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  • V.F. Corp.: Implications Of A Potential Puma Acquisition
    Fri, Nov. 28 VFC 4 Comments

    Summary

    • VFC is reportedly considering the acquisition of Puma.
    • In this article, we assess the potential impact on VFC’s financials.
    • A Puma acquisition would offer an attractive risk/reward.
  • Autodesk: Upside Remains Significant In Q4 And FY16
    Thu, Nov. 27 ADSK Comment!

    Summary

    • Autodesk delivered again ahead of expectations in Q3.
    • The upside remains significant in Q4 as the high-end of the billings guide implies only 10% growth vs. 25% in Q3.
    • The group's open-source strategy in 3D printing makes sense.
  • AeroVironment: Short Term Tricky, Still Focusing On The Long-Term Picture
    Wed, Nov. 26 AVAV Comment!

    Summary

    • Q2 figures were slightly below expectations.
    • A recent Wall Street Journal article suggests the new FAA rules on drones will be highly restrictive.
    • It’s important in our view to focus on the long-term picture.
  • Veeco: Getting Ready For The Earnings Leverage
    Wed, Nov. 26 VECO Comment!

    Summary

    • Veeco’s recent Q3 earnings were encouraging.
    • Importantly, the company is seeing good initial traction for its new MOCVD tool, EPIK.
    • The earnings leverage will be significant when Veeco starts recognizing orders and revenues for its new tool.
  • Finally A Positive! 3D Systems Makes A Bold Move In Design Software
    Mon, Nov. 24 DDD 8 Comments

    Summary

    • 3D Systems acquires design software vendor Cimatron.
    • The transaction makes strategic sense and is financially attractive.
    • But it’s clearly too early to call the Cimatron acquisition a success as Autodesk is a major threat.
  • Zebra: Motorola Still Overshadows Core Business Strength
    Thu, Nov. 20 ZBRA Comment!

    Summary

    • Core business has been impressive lately, with organic growth accelerating to 13% in Q3.
    • But investors continue to focus on the Motorola unit's poor performances and integration challenges.
    • Should Zebra succeed in reviving the Motorola business, the value creation potential would be huge.
  • Update: Agilent Earnings - Likely Upside On FY15 Guidance
    Wed, Nov. 19 A Comment!

    Summary

    • Agilent delivered in-line Q4 figures and FY15 guidance.
    • Several positive developments give confidence in Agilent’s ability to reach and potentially exceed its guidance.
    • The only negative in this quarterly release was management’s comment that large M&A was not a priority in FY15.
    • We expected Agilent to be active on the M&A front as soon as FY15 against a backdrop of rising industry consolidation.
  • 3D Systems: Goodbye $26...
    Tue, Nov. 18 DDD 65 Comments

    Summary

    • Back in February, we valued 3D Systems at $26 in a bear-case valuation.
    • Since then, expectations for the 3-D printing leader have come down.
    • It’s now time to update our valuation model.
  • Agilent 2.0: Phase 2 Of Corporate Action?
    Thu, Nov. 13 A 2 Comments

    Summary

    • The new Agilent offers a more defensive, less volatile profile.
    • The margin outlook is healthy but already priced in.
    • Additional corporate action (after the recent KeySight spin-off) will be key for the investment thesis.
    • We expect Agilent to take part in the M&A game with an estimated $2-3bn takeover capacity or to turn into a target for the likes of Thermo Fisher and Danaher.
  • 3D Systems: Why 30% Organic Growth Is A Thing Of The Past
    Mon, Nov. 10 DDD 7 Comments

    Summary

    • Q4 is expected to run smoothly but will deliver only 31% revenue growth at guidance midpoint, or 15-20% organic growth according to our calculations.
    • Without saying a word, 3D Systems is gradually reducing its organic growth expectations that were closer to 30% earlier this year.
    • HP’s entry into the industry will be an additional headwind in 2015-16.
    • Consensus expects 3D Systems to deliver 42% EPS growth in 2015. In view of softening revenue growth and continued margin pressure, the downside risk remains significant.
  • Cameco: Japan Finally Announces The Restart Of 2 Nuclear Reactors
    Fri, Nov. 7 CCJ 8 Comments

    Summary

    • Japanese regional authorities approve the restart of the two-reactor Sendai nuclear plant.
    • Many of the other c.50 idle reactors could be back online pretty soon (probably by 2016/17).
    • Investors could now assume that Japan is likely to start replenishing its uranium stockpile by 2016.
    • As the lowest cost major producer, Cameco will be in a comfortable position when uranium demand picks up and pricing improves, with a likely huge earnings leverage.
  • Update: Symantec Earnings - Strong Financial Discipline Will Sustain Earnings Growth And Attract Private Equity Interest
    Fri, Nov. 7 SYMC Comment!

    Summary

    • As usual, Symantec’s Q2 headline numbers did not impress.
    • But on a FX adjusted basis, the top-line momentum was not that bad.
    • And margin strength was a key highlight.
  • 3-D Printing: Could 2015 Be Worse Than 2014?
    Thu, Nov. 6 HPQ, DDD, SSYS 6 Comments

    Summary

    • HP will start shipping its 3D printer in early 2016, but industry leaders could feel the effects as soon as 2015.
    • 3D Systems and Stratasys could suffer an organic revenue growth slowdown as customers delay 3D printer purchasing decisions ahead of commercial release of HP’s products.
    • 2015 consensus expectations are way too high.
  • Electronic Arts: The Bull Case Still Offers More Than 30% EPS Upside
    Thu, Nov. 6 EA Comment!

    Summary

    • We expect price cuts to boost console shipments and game software sales in Q4 and 2015.
    • Current revenue growth expectations for 2015 (+6%) are way too conservative.
    • The margin recovery opportunity is still significant.
  • Alcatel-Lucent: All Eyes On The November 11 Investor Day
    Thu, Nov. 6 ALU 13 Comments

    Summary

    • Alcatel-Lucent could provide more granularity on its FY15 outlook at its November 11 investor day.
    • We expect the company to reassure investors about its EUR7bn Core Networking revenue target as its recent efforts on cable, Internet players and large enterprises are starting to pay off.
    • The risk is on the upside as most investors are skeptical about Alcatel-Lucent’s ability to reach its guidance.
  • Update: Tesla Earnings - The Positives Outweigh The Negatives
    Thu, Nov. 6 TSLA 111 Comments

    Summary

    • Tesla cuts its Q4 deliveries target and slightly delays the Model X introduction.
    • But reassures on its revenue growth and profitability outlook, while dismissing concerns about a near-term capital raising.
    • The positives outweigh the negatives and we reiterate our $305 base case valuation.
  • Alcatel-Lucent: Mr. Combes, The Moment Of Truth Has Come
    Mon, Oct. 27 ALU 57 Comments

    Summary

    • Mr. Combes has now to deliver on his promises.
    • Another miss in IP networking and the sanction would be brutal for the stock.
    • That said, expectations have been reset and are rather low now. The most important metric to watch is cash flow.
    • We will also pay attention to the patent monetization outcome.
  • Update: Nokia Earnings - Impressive Q3 Beat, Telecom Equipment Is Not A Dead Business
    Thu, Oct. 23 NOK 30 Comments

    Summary

    • Q3 revenue and EBIT exceed consensus by 9% and 28% respectively.
    • The Networks division stands out, confirming our view that recent executive comments were encouraging.
    • Nokia Networks is gaining share in most parts of the world. This bodes well for 2015.
  • 3D Systems: Poor Execution, Poor Financial Communication, The Perfect Cocktail For A Continued Derating
    Thu, Oct. 23 DDD 21 Comments

    Summary

    • As we expected, 3D Systems cut its FY guidance.
    • We are not convinced by management’s explanations.
    • Poor execution and financial communication (three warnings year-to-date) are likely to raise concerns about top management's grip on the business.
    • We reiterate our negative stance.
  • It's Still Time To Sell Verizon
    Wed, Oct. 22 VZ 27 Comments

    Summary

    • Most Q3 wireless metrics were disappointing as Verizon started to react to Sprint’s aggressive pricing initiatives.
    • Pressure is mounting on Verizon in the seasonally-strong Q4 as Sprint rolls out a compelling iPhone 6 leasing plan.
    • We remain convinced that Verizon will have to implement 5% to 10% price cuts in the next 12-24 months, with a -4% to -8% impact on EBITDA.
  • Update: VFC - Unchanged Confidence Heading Into Q4
    Wed, Oct. 22 VFC Comment!

    Summary

    • VFC raised its FY EPS guidance for the second time this year.
    • Timberland and Europe have been powerful drivers lately, in line with our thesis. But Europe could be a source of concern going forward due to recent macro weakness.
    • VFC should overcome any European weakness in Q4 as it will benefit from major product introductions and expansion plans at both Timberland and The North Face.
  • Update: eBay Earnings - Worrying Metrics In Q3
    Thu, Oct. 16 EBAY 1 Comment

    Summary

    • Marketplaces revenue growth continued to decelerate in Q3.
    • And PayPal’s take rates fell 7% year-on-year.
    • This report confirms our view that PayPal’s take rates and margins are not sustainable.
    • We would continue to avoid the stock but would refrain from recommending a Short position due to eBay’s speculative appeal.
  • JDS Uniphase: M&A Speculation Heating Up In The Test & Measurement Industry
    Wed, Oct. 15 JDSU Comment!

    Summary

    • A major competitor emerges in the Test & Measurement business as NetScout acquires a Danaher unit.
    • Pressure is likely to mount on JDSU’s management to enter into M&A discussions regarding its NSE unit.
    • The NetScout – Danaher deal was achieved at 3.1x 2013 sales, significantly above JDSU’s current multiple (1.5x).
  • Will Apple Kill Visa And MasterCard?
    Tue, Oct. 14 MA, V, AAPL 4 Comments

    Summary

    • Apple and credit card issuers are partners for the upcoming launch of Apple Pay.
    • But Apple is likely to try to bypass them in the future to fully take advantage of the mobile payment opportunity as it needs to find new growth drivers.
    • Importantly, the mobile payment business could open new opportunities and notably spark huge advertising revenues in the long run.
  • Global Equities - There's A Sense Of Panic In The Markets
    Mon, Oct. 13 DIA, SPY, QQQ 12 Comments

    Summary

    • The haunting of a new economic depression has resurfaced.
    • In Europe, all eyes are now on Germany.
    • The ECB is likely to act swiftly in December 2014.
    • Chinese action could also offer upside for equities.
  • 3D Systems: Short Interest Surprisingly Declines
    Mon, Oct. 13 DDD 4 Comments

    Summary

    • Short interest was down 6% in late September.
    • Since then, HP has announced its plan to become a major 3-D printing player.
    • And a tricky Q3 report is just ahead.
    • Short interest is likely to rise again. We reiterate our negative stance and $26 target price.
  • Symantec: Doing The Math On The Breakup
    Thu, Oct. 9 SYMC Comment!

    Summary

    • The storage unit could be valued around $5bn using the sales multiples of EMC and Brocade.
    • The implied valuation of the security unit ($9bn or 2.1x FY15 sales) offers significant rerating potential as most peers trade at much higher multiples, ranging from 4.0x to 8.5x.
    • M&A speculation and low valuation levels are likely to sustain Symantec's outperformance vs. other tech names.
  • Amazon: Is A Major Push Into The Apparel And Luxury Categories Just Around The Corner?
    Thu, Oct. 9 AMZN 10 Comments

    Summary

    • Speculation has resurfaced that Amazon could take over British fashion e-tailer Asos.
    • Amazon’s expansion into the high-margin apparel and luxury categories would make sense as the company needs to materially improve its profitability.
    • The acquisitions of Asos and Yoox would be a step in the right direction but would not have a major impact on Amazon’s key metrics in the short-term.
    • We reiterate our negative stance on the stock.
  • 3D Systems: The Takeover Thesis Could Resurface Following The HP Spin-Off Announcement
    Thu, Oct. 9 DDD 18 Comments

    Summary

    • The new HP outlined plans to expand into 3-D printing and will soon have much more flexibility to make acquisitions.
    • We believe that HP is more likely to focus on the acquisition of small 3-D players.
    • And stick to our view that M&A is not a likely exit opportunity for 3D Systems shareholders.
  • Autodesk: New Business Model On Track To Be A Success
    Wed, Oct. 8 ADSK Comment!

    Summary

    • Autodesk speeds up its business model transition as it announces plans to phase out perpetual licenses: 100% recurring revenues are in sight.
    • ARPU strength in the subscription model (+30% vs. license ARPU) gives confidence in the margin outlook.
    • The stock's restated P/E, slightly above 20x, is not overly demanding for a leading software company likely to play a key role in the 3-D printing revolution.
  • 3D Systems: The HP Threat Resurfaces
    Tue, Oct. 7 DDD 34 Comments

    Summary

    • The new HP Inc. plans to become a major 3-D printing player.
    • Rising competition suggests that 3D Systems’ ASP and margins will keep going down.
    • Consensus expectation of a strong operating margin recovery in 2015 (23% vs. 18% in 2014) is not realistic.
  • AeroVironment: The Newsflow Is Increasingly Supportive
    Fri, Oct. 3 AVAV 2 Comments

    Summary

    • AeroVironment’s core defense business continues to do well with $49m orders from the U.S. Defense lately.
    • AeroVironment could reach or even exceed the high end of its FY15 sales guidance ($250-270m).
    • The newsflow in the commercial market has been rich as well.
    • In year 1 after new FAA regulations, commercial drones could spark more than 10% upside on group revenues.