View as an RSS Feed
View Edward Vranic, CFA's Articles BY TICKER:
Investors Are Underestimating Perion
- Changes to Google Chrome have unfavorably impacted Perion in 2014 as its stock price has declined by nearly two-thirds.
- Perion has made all the moves necessary to compete in this changing industry including stockpiling cash and aggressively cutting costs.
- Perion's P/E and EV/EBITDA are well below industry averages so investors who believe that the company can navigate through these tough times will be buying a very cheap stock.
Taser Wins A Contract, So Why Would Digital Ally Spike?
- TASR announced a five-year deal with the LAPD for wearable cameras, which caused both it and DGLY to spike in price.
- Government red tape won't stop the trend toward body cameras for officers as TASR has shown it can save police departments money in the long run.
- There is misleading and false information about DGLY's wearable cameras being inferior to TASR's.
- DGLY's equipment and product specs are superior when comparing each feature.
- TASR's equipment is less expensive, but DGLY doesn't require police forces to sign a contract for its evidence management service so, overall, DGLY's solution is less costly.
Fonar Is An Unusual And Undervalued Play On The Obesity Epidemic
- Fonar's upright MRI is designed to handle overweight individuals in a more comfortable setting than a traditional MRI scanner.
- FONR trades at a 50% discount compared to larger medical device manufacturers.
- Fonar is too small to effectively market its differentiated and often superior MRI scanners. It's a prime buyout target for one of the larger players in the industry.
- The CEO has nearly 100% control over the company and may have his own agenda that doesn't align with the desires of minority shareholders to maximize the company's value.
- The mediocre performance of Fonar's service centers and poor collection rates for Q1 may be hurting investor confidence and causing the low stock price.
Concurrent Computer Corporation Appears To Be A Value Trap
- Concurrent Computer Corporation has a high dividend, low P/E and reasonable revenue growth.
- Revenue growth seen in 2014 is unlikely to continue as cable companies cut capital costs and government defense spending is inconsistent.
- The dividend appears unsustainable as the payout ratio is nearly 100% and will eat into cash reserves going forward if kept.
- Most of the earnings in 2014 are due to a release of a tax valuation allowance.
The Federal Government's Spending Announcement On Wearable Cameras For Police Sends Security Companies Soaring
- The U.S. Federal Government announced a $75 million program over the next three years for wearable cameras for police officers.
- The recent Ferguson shooting sparked this spending, but I assume that there will be much more government spending on this initiative in the United States and worldwide.
- TASR, DGLY and ISNS already have moved up a lot since the event in mid-August, can the higher spending justify further price increases?
CNinsure Has More Cash Than Its Market Cap And Double-Digit Revenue Growth
- A failed takeover bid and concern over inflated profit numbers caused CNinsure's market cap to drop below its working capital in 2011.
- Three years later CNinsure has settled a lawsuit regarding any alleged impropriety and no additional claims of fraud have been made against the company.
- When comparing CNinsure's valuation metrics to China Life Insurance Company Limited, it shows the stock price is under-priced by at least 50%.
- The CEO has shown a willingness to use excess funds to increase shareholder value, though was vague on how that will be accomplished.
Global Brass And Copper Holdings Is A Cheap Play On The Housing Market
- BRSS is a producer of finished goods and inputs to many industries, housing included.
- Valuation metrics including P/E and EV/EBITDA show that it is up to twice as cheap as homebuilders and similar types of companies.
- Revenue has declined in 2014, but Q3 saw an increase in profits and flat revenue. Improvements in housing and automotive markets led to the turnaround.
- BRSS is highly leveraged, but debt is not due for five years. If investors expect long-term economic growth, BRSS is a bargain stock.
Alibaba Exploded: Should Other Chinese Stocks Follow?
- Since its IPO, Alibaba has gained $113 billion in market cap.
- Alibaba isn't overvalued compared to other internet stocks, but is overvalued compared to other Chinese stocks that stand to benefit from growing eCommerce activity.
- Either Alibaba drops to a level more comparable to other Chinese stocks or these other stocks rise as the fear of fraud is replaced with the prospect of high growth.
SinoCoking Is Very Undervalued If You Believe Its Claims
- SinoCoking claims it is producing and selling syngas at a clip of $83K in revenue per day.
- If it meets eventual project targets, the stock price upside is well over 1000%.
- The company's press releases appear "too good to be true" which raises questions of potentially fraudulent behavior.
- The company has stood by its statements over the past few months, up to reporting revenue, production figures and customers on Tuesday's news release.
- While company statements may not be fraudulent, they still may be overly optimistic. I am long with a small amount of shares and encourage investors to be cautiously bullish.
MetLife May Be One Answer For Investors Searching For Value In This Market
- While the market at large has been getting pricey, MetLife remains at the lower end of its historical P/E range.
- MetLife's dividend yield is higher than it has ever been and yearly dividend growth appears sustainable.
- Investment gains/losses bring volatility to the numbers, but core revenues have had steady growth.
- I expect MetLife to rise to $65 next year in a bullish market while outperforming the market in case it turns bearish.
AGCO Appears Cheap, But Can It Recover In 2015?
- AGCO appears to be a cheap stock in a defensive agricultural industry that should see steady long-term growth as the world's population rises.
- The company has had a difficult 2014 as have its competitors, but Q3 was particularly harsh on revenue and gross margin.
- The balance sheet is not over-leveraged and AGCO should be able to navigate through this period of weakness before the next growth stage.
- Investors have an opportunity to "buy low" now, but a good chance to "buy even lower" in 2015 before recovery in the longer-term.
WWE's Narrow-Minded Focus Is Alienating Fans And Investors
- WWE is pushing the WWE Network in an effort to follow a business model similar to Netflix.
- This business decision is cannibalizing higher margin revenues, driving the company from a profit to a loss even as it downsizes and cuts costs to produce its content.
- WWE Network is having problems gaining traction as it doesn't have enough content to keep users engaged.
- Further declines in profits should be expected as WWE offers cheap/free price plans to stimulate growth.
- Jim Cornette, a veteran of the wrestling business, believes that pro wrestling is dying. Ominous words for a company that achieves all of its revenues from wrestling.
CarMax Makes An Excellent Long-Term Short If The Economy Eventually Heads South
- CarMax is a highly-levered business which carries most of its assets in auto inventory and loan receivables.
- The company is valued more aggressively than industry peers.
- To maintain revenue growth, it will continue to have to extend credit and perpetually increase its loan receivable and payable balances.
- At some point in time the economy will head into recession and Carmax will be at risk of not collecting on portions of its loans.
Sherwin Williams Is A Strong Company With A Bubbly Valuation
- Sherwin Williams has a history of annual increases to its dividend that can be matched by few other companies.
- The market has "over-rewarded" SHW for its consistent earnings and dividend growth as it sits at the top end of plausible valuations for a paint company.
- Despite constant increases to the dividend, yield sits at the low for this century as the stock price has gone on too much of a tear.
- Cash and working capital have eroded substantially for 2014 so SHW may not have the cash reserves required to fulfill the share buy back program and substantially increase the dividend.
What's Inside Facebook's Oculus Rift? Investment Opportunity
- Facebook has a vision for virtual reality, and will likely be aggressive in throwing development and investment dollars into the industry.
- The VR market is estimated to become a $7 billion industry by 2018 with Facebook set up to be a dominant player for the hardware and content.
- I agree with Mark Zuckerberg's view of VR's future marketability, but the critics of the early-stage technology are correct. New components will be built with corresponding investment needed.
- Facebook's Oculus Rift is due to be released to the broad consumer market some time in 2015 alongside other VR devices within the next year.
- Sophic Capital has identified several companies that build components of the Rift which will benefit from the consumer release and as new generations of the product are developed.
Lakeland Industries And Sharps Compliance Announce Spikes In Revenue From Ebola Threat
- The Ebola threat has caused a significant increase in the business activities of Lakeland Industries and Sharps Compliance, as confirmed by company statements yesterday.
- Lakeland Industries states that it has procured a total of one million protective suit orders so far, with accompanying equipment.
- Sharps Compliance announced an increase in sales of its biohazard sales kit and very busy flu shot season for October during its quarterly conference call.
Owens Corning Hasn't Collapsed Yet, But The Warning Signs Are There
- Owens Corning reports a "beat" on adjusted EPS, but that figure adjusts for negative one-time items and not positive one-time items. Actual EPS misses expectations.
- Despite the supposed beat in earnings for Q3, management reduces guidance on full year outlook EBIT by $15 million, leaving questions as to the impact going into 2015.
- The company has minimal cash balances to sustain the quarterly dividend or continue with the share buy back program.
- Large increases to the receivables balance puts into doubt whether the company can collect on the money it is owed.
Is Owens Corning Headed For A Collapse?
- Q3 earnings are out due out on the morning of October 22.
- Owens Corning has had a recent trend of disappointing earnings.
- The company has the potentially catastrophic combination of a leveraged balance sheet, thinning margins and stagnant revenues in a construction industry that's highly susceptible to macroeconomic variables.
- Put option activity on the stock shows that investors and traders are expecting a price decline in the near-term.
Sharps Compliance Could Be The Next Big Gainer Due To Ebola Hysteria
- Lakeland Industries and Alpha Pro Tech have gone on huge runs thanks to the Ebola scare.
- In addition to the wearing of hazmat suits and protective masks, the safe disposal of medical waste from Ebola will be a must.
- Sharps Compliance is another Ebola fear play due to its role in removing medical and hazardous waste.
- SMED may be the best play on Ebola fears right now as it is less overbought compared to LAKE and APT and has the strongest revenue growth.
Capitalizing On Chinese E-Commerce: Alibaba's IPO Should Spark Activity On Undervalued Chinese Stocks
- Alibaba's IPO shows that there is an appetite for Chinese stocks once again.
- The eCommerce industry is strong and several supporting industries have been overlooked, providing a chance for investors to discover undervalued gems.
- Companies in logistics, transportation and other related fields have great growth potential and trade at very cheap multiples.
- Alibaba is trying to build its own logistics network and may look to purchase smaller players to build this network quickly.
- Investors need to decide if they want to pay top dollar for Alibaba, or want to buy logistics companies at low prices which will also have strong growth.
Lakeland Industries May Be The Next Big Winner In The War Against Ebola
- Lakeland Industries is a maker of hazmat suits, good for the protection against Ebola.
- The U.S. State Department put out a bid for 160,000 hazmat suits, coinciding with the first reported case of Ebola in the U.S.
- With a small share float, LAKE could have a similar speculative run as TKMR as investors look to gain on the war against Ebola.
Rogers Will Have A Difficult Time Attaining Wireless Operating Profit Growth
- Analyst targets for Rogers are based on growth in revenue and operating profits in 2015.
- Any growth Rogers has seen in Wireless in the first half of 2014 is due to lower gross additions.
- Rogers will have a very tough time increasing profits in 2015 thanks to the CRTC Wireless Code of Conduct.
- Because of its larger subscriber base and higher churn, it will be at a disadvantage versus other carriers in dealing with the fallout from two-year contracts.
- Once Rogers provides guidance for 2015, I believe analysts will reduce their EBITDA expectations and possibly their price targets on the company.
How To Create A Per Unit Model For Canadian Wireless Telecom Companies
- A per unit model can be used to judge the profitability of telecom companies of differing sizes.
- Upfront costs like COA are amortized over the life of the client to give a fairer view of profitability for each quarter.
- A per unit model can be easily created by using some of the publicly disclosed key performance indicators released on each company's quarterly report.
GoPro Is Priced For Perfection
- GoPro appears to be a good company at a bad price.
- Bullish investors are expecting the world of the company, and will very likely be disappointed as their expectations are not based on reality.
- The business is in declining efficiency. 25,000 sales locations were used to support 3.85 million units sold in 2013 - 1 sale every 2.4 days per store.
- The social media video sharing aspect to GoPro is an interesting one, but far too early to consider it a viable revenue stream.
How To Estimate Rogers' Cost Of Acquisition For Wireless
- A company's COA rate is a key metric to consider when analyzing the profitability of its wireless business.
- Unlike its competitors, Rogers does not disclose its COA rate.
- Rogers COA can be calculated up to 2010 and reasonably estimated thereafter.
Coca-Cola's Deal With Monster Implies A Valuation Of Up To $160 Per Share For Monster
- Coca-Cola is buying a 16.7% stake in Monster Beverage Corp. for $2.15 billion.
- Coca-Cola is giving its energy drinks business to Monster, a division with over $1 billion in estimated annual sales.
- Monster is giving its non-energy drinks business to Coca-Cola, a division with less than $200 million in annual sales.
If There Is Such A Thing As A Free Lunch In The Markets, Stans Energy's Favorable Settlement Comes Close
- Stans Energy was awarded $118M in a settlement by the Arbitration Court at the Moscow Chamber of Commerce and Industry.
- The market cap sits at just a fraction of the settlement amount, so the market doesn't think the company can collect, but presents significant upside potential for investors.
- The Government of Ontario backs the legal claim so Stans should be able to collect on liquid assets worth the $118M.
- Stans's situation leads to it becoming a buyout target.
- Management needs to act quickly if the company doesn't want to be a target of a hostile takeover and wants its choice of assets as compensation.
- Pacific Ethanol Is Poised To Make Big Profits In Q1 2014 As Corn Prices Continue To Decline And Ethanol Prices Spike
- The Canadian Small Cap Equity Markets Are In Crisis
- Cytori Therapeutics Is A Cell Therapy Company With Several Positive Catalysts For 2014
- Chelsea Therapeutics May Be A Revenue Generating Biotech By The End Of 2014
- Alibaba's Looming IPO Shows That Smaller Players In The Chinese E-Commerce Industry Are Significantly Undervalued