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Stephen Percoco, CFA

 
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  • Brightcove Third Quarter Update
     • Sat, Dec. 13 BCOV Comment!

    Summary

    • The third quarter non-GAAP loss of $0.03 per share was significantly better than management’s guidance of a loss of $0.08 to $0.09 per share.
    • Yet, Brightcove showed only slight sequential improvement in its revenues, loss per share and cash flow.
    • Investors were relieved that Brightcove’s financial performance did not deteriorate in the third quarter, but the company remains a work in progress.
    • With new products and progress in its revamped marketing efforts, Brightcove remains optimistic about its future prospects.
    • As this transition period ends, investors will begin to focus more on the company’s sequential performance to assess its progress and growth potential.
  • Greece Schedules A Parliamentary Election, Shares Plunge
    Wed, Dec. 10 BPIRY, NBG, GREK 10 Comments

    Summary

    • Greece has scheduled a surprise parliamentary election for next week (Dec. 17) to bring to a head a potential political crisis.
    • Given the progress made by the country to date, it should be able to hold back the threat to its economic recovery program from Syriza, the leftist party.
    • The Greek stock market fell 12.8% yesterday. Greek banks fell more. This looks like a good buying opportunity.
  • Consolidated Water Update
     • Wed, Dec. 10 CWCO 7 Comments

    Summary

    • Third quarter earnings improved, due mostly to better weather and increased tourism in the Cayman Islands.
    • Water sales growth has been slower than anticipated in Bali Indonesia, but the long-term prospects still look good.
    • The Rosarito Mexico project has moved forward, but the company should provide clearer guidance on future project costs and an updated timeline.
    • The stock will likely remain range-bound between $10 and $12 until resolution of key issues is in sight.
  • After The Special Dividend, Iron Mountain Can Deliver A 9% Total Return
       • Fri, Nov. 7 IRM Comment!

    Summary

    • IRM’s conversion to a REIT in 2014 has been a big win for investors. YTD, the stock has delivered a 23% total return.
    • Yet, the stock still carries a 5.2% dividend yield, well above the 3.5% average for all equity REITs.
    • If the company can achieve its 4% growth objective for adjusted OIBDA, the stock should deliver an annualized total return of 9% (or better).
  • Brightcove Update
       • Wed, Oct. 1 BCOV 1 Comment

    Summary

    • Brightcove’s stock fell 38% to $6.38 on July 24, when it reduced its 2014 revenues and earnings outlook. The cut in outlook was modest. Second-quarter results actually exceeded guidance.
    • BCOV’s fall was exacerbated by the resignation of its CFO, which raises concerns about hidden accounting or financial problems. Although disclosures should be improved, I found no proof of problems.
    • With a recent acquisition and operating losses, BCOV’s cash position has dropped sharply this year. If the cash burn does not end soon, BCOV will need to raise capital.
    • According to Frost & Sullivan, BCOV’s core market is expected to double by 2019 (in five years).
    • Although BCOV looks expensive by traditional valuation measures, the stock still has upside (to my $15 target), assuming that no problems emerge and the company moves steadily toward profitability.
  • Crunch Time For UMH
       • Tue, Sep. 30 UMH 8 Comments

    Summary

    • Despite weak industry conditions, UMH has been acquiring new communities to drive profit growth, in many cases by upgrading properties and sales staff to boost occupancy.
    • UMH’s overall occupancy level has improved from 77% at the end of 2011 to 81.7% at mid-year 2014, but gains have been disappointingly slow in the past 18 months.
    • With further improvement in the economy and the opening of four home sales centers by yearend, the pace of profit gains should begin to accelerate.
    • UMH’s core FFO has averaged about $0.60 per share over the past three years, below the $0.72 per share dividend on its common shares.
    • If profit growth accelerates, UMH’s shares have the potential to reach $14-$15. If not and investment property spending requirements remain high, it will have to pare the dividend eventually.
  • Brightcove 2014 Second Quarter Earnings Preview
    Thu, Jul. 10 BCOV 6 Comments

    Summary

    • BCOV has fallen back modestly after a 38% gain in eight weeks, probably on profit taking.
    • New product introductions should resonate with big media customers and lift revenues within the next few quarters.
    • Consensus estimates for the second quarter and management's guidance for 2014 appear to be conservative.
  • Starwood Waypoint: 50% Upside And A Potential 5% Yield
       • Mon, Jun. 30 SWAY 6 Comments

    Summary

    • In January, Starwood Property Trust joined forces with Waypoint Real Estate Group to form Starwood Waypoint to pursue opportunities in non-performing residential mortgages and the single-family rental market.
    • Despite posting losses since its inception, SWAY should see steady increases in occupancy which should bring it to profitability within the next few quarters.
    • Based upon earnings growth opportunities within its existing portfolio and from future property acquisitions, SWAY’s stock has 50% upside and a potential 5% dividend yield.
  • An Overview Of The Single-Family Rental REIT Sector
    Editors' Pick • Mon, Jun. 30 AMH, ARPI, BX 32 Comments

    Summary

    • Some RE pros question the viability of the single-family rental business, but tight mortgage underwriting standards and low savings rates should sustain rental demand and a role for SFR REITs.
    • SFR REITs are boosting profits by fine tuning their operating policies and practices and gaining greater scale in metro markets.
    • SFR REIT valuations currently anticipate profit growth, but further gains in occupancy, operating refinements, modest house price appreciation (HPA) and steady new household formations should eventually raise profit outlooks.
  • Another Step Forward For Electronic Bond Trading
    Mon, Jun. 23 IHY, HYXU, PGHY 2 Comments

    Summary

    • The SEC will work with FINRA and the MSRB and propose new rules to enhance disclosure and ensure fair dealing in the fixed income markets.
    • Price quotes and trading activity for fixed income securities on online trading platforms have improved markedly in the past two years.
    • The SEC should take care to ensure that its rule-making does not inadvertently reduce liquidity in the fixed income markets.
  • Detroit In Chapter 9: Orr Plays Hardball
    Editors' Pick • Thu, Mar. 27 MUB, PZA, MUNI 34 Comments

    Summary

    • Detroit’s bankruptcy filing will likely set a number of precedents with significant implications for the municipal bond market.
    • The City has proposed paying unsecured creditors 20 cents on the dollar, even holders of its General Obligation bonds, which have traditionally been viewed as having a priority claim.
    • It has also proposed canceling $1.4 billion of Certificates of Participation used in a complex and controversial financing to shore up Detroit’s pension funds in 2005 and 2006.
    • Although trading is sparse, prices of unsecured bonds are above levels implied by the City’s proposed recoveries. Some of the difference may be due to the availability of insurance.
    • Even though the task is admittedly daunting, if the City is unable to reach an agreement with creditors, it may raise questions about its handling of the bankruptcy process.
  • Greece: Lots Done, More To Do
    Mon, Mar. 17 ALBKY, BPIRY, NBG 18 Comments

    Summary

    • Greece has achieved a primary budget surplus; unit labor costs are down sharply; the banking system has been recapitalized; and GDP is expected to grow in 2014.
    • Unemployment is a record 27%. Many structural reforms are on hold. House prices are still falling. Most Greeks are behind on their mortgages. Many Greeks suffer from austerity fatigue.
    • Greece’s stock and bond markets have rallied sharply over the past 18 months, but they are probably due for a correction.
    • Greek stocks remain well off 2008 highs and are among the cheapest on a P/E basis. Consequently, they still have good long-term upside potential.
    • Despite obvious frustrations in negotiations with the troika, Greece and its people should remain committed to its reform initiatives to provide a solid foundation for a sustainable economic recovery.
  • Give Brightcove Some Time
       • Tue, Feb. 18 BCOV Comment!
  • Notes, Observations And Analysis From EEI's Wall Street Briefing
    Editors' Pick • Fri, Feb. 14 AEP, GLU, GUT 1 Comment
  • Consolidated Water: A Speculative Bet On Desalinated Water
       • Tue, Feb. 11 CWCO 8 Comments
  • TIPS Underperform Treasurys In The 2013 Fourth Quarter
    Sat, Jan. 18 7 Comments
  • The Lowdown On Sky High Corporate Profits
    Editors' Pick • Nov. 12, 2013 SPY, QQQ, DIA 22 Comments
  • Booz Allen Hamilton STILL Looks Cheap
       • Nov. 7, 2013 BAH 1 Comment
  • TIPS: Modest Returns In Q3
    Oct. 24, 2013 IPE Comment!
  • Waning Momentum: What Will Lift The Market Going Forward?
    Oct. 21, 2013 DIA, SPY, QQQ 5 Comments
  • NBG Takes Another Step On The Path To Recovery
       • Sep. 17, 2013 NBG 17 Comments
  • Thinking Through The Normalization Of Interest Rates
    Aug. 29, 2013 IEF, TLT, SHY 4 Comments
  • In Detroit's Wake: A Review Of The Muni Bond Landscape, Part 2
    Editors' Pick • Jul. 31, 2013 MUB, MUNI, PVI 14 Comments
  • In Detroit's Wake: A Review Of The Muni Bond Landscape, Part 1
    Editors' Pick • Jul. 31, 2013 MUB, MUNI, PVI 10 Comments
  • TIPS Get Hammered In Second Quarter
    Editors' Pick • Jul. 11, 2013 TIP, STIP, LTPZ 5 Comments
  • Sentiment On Greece Reverses: NBG Shares Plunge 86% In 6 Weeks
    Editors' Pick • Jul. 1, 2013 NBG 35 Comments
  • Some Thoughts On The Recent Surge In National Bank Of Greece
    May. 20, 2013 NBG 61 Comments
  • After Clearing A Major Hurdle, Greece's Outlook Brightens
    Editors' Pick • Feb. 13, 2013 GREK, NBG, CCHBY 143 Comments
  • A Closer Look At The Dell LBO
       • Feb. 12, 2013 DELL 1 Comment
  • 2012 Market Return On TIPS
    Feb. 6, 2013 TIP, IPE 5 Comments
  • Housing Market Update
    Oct. 24, 2012 BZH, HOV, KBH 8 Comments
  • Gold And The Miners: The Ultimate Hedge?
    Editors' Pick • Sep. 18, 2012 ABX, CEF, GDX 49 Comments