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Rochelle Jenks

 
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  • Otter Tail Corporation: Diversifying With Diversification
    Editors' Pick • Thu, Dec. 18 OTTR 9 Comments

    Summary

    • Otter Tail Corporation is a diversified utility. Its electrical segment supports its dividend payments while its manufacturing and infrastructure segments offer earnings growth potential.
    • Otter Tail has paid a dividend since 1938. From 1975 to 2008, it increased the dividend annually. With the onset of the financial crisis, dividend bumps were put on hold.
    • Otter Tail is positioned to grow earnings from recent investments as well as cap-ex plans in its manufacturing and infrastructure segments. As earnings grow, its share price should naturally increase.
  • Update: Francesca's Third-Quarter Earnings And Lowered Guidance
    Thu, Dec. 11 FRAN 3 Comments

    Summary

    • Francesca's reported third-quarter results today which was not news considering it announced preliminary results last week when it announced a CEO departure and replacement.
    • As expected, Francesca's struggled again. It did meet the low-end of its guidance, but missed analysts' expectations. Regardless of projections, its same-store sales decreased for the 7th consecutive quarter.
    • The one surprise in the release was the degree of continued disappointing guidance for the fourth quarter, the holiday quarter.
    • Even with a quizzical flurry over its leadership change (share price has surged 30%), Francesca's does not present a compelling investment thesis.
  • Update: Looking For A Hot Hand At Francesca's Holdings
    Sun, Dec. 7 FRAN 2 Comments

    Summary

    • Francesca's Holdings announced a new CEO and president on Dec. 5; the 5th combination in those roles in 2-1/2 years. The market loved it.
    • The company announced preliminary third-quarter results that will miss analysts' current expectations. The market ignored it.
    • This latest substitution is odd. But, it is offering an exit point.
  • MWI Veterinary: The M&A Impact In Animal Health
     • Tue, Nov. 25 MWIV Comment!

    Summary

    • MWI Veterinary has almost a full year of benefit from the IVESCO acquisition last November. Its initial projection of $400 million in additional revenue paled in comparison to actual numbers.
    • The three leaders in the animal health distribution industry are all in M&A mode. Jockeying for the number one spot in the industry is underway.
    • The market operates in two distinct segments - companion animal and production animal. This distinction may drive M&A decisions as much as, if not more than, any other factor.
  • Update: Vertex Energy Q3 2014 Earnings
    Sat, Nov. 15 VTNR 11 Comments

    Summary

    • Vertex Energy reported earnings on November 13th. Like the second quarter, there was a surprise. But, unlike the second quarter surprise, the third quarter surprise was an EPS loss.
    • The loss was unexpected, but management deliberately reacted to some short-term events and didn't deviate from plan regarding others. In all cases, management kept its focus on the long term.
    • As the share price reacts to headlines, long-term investors are offered an interesting entry point.
  • Update: Matrix Service Company - Fiscal 2015 First Quarter Earnings
    Sat, Nov. 8 MTRX 1 Comment

    Summary

    • Matrix Service reported 2015 first quarter results on November 5th and reiterated 2015 full-year guidance.
    • As expected, Matrix grew revenue 42.2% year-over-year. Unexpectedly, Matrix' EPS fell year-over-year. Once again, its backlog hit another all-time high.
    • Even considering the mixed results, long-term investors should consider adding Matrix to their mix.
  • ClickSoftware: When The Clock Tolls
       • Wed, Nov. 5 CKSW 2 Comments

    Summary

    • Long-term shareholders of ClickSoftware have needed patience as the company has transitioned its business model to include mobile accessibility via cloud computing through a subscription model.
    • Through the transition, ClickSoftware set revenue records for year-over-year quarterly growth again and again. But, profitability eluded them. Then, it bought Xora and more patience was required of shareholders.
    • Facing a year-to-date non-GAAP loss, during the third quarter earnings call, ClickSoftware reiterated full-year guidance reflecting the fourth quarter would result in a full-year profit for the company.
  • Update: Trimble Navigation Q3 2014 Earnings And Struggles
    Sat, Nov. 1 TRMB 2 Comments

    Summary

    • Trimble Navigation reported 2014 third quarter earnings on October 30th. The good news was limited to revenue being up 5% year-over-year.
    • The challenges in the third quarter were unexpected... but are likely short-lived.
    • For the long-term investor, confidence in Trimble Navigation's ability to navigate could prove profitable.
  • Update: Echo Global Logistics Q3 2014 Earnings
    Sat, Nov. 1 ECHO Comment!

    Summary

    • Echo Global Logistics reported 2014 third quarter earnings last week with year-over-year 30+% increases in both revenue and non-GAAP EPS. This was the second quarter at that rate of growth.
    • As expected, notable progress was made toward Echo's 2017 targets.
    • Echo continues to deserve a spot on a long-term investor's buy list.
  • Update: Hornbeck Offshore Services Q3 2014 Earnings
    Fri, Oct. 31 HOS 2 Comments

    Summary

    • Hornbeck Offshore Services reported third quarter earnings October 29th resulting in a year-to-date revenue increase of 17% year-over-year and a year-to-date EPS increase of 19% year-over-year.
    • As expected, the additional vessels delivered from Hornbeck's fifth newbuild program account for the revenue increases along with higher dayrates and less downtime.
    • Hornbeck still trades well off its historical averages, industry averages and S&P averages. With the authorization of a $150 million share repurchase program, it offers even better value.
  • Update: Silicon Motion Technology's Q3 Earnings
    Fri, Oct. 31 SIMO 3 Comments

    Summary

    • Silicon Motion Technology set company records for quarterly revenue and quarterly EPS in the third quarter of 2014.
    • As expected, revenue and margins are increasing after its 2013 transformation.
    • Value investors interested in building a position in Silicon Motion before may want to take advantage of the confusion surrounding fourth quarter guidance.
  • Update: Blackbaud's Q3 2014 Earnings
    Fri, Oct. 31 BLKB Comment!

    Summary

    • Blackbaud reported third quarter revenue and earnings showing solid year-over-year growth.
    • As expected, recurring revenue from the subscription and maintenance segments grew. The margins for these two segments are the highest thus contributing more to the bottom line.
    • Year-to-date performance and the fourth quarter acquisition of MicroEdge resulted in Blackbaud management updating full-year guidance. Yet, Blackbaud shares still trade at a high P/E ratio.
  • Update: Acacia Research's Third Quarter Earnings
    Fri, Oct. 24 ACTG 9 Comments

    Summary

    • Acacia Research reported third quarter results on October 22. Revenue grew 140% over the prior year's quarter.
    • As expected, Acacia's updated approach of focusing on marquee portfolios and slate of second half trial dates drove the revenue jump.
    • As 2014 closes and the first half of 2015 approaches, the pains of Acacia's transformation should wane and its profitability should become evident.
  • Update: Lexmark International 2014 Third Quarter Earnings
    Wed, Oct. 22 LXK 2 Comments

    Summary

    • Lexmark International reported 2014 third quarter earnings on October 21. Revenue was $921 million and EPS was $1.05.
    • As expected, between organic growth in the content and process management software segment and the acquisition of ReadSoft, steady progress was made toward Lexmark's stated targets.
    • Lexmark is 17% off from its 52-week high. Combined with an above-average dividend and an active share buyback program, the potential share price appreciation offers rewarding upside.
  • Update: A.O. Smith 2014 Third Quarter Earnings
    Wed, Oct. 22 AOS Comment!

    Summary

    • A.O. Smith reported third quarter earnings on October 21st, 2014. Revenue grew 8.5% year-over-year and adjusted EPS grew 9% year-over-year.
    • As expected, third quarter results tracked well toward A.O. Smith's published targets for 2015.
    • As is still the case, A.O. Smith's share price is more fairly-valued than it is a bargain. A.O. Smith is simply a steady producer.
  • Hornbeck Offshore Services: What Pirated Its Value?
       • Fri, Oct. 17 HOS 6 Comments

    Summary

    • With third quarter reporting due in two weeks, a reminder that Hornbeck Offshore Services set quarterly records for revenue and income in the second quarter is timely.
    • The increases were attributable to Hornbeck's growing fleet count and occurred despite a volatile industry, lower utilization rates and lower effective dayrates.
    • Hornbeck's management projected it was transitioning to a sustained up-cycle.
    • Despite all this, Hornbeck's share price has fallen more than 50% from its 52-week high in October, 2013.
  • Blackbaud: Should Corporate Stewardship Trump Valuation?
       • Wed, Oct. 1 BLKB Comment!

    Summary

    • Blackbaud exists solely because of corporate stewardship. It provides a comprehensive suite of software solutions to non-profit organizations.
    • In 2012, when Blackbaud's revenue peaked, its EPS tanked. A CEO replacement, an office relocation, restructuring and a cost-reduction program followed in 2013.
    • Blackbaud's execution on its strategic plans through 2017 is "gaining momentum".
  • Barrett Business Services: A Purposely Dizzying Opinion Littered With Misinformation
       • Sat, Sep. 20 BBSI 21 Comments

    Summary

    • An opinion on Barrett Business Services published in a Seeking Alpha instablog sent the share price spiraling on September 16th.
    • While differing opinions are a valuable asset to diligent investors, this particular opinion warrants a diligent review.
    • Accusations of Barrett management misleading and misrepresenting abound in the opinion. Yet, the authors freely, and without apology, employ these exact tactics.
  • Update: Matrix Services Company Fourth Quarter And Full-Year 2014 Earnings
    Thu, Sep. 18 MTRX Comment!

    Summary

    • Matrix Services reported fourth quarter and full-year results which resulted in a severe share price adjustment.
    • As expected, Matrix grew fourth quarter revenue (46.2%) and full-year revenue (41.5%) by far more than its strategic revenue growth goal of 12%-15%. Its backlog also hit another all-time high.
    • As recommended, Matrix should be accumulated on pullbacks, even this one.
  • Update: Francesca's Holdings 2nd Quarter Eh-Earnings
    Wed, Sep. 10 FRAN 3 Comments

    Summary

    • Francesca's Holdings reported another ugly mess for the second quarter of 2014 even though management had projected some evidence of clean-up would be evident.
    • As expected, the bulk of the report showed more and more brokenness and cracks in comparisons and margins.
    • As the mess gets bigger, the crumbling will continue.
  • Lexmark International: Comparing Apples To Oranges Is Dicey
       • Tue, Sep. 9 LXK 2 Comments

    Summary

    • Lexmark International is undergoing a transformation from a hardware provider to a software and business solutions provider.
    • Lexmark is making progress on goals and targets it set in May 2013.
    • Its takeover of ReadSoft is a key factor in Lexmark hitting some of those targets. So, what makes ReadSoft such a compelling acquisition?
  • A.O. Smith: Heating It Up
       • Thu, Aug. 21 AOS 1 Comment

    Summary

    • A.O. Smith is a world leading manufacturer of water heating products. But, is it heating up more than water?
    • In its 140th year of operation, A.O. Smith has its operating and growth strategies well developed.
    • In late 2012, A.O. Smith defined aspirations for 2015. Yet, update after update after update has followed.
  • Update: Vertex Energy Second Quarter Earnings
    Fri, Aug. 15 VTNR 14 Comments

    Summary

    • Vertex Energy reported triple-digit year-over-year growth in revenue and earnings per share.
    • As previously described, Vertex Energy is turning trash to treasure in re-refining used oils and offering long-term treasure via a growing share price to value investors.
    • As expected, the first phase of the Omega deal did impact Vertex's results but investors should still dig to understand how. The share price should bounce yet again in 2014.
  • Update: Trimble Navigation Q2 2014 Earnings
    Sat, Aug. 9 TRMB Comment!

    Summary

    • After its share price dropped 20% from a June high of $38.99, Trimble reported beats on 2nd quarter revenue and EPS on August 5th.
    • The revenue beat and EPS beat were larger than expected, even by Trimble management.
    • However, as expected, there is more than revenue and EPS to draw investors' attention.
  • Update: Echo Global Logistics Q2 2014 Earnings Recap
    Sat, Aug. 9 ECHO Comment!

    Summary

    • Echo Global Logistics reported second quarter earnings with a 36% revenue beat and a 31% EPS beat compared to the same quarter of 2013.
    • As anticipated, the beats spurred a share price bump of 8%.
    • As Echo continues to track successfully against its 2017 goals, investors should see further share price improvement.
  • The True Maneuvers At Silicon Motion Technology
       • Fri, Aug. 1 SIMO 13 Comments

    Summary

    • Technology evolved leaving Silicon Motion to face transition in 2013 and chart a course for 2014 and beyond.
    • Silicon Motion believes it is the "only meaningful merchant eMMC controller provider" and is growing not only its market share, but also the total addressable market.
    • Silicon Motion has more business demands than resources to address them.
    • Silicon Motion's share price has more than doubled in less than a year. Yet a growing market, growing revenues and growing profit could still maneuver the price upward.
  • Trimble Navigation: Establishing Positions - This Isn't Just GPS Anymore
       • Fri, Jul. 25 TRMB 8 Comments

    Summary

    • In May, Trimble missed its first quarter guidance for EPS by one cent.
    • Since first quarter reporting, the share price has fallen at least 20%.
    • Analyst "calls" on Trimble appear to have triggered some of the price decline. Are their positions warranted?
    • Trimble's recent performance and projections into 2018 reflect steady, healthy growth.
  • Francesca's Holdings: Does That 'Broad And Shallow' Model Work?
       • Fri, Jul. 18 FRAN 24 Comments

    Summary

    • Francesca's is touted by bull opinions as a growth story. Most investors don't limit the definition of growth to strictly geographic expansion.
    • The same bull opinions claim that Francesca's business model will win out because it works. What if it is flawed? What if it is THE flaw?
    • Francesca's share price has fallen from highs in the $37 range in late 2012 to recent lows in the $13 range. Isn't that strange if it's a "growth' story?
  • Echo Global Logistics: Where Will It Be In 4 Years?
       • Wed, Jul. 16 ECHO 4 Comments

    Summary

    • Echo Global Logistics is tracking at one for two on its 2015 goals to-date.
    • Echo recently presented its 2017 objectives. Most are in line with past performance. One key metric requires a reversal of its historical trend.
    • Echo's share price does not seem to reflect the growth it has experienced or the growth it is projecting. Will reversing that trend change the share price?
  • Matrix Service Company Is Trustworthy And Thriving. Is It Too Late To Take A Shot?
       • Tue, Jun. 17 MTRX 12 Comments

    Summary

    • Matrix Service Company's stock price has more than doubled since June, 2013, and it was recently selected as one of America's top 100 most trustworthy companies.
    • Factors identified in early 2013 have turned both positive and negative. The negative turns, however, may have reasonable explanations.
    • Growth opportunities still abound. But, is that growth already priced in?
  • Vertex Energy: A Path To Treasure
       • Wed, Jun. 4 VTNR 16 Comments

    Summary

    • Vertex Energy's share price has increased 200% in 75 days.
    • Although Vertex Energy has experienced impressive organic growth, this growth does not justify the share price increase.
    • Value investors should dig through the facts to determine if the recent run-up was a lost opportunity or if there is still room for the share price to run.
  • Acacia Research's Elephant Hunt
       • Thu, May. 1 ACTG 12 Comments

    Summary

    • In early 2011, Acacia Research noticed shifting trends in its industry of patent management and began shifting its internal focus.
    • In the second quarter of 2013, after impressive revenue growth, Acacia's trend lines turned negative and its share price followed.
    • For two years, Acacia Research has focused on acquiring high-quality, high-revenue-potential patent portfolios.
    • 2014 and 2015 will prove the effectiveness of Acacia's business strategy for 2012 and 2013.