StoneRidge Investment Partners primarily serves the Pension & Profit sharing plans and Investment companies. The company adds value to the large capitalization, core equity and small capitalization growth equity management by blending qualitative decisions, quantitative tools and fundamental research. Further, its proprietary quantitative modeling process adds value to equity management. As on Dec. 31, 2012 the firm had $322.57 million in assets under management. The company's recent fourth quarter 13f Filing ending December, revealed new positions in 48 stocks. And, among these I have picked up three stocks which posted better than expected earnings in the last quarter. StoneRidge held 72318 shares in Ross Stores Inc. (ROST) representing 1.15% of the total portfolio, 50069 shares in Celgene Corporation (CELG) representing 1.15% of the total portfolio and 136908 shares in CA Technologies (CA) with 0.88% of the portfolio. Let's analyze these stocks in detail:
Ross Stores Inc.: Ross Stores's comparable store sales in December increased 6% (9% last year) beating the company's estimate of 2% to 3% while the consensus had projected an increase of 3% only. The company's shares rose by almost 6% after the announcement of its comps figures. While the comps for the last 11 months increased by 7%, which was 5% last year, total revenue rose by 11% to $1276 million as compared to $1149 million last year over the five weeks ended 29 December. Ross Stores was successful in attracting the price conscious consumers as it remained committed towards its off price model and offered an exciting collection in its brand name Fashion for Family and Home. I think this increase in comps is a sign that the customers are seeking to purchase the brands at everyday value price despite the promos at the department stores. Currently Ross operates around 1,100 Ross Dress for Less stores across the country and has reported increased profits in recent quarters. And I believe that Ross Stores shall be able to attract the bargain-hunting customers in the near future too. The company's shift towards value will continue in Fiscal 2014 also, which shall give it above-average sales and earnings. If the company's sales trend over the past year is sustained then it has a huge room to grow as Ross plans its business conservatively, which is at low single digit comps. And, its flexible business model gives me further confidence that the company will be able to attract more new customers.
Celgene Corporation: Celgene posted strong 4Q12 results where revenue increased 13% to $1.45 billion with its strength in the core blood cancer drug franchise that includes the blockbuster drug Revlimid treatment. The net product sales increased 14% to $1416 million from last year and net income increased 21% to $572 million as compared to $473 million a year ago. Further, the company has announced that its oncology drug Abraxane showed better performance in its phase III study. Abraxane's benefits were consistent across all the key subgroups including the performance status, patient with liver metastasis and patients with greater than three sites of metastasis. This study was conducted in combination with Eli Lilly's Gemzar as a first line therapy to patients suffering from pancreatic cancer. The study revealed that the patients treated with Abraxane and Gemzar showed an improved performance as compared to those with Gemzar alone. With this encouraging data from the MPACT study, Celgene is looking forward to getting an approval of Abraxane in the first half of 2013 in the U.S. and EU while approvals in the other markets are expected in the second half of 2013. Abraxane is a part of Celgene's strategy to achieve its target of $12 billion in product sales by 2017. I remain confident that the company will achieve this target as Celgene has one of the most robust growth and earnings profiles.
CA Technologies: Shares of CA Technologies rose 3% as the company posted better-than-expected third-quarter 2013 results. It reported an EPS of $0.63 beating Walls Street's expectation of $0.62 and revenue of $1.195 billion beating the expectation of $1.17 billion. Although bookings were down 2% but still were better than the expectation of 5% decline mainly due to the early contract renewals. CA Technologies has set its goals for its future growth and is now focusing more on Nimsoft, which makes IT management and monitoring software appealing to the mid market and larger MSPs. Nimsoft, which was acquired by the company in 2010 has shown impressive growth since the acquisition and has expanded the MPS installed base by ~72%. Further, the company is ramping up its innovations in order to differentiate itself from the others in its solutions offerings and also to capture the market. CA Technologies is set to expand its presence in the Gulf region and for this the company has started its operations in the Middle East and North Africa region in partnership with the Midis Group. It has noticed the demand for its solutions in the region and particularly in security, service desk, projects and service level management thus, creating a significant growth opportunity for the company. As per the analysts the company in the fiscal 2013 is expected to post EPS of $2.41 and revenue of $4.62 billion.
The Investing Opportunity:
I am confident about Ross stores and Celgene to be considered for a long-term investment. For Ross Stores, I believe that the company will be doing well in the next quarter without making any extra promotional activities and shall post 1% to 2% increase in its comps in January. Celgene has solid room to grow and Abraxane is giving it more confidence to generate $6 billion of net product sales in 2013. On the other hand investors should wait and watch for CA technologies till its long-term strategies start paying off, which should be probably in 2H13.