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  • DSW - Growth Returns, Buy On Dips
    Dec. 2, 2014 DSW 3 Comments

    Summary

    • DSW has returned to its growth trajectory again, with comparable sales showing meaningful growth.
    • Despite this growth, margins have faced some pressure in the short run amidst an inventory built-up.
    • Before initiating a long term position, I require a margin of safety at levels in the low thirties.
  • Cypress And Spansion Merge, Here Is My Takeaway
    Dec. 2, 2014 CY 2 Comments

    Summary

    • Cypress and Spansion will merge in a $4 billion stock deal.
    • Both companies performed poorly independently, as they seek synergies to post profits as a combination.
    • Despite the appealing synergies, the pro-forma valuation can not convince me to jump the bandwagon currently.
  • Pall - Great Business, Great Past Returns, But Appeal Is Limited Going Forward
    Dec. 2, 2014 PLL Comment!

    Summary

    • Pall reported very strong results for the first quarter.
    • The company is sticking with its strong outlook for this year, despite the stronger US dollar.
    • The company runs a great business, and has a great track record, but the multi-year bull run has left the valuation too expensive currently.
  • Palo Alto Networks - Fresh Highs On Very Strong Operational Momentum
    Dec. 1, 2014 PANW 1 Comment

    Summary

    • Palo Alto Networks reports stellar sales growth again, pleasing investors and the wider investment community.
    • The strong sales growth which has been accelerating through the calendar year, has already resulted in shares tripling in the time period of a year.
    • Whether current levels are fair all depends on the potential profitability of the business model in the long run.
  • Workday - Modest Correction As Investors Fear Growth Slowdown Over Conservativeness
    Dec. 1, 2014 WDAY 1 Comment

    Summary

    • Workday reported solid and continued revenue growth in the third quarter.
    • Investors are not pleased with the outlook which calls for 40% revenue growth in the upcoming year.
    • Given the premium multiples, uncertain profit potential and increasing competition, I continue to trade shares from the short side.
  • Deere: Long-Term Appeal Remains Despite An Anticipated 40% Fall In 2015 Earnings
    Nov. 29, 2014 DE 6 Comments

    Summary

    • Deere beats on expectations for the fourth quarter results, as the outlook for 2015 is very soft.
    • The company anticipates that next year's earnings will drop by some 40%, much more than analysts have been anticipating.
    • Despite the dramatic earnings shortfall, the long-term appeal remains based on through-the-cycle earnings as well as a fair valuation.
  • Hormel Foods - No Appeal Yet, Following A Very Modest Correction
    Nov. 29, 2014 HRL 2 Comments

    Summary

    • Hormel Foods posts solid fourth quarter sales and earnings growth, as the investment community has been hoping for more.
    • The outlook for 2015 is a bit soft as well.
    • The resulting modest sell-off does not create appeal yet as the valuation remains at premium levels despite the strong track record and very strong balance sheet.
  • Smith & Wesson Acquires Battenfeld, Here Are My Takeaways
    Nov. 29, 2014 SWHC 3 Comments

    Summary

    • Smith & Wesson announces the acquisition of Battenfeld Technologies.
    • Battenfeld has shown strong growth in attractive markets.
    • The deal multiple is somewhat elevated, making me a little bit cautious amidst the run-up in leverage.
    • Yet the overall valuation remains appealing enough despite the uncertainties.
  • PerkinElmer - Small But Fair Deal Will Not Move The Needle
    Nov. 26, 2014 PKI Comment!

    Summary

    • PerkinElmer is expanding in the analytical instruments business.
    • The bolt-on acquisition seems fair, but does not move the needle in a big way.
    • Given the premium valuation, and questionable long term operational track record, I display caution.
  • Ross Stores: Great Business, Solid Results Leave Little Appeal Following The Momentum Ride
    Nov. 25, 2014 ROST 2 Comments

    Summary

    • Ross Stores has reported strong third quarter results.
    • As investors are not worried about a soft outlook for the fourth quarter, with the company being conservative.
    • I like the business as a long-term investment, as the strong returns in recent times have pushed up the valuation and momentum up too much, too quickly.
  • Lowe's - Accelerating Operational Performance As Valuation Remains High
    Nov. 25, 2014 LOW Comment!

    Summary

    • Lowe's posts strong third quarter results, demonstrating strong comparable sales growth and margins expansion.
    • The company has closed the pace of sales growth with its main rival Home Depot as profitability remains an issue.
    • Given the significant momentum witnessed in the stock already, and the resulting premium valuation, I remain cautious at current levels.
  • Second Sight - Open Your Eyes To This Disruptive Business
    Nov. 25, 2014 EYES 3 Comments

    Summary

    • Second Sight allows blind people to "see" again.
    • The disruptive implants being developed offer great appeal to patients, and potentially to long-term investors as well.
    • A potential investment in the company carries a great deal of risks, but could pay off big time in the long haul.
  • Habit Restaurants - Strong Growth Is Already Reflected In The Huge Post-IPO Run
    Nov. 25, 2014 HABT 20 Comments

    Summary

    • Habit Restaurants witnessed a hugely successful offering this past week.
    • Strong growth, a compelling value proposition and profitability drive the appeal.
    • Following the huge returns witnessed already, I am more cautious at current levels.
  • Target - Operational Momentum Accelerates, As This Is Already Reflected In The Shares
    Nov. 24, 2014 TGT 1 Comment

    Summary

    • Target posts solid third quarter results, as it anticipates comparable sales growth to accelerate.
    • This has already largely been reflected in the share price, with shares having risen some 30% from the lows in February.
    • Following the continued struggles in Canada, the premium valuation and strong momentum, I display caution at current levels.
  • Jack In The Box: Solid Results, Strong Outlook, More Than Fairly Valued
    Nov. 20, 2014 JACK Comment!

    Summary

    • Jack in the Box reports strong results, as Qdoba is on fire.
    • Investors like the current growth and solid outlook for the upcoming fiscal year of 2015.
    • Yet, after a multi-year run, and premium earnings valuation, I remain cautious.
  • TJX Companies: Solid Execution, Long-Term Appeal Remains
    Nov. 19, 2014 TJX 4 Comments

    Summary

    • TJX posts third quarter results which are in line with expectations.
    • The outlook for the fourth quarter is a bit soft, despite anticipated currency headwinds.
    • I like the shares, but am only willing to pay a market-equivalent multiple for a high quality business.
  • Urban Outfitters: Struggles Continue, Appeal Appears
    Nov. 19, 2014 URBN 1 Comment

    Summary

    • Urban Outfitters reports soft third quarter sales, as it already pre-warned in October.
    • At the same time margins took even a bigger beating than analysts have been anticipating.
    • The latest sell-off and the correction witnessed in recent weeks brings shares down to appealing levels in my eyes.
  • Halliburton - Deal Related Sell-Off Creates Opportunity
    Nov. 18, 2014 HAL 4 Comments

    Summary

    • Halliburton announces the major acquisition of Baker Hughes.
    • The multi-billion deal is marked by a big premium, potential regulatory hurdles and a huge break-up fee, worrying investors.
    • The resulting sell-off actually offers opportunities in my eyes at current levels.
  • Viacom: Opportunities Outweigh The Concerns, I Remain Cautiously Upbeat
    Nov. 18, 2014 VIAB 2 Comments

    Summary

    • Viacom posts strong fourth quarter results, alleviating some worries of its investors.
    • The company trades at non-demanding valuation multiples, returns cash to its investors at a rapid pace and its shares have seen a nice pullback recently.
    • These strong points outweigh the concerns I see for the business model and the leverage position, making me cautious optimistic at the moment.
  • Helmerich & Payne - Appeal Remains Despite Worsening Operating Conditions
    Nov. 18, 2014 HP 2 Comments

    Summary

    • Shares of Helmerich & Payne have seen a difficult weak following an earnings miss as oil prices hit new lows.
    • Shares of the rig company have fallen a third from the highs of this summer, yet they are flat so far this year.
    • Given the appealing valuation, the excellent long term track record, appealing dividend and strong balance sheet, long term appeal remains.
  • Pinnacle Foods - Another Deal Adds To Appeal, But Watch The Leverage
    Nov. 17, 2014 PF 5 Comments

    Summary

    • Pinnacle Foods acquires Garden Protein, adding another growth brand to its portfolio.
    • The deal is just small and does not move the needle, but underlies the strategic direction of Pinnacle.
    • I like the company a lot for the growth, equity valuation and dividend. Leverage is a concern, the reason why I only buy on dips.
  • PRA Health Sciences - Cautious Note On This CRO Offering
    Nov. 17, 2014 PRAH Comment!

    Summary

    • PRA Health Sciences is another contract research company making its public debut.
    • The KKR-backed business has grown by deals, and carries along a heavy debt load.
    • The premium valuation, high leverage and existence of informed investors who are selling, makes me cautious.
  • Axalta - Successful Debut, Little Appeal
    Nov. 16, 2014 AXTA 2 Comments

    Summary

    • Axalta has seen a successful public debut last week.
    • Investors like the coatings system business given its strong market positioning.
    • Appeal is limited in my eyes amidst a full valuation, the leverage employed and the exit of a sophisticated investor.
  • Flowserve - Nice Deal, As Shares Are Already Fully Valued
    Nov. 15, 2014 FLS 2 Comments

    Summary

    • Flowserve announced a very nice bolt-on acquisition of SIHI.
    • The deal takes place at attractive multiples as the company can benefit from margin gains and synergies as well.
    • Despite the really nice deal, which is too small to significantly move the needle, I remain cautious amidst a premium valuation.
  • Energizer - Spin-Off Terms Will Determine Appeal Going Forward
    Nov. 15, 2014 ENR Comment!

    Summary

    • Energizer is preparing to spin-off its household goods business, selling its batteries unit just like Procter & Gamble has done with its Duracell unit.
    • The company is making progress with this move, hoping to spin-off the business in roughly six months' time.
    • Depending on the terms of the spin-off, I will keep a close eye on the business, looking for future opportunities.
  • INC Research: Solid Play Following The IPO
    Nov. 14, 2014 INCR Comment!

    Summary

    • INC Research has seen a successful public debut.
    • The contract research firm shows healthy growth, and trades at fair multiples.
    • As such I like the business given the fair valuation, anticipated post-IPO profitability and growth prospects.
    • I will place the company on my watchlist, keeping a close eye on the post-IPO developments.
  • Freshpet - Growth And Innovation Attract Investors Into This Recent Offering
    Nov. 13, 2014 FRPT 1 Comment

    Summary

    • Freshpet made a successful public debut last week.
    • The company shows rapid growth, strong gross margins and is close to breaking even.
    • The growth, innovation and large addressable market is attractive to investors.
    • On the back of an elevated valuation, I remain somewhat cautious for now, placing shares on my watchlist.
  • Upland Software: Lack Of Organic Growth In A Rapidly Growing Industry Is A Major Red Flag
    Nov. 12, 2014 UPLD 2 Comments

    Summary

    • Upland Software's IPO disappointed.
    • The allure of cloud and rapid growth usually entices investors, but this wasn't the case with Upland's offering.
    • Due to a lack of organic growth combined with losses, I'm staying away from UPLD shares.
  • NCI Building Systems - Reasons For Caution Following The Centria Deal
    Nov. 12, 2014 NCS Comment!

    Summary

    • NCI announces the acquisition of CENTRIA in order to expand its offerings in metal panels used for roofing and wall systems.
    • The $266 million deal will result in a rather steep debt position, especially given the lack of real earnings at NCI currently.
    • High leverage nearly bankrupted the company during the crisis, as long term shareholders have essentially been wiped out following significant dilution.
    • Consequently I continue to avoid the shares for now.
  • Nevro - I Remain Cautious After A Successful Debut For This Pain Relief Company
    Nov. 11, 2014 NVRO 2 Comments

    Summary

    • Nevro witnessed a hugely successful public offering.
    • Shares jumped more than 50% as investors like the prospects for adoption of its chronic pain treatment within the US.
    • Given the already high valuation in relation to a somewhat modest addressable market, I remain a bit cautious following the momentum seen already.
  • Watts Water - Aerco Deal Looks Appealing, Yet There Are Many Reasons To Be Cautious
    Nov. 11, 2014 WTS 2 Comments

    Summary

    • Watts Water acquires Aerco in a $264 million deal.
    • The acquisition adds to the growth profile, margins and is both strategically and financially sound.
    • Despite the excellent deal, I remain very cautious amidst a steep overall valuation and long-term margin stagnation.
  • Laboratory Corporation: Strategic Acquisition Of Covance Appears To Be A Wealth Transfer
    Nov. 8, 2014 LH 1 Comment

    Summary

    • Laboratory Corporation announced the multi-billion dollar acquisition of Covance.
    • The deal is nice from a strategic point of view, but looks expensive in financial terms.
    • The high leverage and premium valuation on a pro-forma basis, limits appeal in my eyes.