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  • Wireless Ronin Technologies (RNIN), Mentor Graphics (MENT) and Opnext (OPXT) Gain on Earnings Losses  0 comments
    Aug 24, 2009 4:13 PM | about stocks: RNIN, MENT
    Despite earnings losses, Wireless Ronin Technologies (RNIN) gets NEC boost, Mentor Graphics (MENT) beats expectations and Opnext (OPXT) client list offsets red ink.

    Fed Chairman Ben Bernanke today said the U.S. economy is on the verge of a long-awaited recovery and economic activity in both the U.S. and around the world appears to be "leveling out." That provided a strong bull market today and helped three SmallCaps that, despite earnings losses, picked up buyers. Wireless Ronin Technologies (RNIN) shares got a boost from its affiliation with NEC, Mentor Graphics (MENT) beat expectations and the Opnext (OPXT) client list continues to offset red ink.  

    Gaining over 36% ($0.88) this morning is Wireless Ronin Technologies Inc., (RNIN) http://www.wirelessronin.com/ which set a new market cap of $49 million. RNIN has a 3-Month average daily trading volume of a mere 21,083 shares but today topped 810,848 shares traded. RNIN is currently trading in the $3.28 range.

    RNIN posted Q2 2009 revenue of $1.0 million, a 40% decrease from $1.6 million in the second quarter of 2008. RNIN reported a second quarter net loss of $2.7 million, or $0.18 per basic and diluted share, compared to a net loss of $5.0 million, or $0.34 per basic and diluted share, in the year-ago quarterly period. Smaller, but still a loss. RNIN did have a better margin period: Q2 gross margin averaged 23 percent, compared to a gross margin of four percent in the second quarter of 2008. RNIN management said the increase was primarily the result of a shift in revenue from the sale of hardware to the sale of software and services, which yields a higher percentage margin of profitability

    NEC...

    RNIN management was clear to point out that the Company's recently announced strategic partnership agreement with NEC Display Solutions of America, Inc. will substantially expand its sales reach by extending RNIN software into the hands of NEC sales personnel across the United States and Canada.

    RNIN designs and develops application-specific visual marketing solutions that provide enterprise-level or hosted content delivery system that manages, schedules, and delivers digital content over wireless or wired networks.

    In the $3.28 range, RNIN is below its 52-week high of $3.98 set on 09-02-08 and above its 52-week low of $0.39 set on 12-04-08. At $3.28, RNIN is above both its 50-day and 200-day moving averages. RNIN has trailing twelve month revenues of $6.25 million. Its shares out versus float ratio is at parity.

    Gaining 14.90% ($1.18) this morning is Mentor Graphics Corp., (MENT) http://www.mentor.com/ which is currently trading on the Nasdaq in the $9.04 range. MENT has a new market cap of $851 million. MENT has a 3-Month average daily trading volume of 910,569 shares and easily tripled that by mid-session topping 2,898,443 shares traded.

    Late yesterday, MENT reported a wider Q2 2009 loss but adjusted results and sales beat analysts' expectations. MENT lost $21.3 million, or 22 cents per share, in the quarter ended July 31, compared with a loss of $18 million, or 19 cents per share, year ago.

    However, MENT management noted that excluding items related to R&D, interest expenses and the cost of revenue, the Company would have earned 2 cents per share, compared with a loss of 2 cents per share a year earlier. MENT revenue totaled $182.6 million, a wash with $182.4 million a year ago.

    Guidance-

    MENT management said it expects revenue and adjusted income in Q3 to top Wall Street expectations and expects revenue of $183 million and adjusted earnings of a penny per share. Analysts were expecting Q3 revenue of $179.6 million and a loss after items of 2 cents per share.

    MENT provides software and hardware design solutions to develop electronic products for the military/aerospace, communications, computer, consumer electronics, semiconductor, networking, multimedia, and transportation industries worldwide.

    At $9.04, MENT is below its 52-week high of $13 set on 09-02-08 and above its 52-week low of $3.34 set on 03-06-09. At $9.04, MENT is above both its 50-day and 200-day moving averages. MENT has trailing twelve month revenues of $803 Million. MENT is widely held by institutions. Its shares out versus float ratio is near-parity.

    Consistently Trending Up...

    Another company with poor earnings but a big offsetting factor is Opnext Inc., (OPXT) which gained 14.10% ($0.32) in early trading today. OPXT is currently trading in the $2.50 range. OPXT has a 3-Month average daily trading volume of 197,188 shares and easily doubled that by mid-session flying past 421,987 shares traded today.

    On August 6, OPXT reported a Q2 2009 net loss of $23.7 million or loss of $0.27 per fully diluted share, compared to a net loss of $118.8 million, or loss of $1.39 per fully diluted share for Q1 09. Comparison of OPXT Q2 2009 and Q2 2008 sales were encouraging: Q2 09 revenue increased $1.1 million, or 1.3%, to $85.3 million, compared to $84.2 million for Q2 08.

    Big Customers...

    In an August 10 8-k SEC filing, OPXT noted in its MD&A for Q2 09, three customers in aggregate, Ciena, Cisco and Nokia Systems Networks, represented 57.6% of sales and two customers in aggregate, Cisco and Alcatel-Lucent accounted for 54.5% of sales. I believe that customer base is why investors and new buyers have such a high regard for OPXT.

    At $2.50, OPXT is below its 52-week high of $6.57 set on 09-02-08 and above its 52-week low of $1.29 set on 11-21-08. At $2.50, OPXT is above both its 50-day and 200-day moving averages. OPXT has trailing twelve month revenues of $319 million. OPXT is widely held by insiders. Its shares out versus float ratio is near-parity.

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    Stocks: RNIN, MENT
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