Friday, November 21, 2014
4:53 PM| 1 Comment
- Compass Point's Michael Tarkan has launched coverage on XOOM with a Sell rating and $11 target.
- Tarkan: "While we favor Xoom's operating model relative to the legacy money transfer agent model, increasing competition and ongoing concentration risk create uncertainty—and with shares trading at 42x our 2015 EPS estimate and 27x our 2016 estimate, versus peers at 10x-11x and 9x-10x, respectively, valuation appears rich."
- Shares fell 2% in regular trading, and aren't far removed from a post-IPO low of $14. They tumbled last month after Xoom provided light Q4 sales guidance and reported a drop in new customer adds.
- Maxim Group has launched coverage on Violin Memory (NYSE:VMEM) with a Buy rating and $8 target ahead of the flash storage system vendor's Monday FQ3 report. Shares rose 2.6% in regular trading.
- Violin, which has made big changes under new CEO Kevin DeNuccio, is up 29% YTD, but still down 43% from its $9 Sep. '13 IPO price.
- Hanwha (NASDAQ:HSOL) shipped 373.2MW of solar modules in Q3 (+10% Q/Q and +17% Y/Y), missing guidance of 400MW. But the company is guiding for Q4 shipments of 400MW-425MW, and says it's "on plan" to expand its annual cell and module production capacity to at least 1.5GW and 2GW, respectively.
- Module ASP fell to RMB3.74/watt ($0.61/watt) from RMB4.17 in Q2 and RMB4.16 a year ago. That, in turn, led gross margin to come in at 6.8% vs. 9.5% in Q2 and 5.1% a year ago.
- Hanwha attributes the ASP drop to a greater mix of Chinese sales, and a strong dollar. China rose to 30% of module revenue from just 6% in Q2. Japan and the U.S., two higher-ASP markets, respectively fell to 43% and 5% from 53% and 11%.
- On the other hand, opex fell to 12.8% of revenue from 13.1% in Q2 and 16.8% a year ago. Hanwha ended Q3 with $142.9M in cash, $482.5M in short-term bank borrowings, $80.3M in convertible debt, and $247.8M in long-term debt.
- Q3 results, PR
- Sigma Designs (NASDAQ:SIGM) has posted a decent rally on options expiration day. Volume was slightly above a 3-month average of 267K.
- Earlier this week, Sigma announced French carrier Orange is using its Z-Wave wireless transmitter ICs and software stack (aimed at home control/monitoring products) in its Homelive home automation solution.
- Geospace Technologies (GEOS -10.2%) is downgraded to Neutral from Buy at Dougherty, which also removed its price target, as the firm sees a difficult year ahead amid weakness in the seismic market.
- GEOS' Q4 results missed estimates due to disappointing product demand and gross margins, and industry commentary suggests the seismic market will continue weak into or perhaps through 2016, with the exception of ocean bottom seismic, the firm says.
- GEOS shares could remain under pressure with continued quarterly losses in the near term, the firm writes but adds that the $25.28/share tangible book value provides a rough floor.
- Cliffs Natural Resources' (CLF +12%) proposed note sale and offer to buy back some of its debt will improve its cash position but endanger its unsecured bondholders, according to researcher CreditSights.
- "The deal is a disturbing turn of events for unsecured bondholders just on the very negative structural subordination aspects of this deal... You’ll have a lot of secured debt that’s on top of the capital structure now,” CreditSights analyst Wen Li writes.
- S&P rated CLF’s unsecured notes BB- in an October report, but Li says the debt transaction makes the unsecured bonds appear to be more of a CCC-level quality.
- Petrobras (PBR +11.7%) says it has launched regular operations at its Cidade de Ilhabela offshore platform at the Sapinhoa field in the Santos Basin offshore Brazil.
- The facility can produce up to 150K bbl/day of oil and compress up to 6M cm/day of natural gas.
- Sapinhoa field production started in Jan. 2013 via an interconnecting well.
- PBR is the operator and owns a 45% interest, while BG Group (OTCPK:BRGXF, OTCQX:BRGYY) holding 30% and Repsol (OTCQX:REPYY, OTCPK:REPYF) 25%.
- Believing Aruba's (ARUN -13.1%) soft FQ2 guidance reflects tough competition and slowing industry growth, BofA/Merrill has downgraded the enterprise Wi-Fi hardware vendor to Underperform. Its target is $21.
- Dougherty is defending Aruba, arguing 802.11ac adoption will drive growth - the firm notes only ~10% of Aruba's base has migrated. Dougherty also expects share gains (aided by ClearPass and Aruba Instant) and new channel partners to help Aruba's cause, and considers guidance conservative.
- After opening higher, rival Ruckus Wireless (RKUS -6.7%) is following Aruba lower. As is Aerohive, which was downgraded today by Macquarie.
- Down 3% yesterday after posting mixed Q3 results and reiterating its full-year module shipment guidance, JinkoSolar (NYSE:JKS) is shooting higher today. Volume (2.8M shares) is already above a 3-month average of 2.1M.
- SA author The Panoramic View remains bullish, citing Jinko's industry-leading manufacturing costs, growing downstream solar ops (1.8GW pipeline, with 461MW of projects expected to be connected in Q4), and low forward P/E (5.2 going into today).
1:10 PM| 8 Comments
- Maxim Group has launched coverage on Nimble Storage (NMBL -4.1%) with a Hold rating and $28 target. The launch comes ahead of Nimble's Nov. 25 FQ3 report, and three days after the company officially added Fibre Channel support to its CS-series arrays.
- Meanwhile, founder/CTO Umesh Maheshwari has disclosed he sold 32K shares on Tuesday and Wednesday, and marketing chief Daniel Leary has disclosed the sale of 17K shares on Tuesday. Maheshwari had already unloaded a large chunk of his Nimble holdings earlier this year.
12:59 PM| Comment!
- Lukoil (OTCPK:LUKOY, OTC:LUKOF) has climbed 12% in U.S. trading this week, and BCS Financial is advising clients to buy the Russian oil producer’s stock, saying the “huge discount” to its biggest competitors is not justified.
- Lukoil’s stock price does not reflect the tax benefits it will get from developing new Caspian Sea fields as well as production in areas where crude is more difficult to extract, BCS believes.
- Lukoil, up 3.5% today, said yesterday that overseas output jumped 44% YTD.
- Halliburton's (HAL +2.4%) takeover of Baker Hughes (BHI +1.3%) will create an oilfield services powerhouse in North Dakota with more than half of the cementing market and a leading position in fracking, Reuters reports.
- In the Williston Basin, the combined company will control 53% of the market to line a new well with cement to prevent leaks, as well as 36% of the market for fracking and 35% of the market for directional drilling, according to the data.
- The North Dakota market share projections for the combined company will be of interest to competitors and regulators, as the deal is expected to face stiff antitrust hurdles and receive close scrutiny from regulators in the U.S. and Europe.
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