March 14, 2007. O2Diesel (AMEX: OTD) has developed a proprietary additive technology, O2D05, which facilitates the blending of ethanol, an oxygenate, in diesel fuel, resulting in a proprietary, clean-burning fuel called O2Diesel™. Extensive testing has shown that the use of O2Diesel alone or with other emission-control devices can produce significant and verifiable reductions in diesel engine emissions. Management's business strategy is aimed at commercializing the Company's products in the U.S. and internationally. Its initial target market is centralized fleets of diesel-powered vehicles. During 2006 and thus far in 2007, O2Diesel achieved important milestones toward commercializing its products in the U.S. and internationally. Notable achievements include a partnership agreement with Energenics to market O2Diesel (using the name EnerDiesel) in Asia; the planned acquisition of ProEco Energy Company, Inc., which is developing a 100-million-gallon ethanol plant in South Dakota; and contracts with municipal and corporate customers and the Department of Defense (DoD) in the U.S. We view the proposed ProEco acquisition as a bold move with the potential to provide a number of significant benefits to O2Diesel. Most importantly, it should give O2Diesel access to a reliable supply of ethanol at very competitive costs, enabling it to market O2Diesel to large national customers in the U.S. at a price below that of regular diesel, and, therefore, strengthening its competitive position. In 2005, the Company reported total revenue of $195,607 and an operating loss of $7.5 million, and its revenue and operating loss for the nine months ended September 30, 2006 were $141,201 and $6.4 million, respectively.
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PacificHealth Laboratories Inc. OTCBB: PHLI $1.85
Research Note
Industry: Healthcare, Biotechnology & Pharmaceutical
Rating: Speculative Buy (Reiterated)
Price Target: $2.00
By: Jonathan H. Ziegler, CFA
PHLI announces a positive amendment to its agreement with Mott's LLP, a division of Cadbury Schweppes Americas Beverage
March 20, 2007. PacificHealth Laboratories, Inc. (OTCBB: PHLI), a nutrition announced today that it has amended its original license agreement with Mott's LLP, a division of Cadbury Schweppes Americas Beverage ("CSAB"). The amended agreement adds 26 countries to PacificHealth's exclusive, royalty-free license to manufacture, distribute and market ACCELERADE and ENDUROX R4 brands in powder and gel, bringing the total to 47 countries representing all of the major markets in the world.
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PacificHealth Laboratories Inc. OTCBB: PHLI $1.85
Research Note
Industry: Healthcare, Biotechnology & Pharmaceutical
Rating: Speculative Buy (Reiterated)
Price Target: $2.00
By: Jonathan H. Ziegler, CFA
PacificHealth Labs Announced Its Fourth Quarer And Year-end Results; Total Quarter Revenues Up 51.2% to $1.11 Million EPS Were ($0.03) Compared To Our $0.00 Estimate
March 13, 2007. PacificHealth Laboratories, Inc. (OTCBB: PHLI) reported fourth quarter and year-end results. While reported revenues for the quarter of $1.1 million exceeded our estimate by 16.5%, and were up 51.2% from the year-ago quarter, expenses were somewhat higher than we had estimated and, consequently, reported EPS of ($0.03) missed our estimate of break-even.
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Pointer Telocation Nasdaq: PNTR $10.73
Research Note
Industry: Business & Support Services
Rating: Strong Buy (Reiterated)
Price Target: $18.00
By: Rafael K. Kapelinski
Pointer Telocation (PNTR): Signs Another Acquisition MOU
March 19, 2007.
Pointer Telocation has today announced the signing of a non-binding Memorandum of Understanding to acquire the assets and liabilities of Cellocator Ltd., a private Israeli company active in the field of cellular location-based services and technology.
The closing of the transaction is expected in June 2007 subject to the completion of a due diligence process to the satisfaction of Pointer, and reaching a definitive agreement.
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Provectus Pharmaceuticals Inc OTCBB: PVCT $1.57
Research Note
Industry: Healthcare, Biotechnology & Pharmaceutical
Rating: Strong Speculative Buy (Reiterated)
Price Target: $3.90
By: Wayne M. Lottinville, CFA
Provectus Expected To Soon Release 2006 Financial Results; Reiterate Strong Speculative Buy
March 19, 2007. Provectus Pharmaceuticals, Inc. (OTCBB: PVCT), is expected to release financial results for 2006 by the end of March. In our last update report on the Company on November 29, we projected Provectus would lose $9.1 million, or $0.24 per share, in 2006 on operating expenses of $7.3 million. Based on early reports, we expect the full Phase 1 clinical trial results for treating metastatic melanoma and breast cancer with Provecta will prove largely positive and provide supporting data for Provectus to launch Phase 2/3 of these development programs in 2007. A Phase 1 liver cancer trial and a Phase 2 psoriasis trial are also expected to begin in 2007.
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Provectus Pharmaceuticals Inc OTCBB: PVCT $1.57
Research Note
Industry: Healthcare, Biotechnology & Pharmaceutical
Rating: Strong Speculative Buy (Reiterated)
Price Target: $3.90
By: Wayne M. Lottinville, CFA
Provectus To Boost Investor Relations Capabilities, Increase Awareness; Reiterate Strong Speculative Buy
March 13, 2007. Provectus Pharmaceuticals, Inc., will ramp up its investor relations and corporate communications capabilities with the hiring of The Investor Relations Group. The IR firm plans to introduce Provectus to prequalified fund managers and industry analysts with the goal of increasing investor and industry awareness of the Company. The Investor Relations Group also intends to shape Provectus' message to the public and the media.
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Questar Assessment, Inc. OTCBB: QUSA $5.25
Research Note
Industry: Publishing & Media
Rating: Buy (Reiterated)
Price Target: $8.00
By: Sally H. Wallick, CFA
Questar Assessment, Inc.: Symbol Changes to QUSA; Buy Rating Maintained.
March 22, 2007. Questar Assessment, Inc. (OTCBB: QUSA): Effective March 16, 2007, Touchstone Applied Science Associates, Inc. changed its corporate name to Questar Assessment, Inc. As of March 22, 2007, the Company's trading symbol on the NASDAQ Over-the-Counter Bulletin Board changed to QUSA. Touchstone (now Questar) acquired Questar Educational Systems in May 2006. As a result of this acquisition, the combined Company now offers one of the most comprehensive portfolios of assessment services in the industry. The rationale for the name change was to unify all of Questar's operating units under a single, highly recognizable brand, enhancing the Company's ability to market as an integrated provider of assessment services and streamlining its marketing and sales efforts. We rate the shares Buy.
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Questar Assessment, Inc. OTCBB: QUSA $5.25
Research Note
Industry: Publishing & Media
Rating: Buy (Reiterated)
Price Target: $8.00
By: Sally H. Wallick, CFA
Questar Assessment, Inc.: 1QFY07 Revenue Up 212%; EBITDA Improves To $0.09 Per Share From $0.03 Per Share Loss; Buy Rating Maintained.
March 19, 2007. Questar Assessment, Inc. (OTCBB: TASA) (formerly Touchstone Applied Science Associates, Inc.) reported a more than a tripling of first quarter fiscal 2007 revenue year over year to $9.6 million, as a result of a $5.9 million revenue contribution from Questar Educational Systems, which the Company acquired in May 2006, and 20% revenue growth at its pre-acquisition businesses. The quarter's operating loss was $456,000 or $0.09 per share versus a loss of $170,000 or $0.06 per share in the first quarter of fiscal 2006. Incremental amortization expense associated with the intangible assets acquired from Questar reduced earnings by $0.08 per share. Earnings before interest, taxes, depreciation and amortization, or EBITDA, totaled $442,000 or $0.09 per share in the first quarter. On a pro forma basis, the Company's first quarter revenue increased 16% year over year, and EBITDA was up 70%. We are maintaining our fiscal 2007 estimate of a $0.06 per share diluted loss for the Company. This loss largely is a result of incremental amortization, and the Company's EBITDA outlook remains positive. Therefore, we are maintaining our Buy rating on the Company's shares, which are trading at about 7 times projected fiscal 2007 EBITDA, well below the average of 15.5 times trailing-twelve-month EBITDA for 19 other publicly traded companies in the education industry.
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Questar Assessment, Inc. OTCBB: QUSA $5.25
Research Report
Industry: Publishing & Media
Rating: Buy (Reiterated)
Price Target: $8.00
By: Sally H. Wallick, CFA
Touchstone Applied Sciences Rating Maintained At Buy; The Questar Acquisition Was The Defining Event of Fiscal 2006; Trading At Only 5.4x Projected Fiscal 2007 EBITDA Vs 15.5 Industry Average
March 16, 2007. Touchstone (OTCBB: TASA) reported a more than doubling of fiscal 2006 revenue year over year to $23.7 million, as a result of a $9.9 million revenue contribution from Questar Educational Systems, which the Company acquired in May 2006, and 18% revenue growth at its pre-Questar businesses. In fiscal 2006, Touchstone booked a number of charges and other items that reduced operating income $1.78 million. The Company reported a fiscal 2006 operating loss of $888,000, versus an operating profit of $627,000 in fiscal 2005, and a net loss of $1.125 million, or $0.23 EPS, diluted, versus a net profit of $433,000, or $0.14 EPS in fiscal 2005. EBITDA totaled $1.3 million or $0.27 per share, flat with EBITDA of approximately $1.3 million in fiscal 2005. On a pro forma basis, the Company's fiscal 2006 revenue would have been $45.1 million, up 20% year over year, and EBITDA would have been $6.5 million versus $6.3 million. Two recent accounting changes will affect Touchstone's fiscal 2007 results and are discussed in the report. Taking into account these changes, we reduced our fiscal 2007 estimate for Touchstone from a $0.43 per share profit to a $0.06 per share loss. Our EBITDA estimate for fiscal 2007 is $5.2 million or $1.05 per share. TASA shares are trading at only 5.4x projected fiscal 2007 EBITDA, well below the average of 15.6x trailing 12-month EBITDA for 19 other publicly traded companies in the education industry.
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Raser Technologies Inc. NYSE: RZ $5.14
Research Note
Industry: Industrial & Manufacturing
Rating: Not Rated (Reiterated)
Price Target: N/A
By: Gerald A. Rothstein, CFA
Raser Technology Receives AMP Note Payment
March 20, 2007. Raser Technologies Inc. (NYSE: RZ) announced today that AMP Resources had paid Raser the $6 million note, on which payment had been delayed, in full.
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Raser Technologies Inc. NYSE: RZ $5.14
Research Note
Industry: Industrial & Manufacturing
Rating: Not Rated (Reiterated)
Price Target: N/A
By: Gerald A. Rothstein, CFA
Raser: Delays 10-K Until End of March
March 19, 2007. Raser Technologies (NYSE: RZ) announced on Friday that its 2006 10-K and earnings release will be delayed until the end of March. We believe that this is not a material event.
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Shumate Industries, Inc. OTCBB: SHMT $1.77
Research Note
Industry: Oil, Gas & Energy
Rating: Strong Speculative Buy (Reiterated)
Price Target: $3.00
By: Richard R. Wolfe, CFA
Shumate Shares Plunge, Then Recover after Warrant Exchange Offer
March 17, 2007. Shumate Industries (OTCBB: SHMT) shares have regained most of their value after plunging on Wednesday (3/14). On Thursday (3/15), the Company disclosed that it has made an exchange offer to holders of certain warrants for its common shares.
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Wave Systems Corp. Nasdaq: WAVX $2.76
Research Note
Industry: Computers, Technology & Internet
Rating: Strong Speculative Buy (Reiterated)
Price Target: $4.50
By: Robert Goldman
WAVE TDM Shipping With Seagate Notebook PC Hard Drive
March 13, 2007. Wave Systems Corp. (NASDAQGM: WAVX) announced today that its Embassy Security Center's Trusted Drive Manager (TDM) is featured in Seagate's (NYSE: STX) Momentus 5400 FDE.2 notebook PC hard drive that is shipping to ASI Computer Technologies. This represents the first meaningful shipment of Seagate's Momentus 5400 FDE drives incorporating Wave's Embassy Trust Drive Manager and may be the first step toward broader Seagate/Wave notebook PC hard drive and TDM deployment.
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XAAR Plc LSE: XAR $4.46
Research Note
Industry: Computers, Technology & Internet
Rating: Buy (Reiterated)
Price Target: $6.15
By: Rafael K. Kapelinski
Xaar: Reiterate Buy Rating; Market Update
March 26, 2007. We reiterate Buy rating on Xaar (LSE: XAR). As we have stated, we believe that the inkjet printing continues to move towards the mainstream, and we view Xaar as one of the primary benefactors of the ongoing shift. Although the Company's 2H 2006 results were not very impressive, we believe that 2007 should be a much better year.
Most importantly, the Company should see first revenues from Gen 2 and Gen 3 printing platforms. Although we are still early in the process, the market for electronics printing continues to gather pace. Also, a variety of companies are developing printing systems that are capable of printing on a variety of novel substrates. Most recently, EFI has made a strategic investment of $3.5 million in Kornit, which develops and sells high-end industrial digital inkjet printers and inks for the textile industry, primarily for the finished garment and apparel printing markets. With more than 100 customers, mostly in North America, Kornit offers digital inkjet printers that specialize in printing high-quality images on t-shirts and other finished garments, with print speeds up to 200 t-shirts per hour.
In our view, the announcement is important, as this is the first time a major imaging company has taken a direct interest in a smaller player developing a digital inkjet system for a more exotic specialty substrate. Similar announcements are bound to expand Xaar's market in the future.
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XAAR Plc LSE: XAR $4.46
Research Note
Industry: Computers, Technology & Internet
Rating: Buy (Reiterated)
Price Target: $6.15
By: Rafael K. Kapelinski
Xaar (LSE: XAR.L): 2006 Results Summary, Estimates Under Review
March 19, 2007.
Xaar's 2006 results were slightly below our estimates. Revenues came in at £ 19.9, down 10.7% over 1H 2006, when the Company experienced trading problems in China. Total annual 2006 revenue figure was £ 42.21 million, down 1.3% over 2005. Printhead sales decreased 10.8% over 1H 2006, which in our view is a negative, although the Company indicated that it had been able to resolve the issues in China. EPS 2006 was £0.076, significantly, below our expectations. However, in 2H 2006 the Company recorded an on-off charge of £0.3 transaction costs related to the recent Danaher approach. We reiterate our buy rating, although the final set of 2006 results did little to boost our confidence. However, we view inkjet digital printing as a very attractive long-term trend, and we believe that Xaar is uniquely positioned to benefit from it. The Company's return to the profitability levels from 2005 is the single most important question surrounding the share price today. After the debacle in China in 1H 2006, the COmpany seems well on track to show markedly better results in 1H 2007E. Our estimates are under review. We will publish a comprehensive update on the Company shortly.
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XAAR Plc LSE: XAR $4.46
Research Note
Industry: Computers, Technology & Internet
Rating: Buy (Reiterated)
Price Target: $6.15
By: Rafael K. Kapelinski
Xaar: To Report 2H 2006 on March 15. Results Preview
March 13, 2007. Xaar (LSE: XAR) will report a full set of 2H 2006 results on March 15. We forecast 2H 2006 revenues of £22.8 million (+2.2% over 1H 2006) and EPS of £0.053. All in all, we anticipate the tone of the call to be positive as the Company has gotten the Chinese situation under control.
Most recently, Kodak's unveiling of its digital inkjet strategy only demonstrated the impetus of the ongoing digital inkjet paradigm shift. We maintain our stance that the Company represents a very attractive takeover target: it holds an impressive patent portfolio and industry recognition. In our recent update, we have looked at some of the more recent OEM developments and analyze their potential implications for Xaar. Since then our stance has not changed: we reiterate our Buy rating.
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Information, opinions or recommendations contained in this research report or research note are submitted solely for advisory and information purposes. The information used and statements of fact made have been obtained from sources considered reliable but we neither guarantee nor represent the completeness or accuracy. Such information and the opinions expressed are subject to change without notice. This research report or note is not intended as an offering or a solicitation of an offer to buy or sell the securities mentioned or discussed. Neither the Firm, its principals, nor the assigned analysts own or trade shares of any company covered. The Firm does not accept any equity compensation. Anyone may enroll a company for research coverage, which currently costs US $39,500 prepaid for one-year. Reports are performed on behalf of the public, and are not a service to any company. The analysts are responsible only to the public, and are paid in advance to eliminate pecuniary interests and insure independence. Please read full disclosure and other reports and notes on the Company at www.DuttonAssociates.com.
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