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Davis Shields

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  • Announced Contract Wins Will Double SuperCom Share Price [View article]
    The earnings report is actually very revealing if you dive into the Q&A section. I was playing with the some numbers from the report to try to understand what annual earnings may look like prior to the recent contract award announcement.

    CEO, Arie Trabelsi states contract value typically translates to 20-30% recurring revenue for 5 to 20 years. President of US OPS, Ordan Trabelsi describes REC revenue to be higher margin due to front end NRE costs associated with hardware retrofit and implementation of new projects. He explains the revenue mix as 68% recurring. 95% of which is related to EID, the primary product line.

    I attempted to apply this information to recreate Q1 earnings, while assuming M2M is noise at this time. The results were estimated margins of 39% for Recurring revenue and 20% for NRE; or a combined 32.9% on 5.1M in total revenue resulting in 1.68M Net Income.

    What does this all mean? I think the ~50M in new contracts means an increase in non-recurring revenue in the near term which may drive margin contraction. This will transition to a larger Recurring base which returns higher margins in 2015 and beyond.

    Earnings are growing exponentially but the mix is changing due to the sheer size of the contract awards and front end cost to implement the projects. Margins may shrink in the near term but this company is growing fast and is making significant cash while doing it. A large recurring revenue base limits the downside risk while continued success leveraging the proposal pipeline will allow Supercom to accelerate its forward momentum.
    Aug 9 09:47 AM | 1 Like Like |Link to Comment
  • The Wet Seal Inc.: Analysts Have Recently Upgraded The Stock To Reflect Successful Execution Of Turnaround Plans [View article]
    Wet Seal CEO John Goodman was previously EVP & Chief of Apparel at Sears. Prior to this he was the CEO of Charlotte Russe. At CR he lead a company turnaround which resulted in the eventual sale to Private Equity firm Advent International for $380M(~4.9 times the current market cap of WTSL). At the time CR had about 500 stores, had a couple solid quarters on the heels of a turnaround and was establishing a strong web presence. CR had demonstrated improvement but conditions, metrics and financials were not rosy. These details sound eerily familiar to Wet Seal.

    It's interesting that following Goodman's exit of Sears, Lands End has successfully gone IPO. People have failed to mention this interesting fact. While he wasn't in the driver's seat, these things take time and I'm sure the posturing to get Lands End to IPO started a long time before its sale. Now he is at Wet Seal and the company is showing progress in key areas such as web presence and in reducing its cost structure by eliminating non-core product line, Arden B. The alignment of Wet Seal and Wet Seal Plus stores will drive cost efficiencies. It seems to me a turnaround is in progress. The company trades at a valuation worthy of a Chinese ADR and has a cash position near its own market capitalization. Retail market data has been positive suggesting market conditions are improving. Because of this, I believe the stock offers an asymmetric risk, reward profile. I am long and expect big things in the quarters to come.
    Jul 20 09:26 AM | 4 Likes Like |Link to Comment
  • With All That Cash, Who Will Apple Buy Next? [View article]
    Square or On Track Innovations $OTIV

    Strengthen its' position in the mobile wallet, mobile payment, NFC payment arena. Leverage that massive list of iTunes accounts....
    Apr 25 01:49 PM | Likes Like |Link to Comment
  • Apple beats estimates on strong iPhone sales [View news story]
    Apr 23 09:22 PM | Likes Like |Link to Comment
  • Seeking Alpha Crowd Wisdom Predicts Future Stock Returns [View article]
    Thank you, Eli

    I started as a reader of articles and found myself immersed in the dialogs between users within the comment section. SA allows for collaborative or combative research and learning.

    I find SA is a fantastic resource for gathering varying perspectives. This open forum nurtures organic idea generation and openly welcomes debate.
    Mar 19 09:44 PM | 8 Likes Like |Link to Comment
  • Advanced Micro Devices: Wall St. Consensus Projections Unrealistically Negative [View article]
    Thanks for the article IVAM. I was and remain long. As you and others have put it, this downward spiral has presented another buying opportunity. I have since doubled my positions. 8k shares with a limited budget. I am on board and just waiting for the bounce back. To quote a childhood favorite movie,

    ''And just when you think they're about to break apart- Ducks fly together! And when the wind blows hard and the sky is black - Ducks fly together! When the roosters are crowing and the cows are spinning circles in the pasture. Um. Okay. - Ducks fly together!''

    Good Luck Ducks! I mean AMD longs!
    Oct 22 09:45 PM | 2 Likes Like |Link to Comment
  • Advanced Micro Devices: A Look At Q3 Earnings [View article]
    This was a great news earning report. Rory and the management team are delivering upon their commitments and exceeding analyst expectations. This was the fundamental truth revealed in the call. I see this as doing nothing but reaffirming the turn-around story. As many have pointed out, the sell-off, and analyst downgrades often follow AMD earnings reports. Don't be fooled by the comotion. If you were long before, this should make you smile. If you doubted their ability to turn a profit, maybe a second look is in order. I also added to my shares at these prices. It seems only a matter of time before the bad news bears lack things to point at as a negative. The turn around plan is working and AMD is well positioned for a return as the leader of visual computing.

    Thanks Justin for your continued quality coverage.
    Oct 18 05:36 PM | 1 Like Like |Link to Comment
  • 'Mantle' Is The Most Interesting Announcement At Advanced Micro Devices' GPU14 Event [View article]
    Very interesting, Justin.

    Most of this stuff is still Spanish to me but reading your articles helps me understand. The credit you get from all you readers is very well deserved. I'm learning. Muy Bueno!
    Sep 27 09:55 PM | 2 Likes Like |Link to Comment
  • 'Mantle' Is The Most Interesting Announcement At Advanced Micro Devices' GPU14 Event [View article]
    Glad to see that while I'm attending class for my Master's that I can count on you to deliver quality insight on my favorite investment!
    Thanks, Justin!
    Sep 25 11:51 PM | 2 Likes Like |Link to Comment
  • Smith & Wesson: $84.3M For Stock Repurchase May Mean 13% To 53% Upside [View article]
    We cannot assert definitively that the guidance was provided with the intent to impact the stock price downward. They had to disclose production downtime and rightfully pointed to this as the reason for lower guidance. Regardless, this is a positive for investors. The company you own, is purchasing shares at a discount, which ultimately benefits the shareholder(not the seller). SWHC has a strong history of volatility post earnings. Shares will settle. Hopefully the company can take advantage of the buying opportunity presented in the short-term.
    Sep 8 10:41 PM | 1 Like Like |Link to Comment
  • LRAD Corporation - Cash-Rich With A New Shareholder-Focused Board Of Directors [View article]
    The 12.2M deal is IDIQ; Indefinite Delivery, Indefinite Quantity. This is essentially a price list which can be purchased from by the US Navy for 5 years. The first order has been placed and is worth 1.9M.

    While very good news for a company this size, it should be noted that the full 12.2M will not likely be spent in year one and may never be spent. The customer is free to purchase or not purchase. This is why the press release says 'Up to 12.2'. The benefit of this type of contract is added expediency in the government contracting process, which can often be lengthy and arduous.
    Sep 7 09:21 AM | Likes Like |Link to Comment
  • Why Are Hedge Fund Traders Flocking To AMD? [View article]
    You know, like nunchuck skills, bowhunting skills, computer hacking skills... Girls only want boyfriends who have great skills.
    Sep 7 08:47 AM | 2 Likes Like |Link to Comment
  • Why Are Hedge Fund Traders Flocking To AMD? [View article]
    If the price target is really $85 then that's a picture of a real, live, Liger!!! ;)
    Sep 6 11:40 AM | Likes Like |Link to Comment
  • Nokia: Come On Mr. Icahn, Come To Our Rescue! [View article]
    Still 4k strong!
    To Infinity and Beyond!
    Ok, I'll take $7....
    Sep 3 04:41 PM | 5 Likes Like |Link to Comment
  • Nokia's NSN Acquisition Might Be Its Downfall [View article]
    Short sighted.
    Value and cash flow from NSN.
    Aug 27 09:00 PM | 1 Like Like |Link to Comment