The Inflection Point's  Instablog

Below is a summary of recent analyst commentart on technically strong stocks at the top of our watchlist.  Hopefully, these quick summaries will be helpful for others as the prepare for the earnings deluge that is tmrw. 

INFA

Roth – 7/15/2009

Analysts raised estimates for Q2 higher than the consensus in June to $0.20 EPS for Q2.  Positive demand trends INFA saw in march continued into the June Q.  Rev estimate at $119.  Q2 guidance estimated at $120m and EPS of$0.20.  Upside to those estimates unlikely.  

ABAX

CL King – 7/13/2009

Hired 3 salesmen in June Q.  $75mm in cash.  ABAX has attractive growth opportunities in Medical and Veterinary divisions.  Rating  - Strong Buy.  June Q – Rev $25.8m EPS $0.14; Sep Q - $28.7m EPS $0.15; FY10 $121m EPS $0.65

CLS

CIBC – 7/19/2009

Analysts expect rev to fall 5% q/q as end markets remain weak.  Expect 2H growth as stabilization returns to end markets.  Q2 estimates: revs $1.4b; gm’s down 700 bps due to lighter volumes; EPS of $0.10.  Q3 guidance: rev $1.55b; EPS $0.13; FY09: rev $6.12b; EPS $0.50.  PT is $10.

NUVA

Brean Murray Carret & Co. – 7/16/2009

Q2 revs and EPS expected to be $85.7m & ($0.02), respectively.  The company is on track to launch several new products in the fall.  Analysts believe this will enable NUVA to continue its beat-and-raise history.  No slowdown in spine fusion as COBRA coverage (continued medical benefits after employee termination) picks up slack from rising unemployment.   NUVA continues to see increasing leverage from a more productive sales force and increasing product offerings. 

NFLX

Stifel Nicolaus – 7/20/2009

Rating: Buy.  PT $53.  Analysts expect NFLX to report Q2 revs of $409.7m and GAAP EPS of$0.52.  Q2 estimated to end with 10.5m subscribers.  Analyst estimates are at the high end of management’s Q2 guidance.  Five growth drivers 1) subscriber growth momentum 2) six-day or Saturday processing of delivery-by-mail DVD rentals 3) potential expansion of streaming library 4) potential addition consumer electronics partnerships 5) expanding adjusted EBITDA margins.  Rumors about an AMZN  seem unlikely.  Microsoft would be a better fit.

WGOV

DA Davidson – 7/20/2009

Analysts expect revs of $395m and EPS of $0.36 for Q2.  Rev slightly above street estimates and EPS in-line.  GM modeled at 27.6%.  Commercial after market likely to be weak.  Business jet market very weak but military and commercial OEM sales should remain strong.  PT $20. 

DECK

Susquehanna – 7/21/2009

Raising PT from $75 to $85.  Q2 is seasonally the slowest Q.  Analysts believe 2H09 expectations are very achievable, if not conservative.   Teva brand performed well in Q2 despite difficult weather and retail environment.  UGG brand continued to expand its spring assortments.  Retailer checks indicated that consumer demand remained high for UGG product.  Retailers expected to plan inventory cautiously but this is built into management’s guidance.  Analysts expect upside in Q2 but management will most likely keep 2H outlook conservative.   Q2 rev est $102m; GM 39.2%; EPS ($0.05); FY09 $7.40. 

Dicslosure:  We are long DECK calls for the accounts we oversee.