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  • Nvidia As A Takeover Target [View article]
    We're hesitant to dismiss the possibility of a takeover. NVIDIA's balance sheet is filled with cash, and that almost always adds to takeover appeal, especially for private equity. There are hundreds of billion of dollars that the industry needs to invest by the end of 2013 (http://bit.ly/Vxf4j9), or else it faces the risk of having those funds return to their investors. If at least one PE fund decides to do a deal, any deal in order to find somewhere to invest client funds, NVIDIA could be high on its list of potential targets.
    Dec 11 08:07 AM | 1 Like Like |Link to Comment
  • Buy NuPathe: When An FDA Rejection Creates An Opportunity [View article]
    Volatility is a fact of life when it comes to investing in the biotechnology sector, stocks often rise and fall on little or no news. And as the PDUFA date nears, its possible that volatility will only increase.
    Dec 6 03:46 PM | Likes Like |Link to Comment
  • Buy NuPathe: When An FDA Rejection Creates An Opportunity [View article]
    NuPathe has stated that it has redesigned the path to comply with what the FDA raised in the CRL, and it redesigned the drug release process as well.
    Nov 30 06:05 PM | Likes Like |Link to Comment
  • Buy NuPathe: When An FDA Rejection Creates An Opportunity [View article]
    When it comes to speculative biotechnology stocks (and even though it has promise, NuPathe is still a speculaitve stock at this point in time), it is better to be conservative. The market potential here is certainly large, and if everything goes the way it should, NuPathe could have a blockbuster drug on its hands. The company has addressed all the issues that the FDA raised in its original CRL, and we would say the odds of approval are fairly good, given the available data.
    Nov 30 01:28 AM | 1 Like Like |Link to Comment
  • The End Game At Hewlett-Packard: Analyzing The Company's Takeover Prospects [View article]
    It is not unheard of that a company with a smaller market capitalization can buy a larger company. Fujitsu could issue new stock, issue debt, and use existing cash to pay for an HP deal. Even though existing shareholders would be diluted in a stock offering, they would go from owning 100% of the current Fujitsu to owning some lower percentage of a much larger company. In addition, a spinoff of HP's PC business could help finance a portion of any deal.
    Nov 28 03:42 PM | Likes Like |Link to Comment
  • The End Game At Hewlett-Packard: Analyzing The Company's Takeover Prospects [View article]
    As a Japanese company, Fujitsu would benefit from a storng yen in this case, as it makes overseas deals more affordable. There could be synergies between Fujitsu & HP, but something would likely have to happen with HP's PC business. HP's debt figures were given in their Q4 2012 earnings presentation, which is linked to at the beginning of the article.
    Nov 28 03:40 PM | Likes Like |Link to Comment
  • Buy Attunity: An Under The Radar Investment In Big Data [View article]
    On the surface, the timing of the meeting may seem suspicious, but when you read the proxy statement that outlines the financial impacts of these items, they are not that meaningful in the long-term (http://1.usa.gov/TXTymt)

    Item 2: Item 2 proposed to increase the fee that non-employee, non-external directors receive for attending Attunity board meetings be increased from $300 to $430. Even if the fee increase were applied equally to all 6 of Attunity's directors, it would cost the company $780 more, hardly an exorbitant sum.
    Item 3: The board wants to boost Alon's bonus by 33%, salary, which results in a bonus of 8 months of salary, as opposed to the current 6 months. The bonus is to be paid only if he meets milestones set forth by the board. And given that Alon owns 13.5% of the company, we think that fact more than outweighs the additional $51,653 in bonus expenses. And Alon has shown flexibility in reducing his pay when asked by the board. In February 2009, his salary was cut by 10%, and in February 2011 his salary was cut by 4%.
    Item 4: Attunity needs the 2012 plan so that it can grant stock options to its US employees; the 2001 plan that the company has used up until this point can no longer be used due to changes the IRS has made to the tax code. The 2012 plan has also been "redesigned" so that Attunity can create customized sub-plans based on the tax laws of the country in question. For example, Attunity wants to create a plan just for Israel, to take advantage of specific tax incentives available to Israeli citizens.

    We don't think that there is anything untoward about these proposals. To us, they seem more like mundane housekeeping items than anything else. Furthermore, CEO Shimon Alon and his board together own almost a quarter of the company. They have significant "skin in the game," and these policies will affect them just like the rest of Attunity's shareholders.
    Nov 25 07:11 PM | Likes Like |Link to Comment
  • Buy Attunity: An Under The Radar Investment In Big Data [View article]
    Attunity has chosen to hold its shareholder meeting late, but it is still within the legally required range. There is no law that requires shareholder meetings to occur only after the current fiscal year has closed. The meeting will be reviewing the company's results for fiscal 2011, not fiscal 2012, and while the timing of the meeting is odd, there is nothing untoward about it. Most shareholder meetings generally are about relatively mundane items, such as approving compensation plans (a requirement for public companies), re-electing directors, and approving paying whoever audits the company's financials. They likely delayed the meeting as far back into the year as they could given the fact that it will be held in Israel, and most of Attunity's investors are likely in the United States, and need more time to figure out how to get to Israel.
    Nov 21 12:45 PM | Likes Like |Link to Comment
  • Hewlett-Packard: After The Autonomy Debacle, Is There Value Left In The Stock? [View article]
    Unless the company can turn things around in 2013, it is likely that the job will no longer belong to Whitman. Ralph Whitworth's agreement with HP that binds him from fighting the board expires in November 2013, and by then, other activists may enter the picture. HP is the poster child of the kind of company Carl Icahn goes after, and with a market cap of $23 billion, there is scope for activists to begin pressuring the company to either break itself apart or find a buyer. We think that Whitman has been dealt a very difficult hand, and that she is doing the best she can. Whitman has not stood still in her time as CEO, and has, at the very least, been frank that HP's full turnaround will take years. But, with 2013 being targeted as HP's first year of improvement, Whitman needs to deliver, or else she risks being thrown out of HP's corner office.
    Nov 20 11:51 PM | 1 Like Like |Link to Comment
  • Hewlett-Packard: After The Autonomy Debacle, Is There Value Left In The Stock? [View article]
    That is a difficult question to answer. We think that the downside here is limited, given how far the stock has fallen. If it falls much further, it is likely that someone (private equity or another technology company) will become interested. HP's market cap is no longer big enough to deter activists, and if the company doesn't show meaningful progress through fiscal 2013, it is likely that someone will try and stir things up. As for the upside, HP can easily be worth $15 if you put a 5x multiple on the company's 2013 non-GAAP guidance, which would still be by far the lowest multiple of any major technology company. HP's multiple has fallen far faster than its earnings, and if the company can merely show that things are stabilizing, then the multiple is likely to expand as investors regain confidence.
    Nov 20 10:17 PM | 2 Likes Like |Link to Comment
  • Hewlett-Packard: After The Autonomy Debacle, Is There Value Left In The Stock? [View article]
    So far, there aren't any indications that the dividend is threatened. Cash flow, while down in fiscal 2012 versus fiscal 2011, was down mostly due to working capital shifts, and HP's net debt is falling. A look at HP's last 10-Q (they haven't filed their 10-K yet) shows that the company's debt maturities are spread out fairly evenly over the next decade, and appear to be manageable as long as cash flow holds at present levels. http://1.usa.gov/SQ9Ez1
    Nov 20 10:12 PM | 1 Like Like |Link to Comment
  • Hewlett-Packard: After The Autonomy Debacle, Is There Value Left In The Stock? [View article]
    To her credit, Meg Whitman is revitalizing HP's R&D, and she is at least trying to bring back a focus on innovation. HP is moving into cloud computing, and Whitman is trying to balance the need for a leaner cost structure with the need for more R&D.
    Nov 20 10:08 PM | 2 Likes Like |Link to Comment
  • Hewlett-Packard: After The Autonomy Debacle, Is There Value Left In The Stock? [View article]
    The requirement to write down goodwill if the underlying businesses have become impaired is a GAAP requirement, and HP is simply following accounting requirements. That being said, their acquisition track record is quite poor. We think it is difficult to determine whether or not this would all be happening under Hurd. His tenure was marked by severe cost gutting across all of HP, which boosted profits, but at the expense of innovation. Could that strategy continue to work in a changing technological environement? Perhaps, but there is no way of knowing for sure.
    Nov 20 10:05 PM | 2 Likes Like |Link to Comment
  • Hewlett-Packard: After The Autonomy Debacle, Is There Value Left In The Stock? [View article]
    With Autonomy, Palm, and EDS written down, there isn't much left that HP can actually write down. 3Par is performing well, meaning that it is unlikely to be impaired, and while there is likely intangibles related to the Compaq deal, it is likely that they would have been written down by now if there was a requirement that they need to do it. In theory, further writedown are possible, but at this point in time, we think it is unlikely that HP will take more multi-billion writedowns.
    Nov 20 10:02 PM | 2 Likes Like |Link to Comment
  • Salesforce Q3 Earnings Preview: What Does The Company Need To Deliver To Keep The Stock Afloat? [View article]
    We talked about the issue of mutual funds in several previous articles on Salesforce, and how Fidelity embodies this issue perfectly. Fidelity has been a Salesforce investor since the company's earliest days as a publicly traded one, and is likely sitting on huge profits. But, with a stake of almost 15%, how does Fidelity realize those profits? They can't really sell all those shares, as it would put so much pressure on the stock that the gains would likely be reduced substantially. 13-F filings can provide clues as to what is going on; 13-F's for Q3 show that 13-F filers reduced their stakes in CRM by around 1.26% relative to Q2, which is not large enough to cause cracks in the stock's foundation (http://bit.ly/RPM0nW).
    Nov 19 09:00 PM | 2 Likes Like |Link to Comment
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