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Marty Chilberg

 
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  • Microsoft: Dividend Increase Vs Buyback? [View instapost]
    Company announced the increase of 3 cents or 11% increase today.
    Sep 16 10:24 PM | Likes Like |Link to Comment
  • TeleCommunication Systems: Growth Drivers on All Fronts [View article]
    Thanks. I haven't done a deep dive nor prepared a forecast for quite a while, but I do listen to conference calls and track order and hiring activity. The company has stated that they believe the business cycle bottomed in the Dec-13 quarter. Activity would indicate that may very well be true. They have increased open job postings from 32 in January to 81 now. The recent order for $13m is pretty small but with their low cost VSAT business and prime status on CS2, they are the military go to vendor for SatComm business. With increasing activity in both Ukraine and more importantly Middle East, the probability of incremental orders is pretty high and likey why they have been rallying of late.

    Commercial business remains pretty good. NG911 market share is over 60% but still state/fed funding constrained. Trending up in funding though. Also liked their agreement on Indoor LBS. This is a big future opportunity (projected to grow at 45% CAGR)and NextNav is putting a lot of money into indoor antennas/beacons. The connected car opportunity continues to look good with both QNX and now the AT&T Drive Studio.

    They have restructure the debt to the point where I don't see it as a big negative anymore. FCF is adequate so they are in a good position if the top line starts growing again.

    I should probably ping their CFO for an opportunity to chat and dig deeper. Note that I do post comments about them in an investor forum I helped start. Mostly about SQNM but I'm adding comments on a lot of other companies I watch and hope to grow the content to be more robust over time. Only a month old so just getting started. Check it out if you get a chance.
    best
    marty
    http://bit.ly/1nO4a7M
    Sep 11 11:30 AM | Likes Like |Link to Comment
  • Sequenom Q2 2014 [View instapost]
    Company provided update during Morgan Stanley breakout that Intl M21 accessions were 12% of total. That was up nicely from Q1 so the issue was domestic rather than Intl
    Sep 9 06:59 PM | Likes Like |Link to Comment
  • Infrequently Asked Questions: Sequenom [View article]
    The Morgan Stanley presentation yesterday ended with a reference to 20 cancer discovery events as an outcome of their prenatal screening. The analyst reference to this being a good tease appears to be consistent with the article reference to strengths in Onocology and discussions about leveraging this strength going forward.
    Sep 9 09:46 AM | 3 Likes Like |Link to Comment
  • Infrequently Asked Questions #IAQ [View instapost]
    SA declined to publish the first article. Primary reason was the format of Q&A was problematic. My view is this type of article would not be acceptable to a CFO unless I took the approach I did and the Q&A style is far better for the reader.

    Future articles will be posted on a new investment forum here
    http://bit.ly/1nfFy7u
    Aug 21 03:17 PM | Likes Like |Link to Comment
  • NPS Pharmaceuticals: Upgrade Lost In The Macro News [View instapost]
    I'm not very good at picking stock price targets for bio plays. The upside movement is dictated by momentum player as well as short covering and typically doesn't follow any real fundamental analysis. GIven the previous high around $40 and the high price target by analysts of $44, it wouldn't surprise me to see the exceed both of these with a Natpara approval and any incremental good news on pipeline.
    Aug 18 07:17 AM | Likes Like |Link to Comment
  • Yes, Me Worry [View article]
    Overall perspective is interesting but not particularly actionable to me. Takeaways:
    1) There is virtually 100% guarantee that we will see a large correction at some point which will be quite painful. There is also a negligible probability of most investors seeing it before it starts. The more that try to predict it, the less probably it is of occurring. Those that try to time the market for the constant predictions of a selloff will inevitably under perform the market, even if they ultimately claim to have been correct.

    2) If there is a significant selloff in the short term it is probable that it will be triggered by some event. That trigger point will not allow IBB components like GILD to avoid participation. GILD is a great long term play that will likely recover faster than most after a correction but I have no doubt it will participate as will CELG, BIIB, or any other bio/pharma play that many believe are undervalued.

    3) The bond market disconnect with the stock market may not be a disconnect in the way most believe. The bond market is most concerns with inflation which will drive up long term rates, creating a loss of principal. The stock market has no real issue with an increase in the inflation rate to 2-3% aside from the impact on QE. We already know QE is ending and we have seen through many interest rate cycles that modest rate changes in the beginning of a rising cycle will not derail a stock market. Could be that the answer to the author's question is somewhat included in the Question? Yes the US 10 yr is hovering at lows that no one predicted but the in addition is likely a large part of the answer. European bonds are at LOWER rates causing capital to flow to US. If a bond investor wants to invest in bonds and doesn't feel inflation will cause interest rates to escalate rapidly would they rather invest in US 2.4% or Bund 1% bonds?

    4) US consumers are slowing their discretionary spending as has been seen with lower credit card debt than we've seen for some time. That's a GOOD thing for the long term health of the economy but yes it does impact US GDP which is 70% consumer driven. However, what is the consumer doing with their incremental income? They are investing in durable goods such as autos and houses while also increasing their investment in education. The trade off seems to indicate that consumers were holding off on buying stuff as they invested in themselves (though somewhat because of high unemployment rates). Now that employment is increasing as are wages, the money is being spent but not on consumables.
    Good article to generate thought and conversation! Also the allocation to cash is a pretty solid judgment. Hard to buy undervalued stocks if we never sell overvalued ones.
    Aug 14 03:53 PM | 10 Likes Like |Link to Comment
  • Macy's Joins The Crowd [View instapost]
    Stock now testing 200 day MA. Watching for entry at or below $55.
    Aug 13 02:11 PM | Likes Like |Link to Comment
  • Putting Microsoft's Surface-Related Losses Into Perspective [View article]
    Nicely written Alex. I continue to chuckle at the lack of insight so many "gurus" have. IF a company has too much cash on hand and is using it to buy back stock or increase dividends, the uproar is that they would be far better off to invest in new products or R&D. When they do just that the noise gets louder about how they can't afford to lose money on new product initiatives.

    Investors need to take a longer view and tune out the noise, whether it is those daily proclaiming a 40% drop in the S&P is inevitable, a 10 yr bull is guaranteed, or an investment in a product that was largely expected to lose money can't be afforded by a company with cash flows that dwarf the short term loss.
    Aug 12 11:41 AM | 3 Likes Like |Link to Comment
  • How To Pick Up The Profitable Pieces After Insys Therapeutics Has Crashed Back To Earth [View article]
    I have mixed reactions to this article. There is a lot of good information here and I also jumped in on what I felt was a price dislocation caused by concerns over the Medicaid Fraud issue. This stock is extremely undervalued from an earnings/pipeline perspective ignoring any impact of Medicaid investigation and numerous lawsuits. So my conclusions are definitely in line with the authors.

    However, investors should take note of a couple of things I found lacking here.
    1) The author is a bit disingenuous presenting an argument that INSY was overvalued when he first looked at it and now is a value investment. His yardstick switched from looking at trailing earnings (50.35x C13 earnings was exorbitant) to looking at future earnings (C15 PE 14.25 ex-cash). In reality this stock was NOT overvalued from a forward earnings multiple in Mar-14. This sell-off had very little to do with the fundamental valuation based upon earnings.

    2) The conclusion that investors should buy now and earn 15-20% per year for many years to come also sounds way too much like a safe yield based investment.

    I'm long but realistic. This is a heavily shorted stock that is rallying now due to earnings which were excellent. However, this stock is heavily shorted because of the possibility of company complicity in the Medicaid Fraud. The company has denied it, but some claim the company had very aggressive sales practices which contributed to the fraud. This stock could easily rally another 20% in the short term on the fundamentals. It could also sell off 15-30% thereafter if shorts that covered decide to re-enter. Buyers should be aware of both sides of this stock before they put their hard earned money to work.
    Before this investigation this appeared to be an earnings and growth story stock. Now it has a similar volatility profile to most small clinical stage bios. 
    Aug 12 09:24 AM | Likes Like |Link to Comment
  • Sequenom Q2 2014: Income Tax Accounting [View instapost]
    My price target remains at $5.50 which is also what I would peg their fair value at. At that price, the EV would be $785 million with a forward EV/NTM revenue multiple at 4x. I'll re-evaluate after the low cost NIPT is launched and some details about the economic impact of the product is made available. Likely around the end of this year.

    The multiple at 4x is at the low end of the valuation range. That seems justified because of slowing growth in high risk, lower market share internationally and litigation risk with legal fee cost burden. If this risk profile changed, I'd adjust my price target accordingly.
    Aug 3 10:31 AM | Likes Like |Link to Comment
  • Sequenom beats by $0.04, misses on revenue [View news story]
    Bad reporting. Company did not miss on revenues by $8m because most of that difference was the sale of the Bioscience segment which is included in discontinued operations. Analysts that corrected their forecasts were around $40m
    Jul 29 04:39 PM | 3 Likes Like |Link to Comment
  • June 2014 Earnings Season: Week Ended July 25 [View instapost]
    Interesting earnings tidbit:
    Excluding financials, the S&P earnings growth rate is at 8.5% this quarter. That's the highest level seen over the past 3 years.
    Jul 29 10:30 AM | Likes Like |Link to Comment
  • Clinical Labs Recap Q2-2014: Slowly Improving Climate [View instapost]
    Note: PKI is scheduled to release earnings on 7/31. Will add them to this blog at that time.
    Jul 25 11:26 AM | Likes Like |Link to Comment
  • Sequenom: Q2 2014 Earnings Preview [View instapost]
    Thanks for the comment. Wedbush appears to understand the situation well. Their forecast for revenues is a little below mine but the back collections and conversion impact are just a stab in the dark for everyone so it could have a range of $5 million or so and would still be within norms.
    Jul 22 01:35 PM | 1 Like Like |Link to Comment
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