Monday, November 23, 2015
- "Myopic trading due to bad weather is an opportunity, not a problem," says Dane Capital Management, still bullish on AgroFresh Solutions (NASDAQ:AGFS), after the stock was hammered last week after an in-line Q3, but lack of Q4 guidance and management comments about a weak harvest.
- The company has since provided soft guidance - midpoint of 2015 EBTIDA of $90M was down from $100M - but Dane thinks the 40%+ decline in the stock price over the previous three months has more than baked this in.
- Management and the board seem to agree and today disclosed purchases of nearly 39K shares of company stock last week.
- 2016 could see strong growth with just a trend harvest, and the company's new Harvista and SmartLock technologies continuing to gain traction, says Dane. Other catalysts include coverage from the bulge bracket firms who underwrote the SPAC, and a $10M buyback program.
- Related: AgroFresh Solutions Looks Like A Ripe And Tasty Investment (Sept. 21)
- Daniel McCranie discloses he bought 100K ON Semi (ON -0.4%) shares last Friday at $10.20, raising his total stake to 260,781.
- The purchase came two days after ON fell hard in response to news it's buying analog/power management chipmaker Fairchild Semi in a $2.4B all-cash deal.
- S&P placed ON's credit rating on review for downgrade in response to the deal, which will primarily be funded via debt. However, Citi's Chris Danely upgraded to Buy and hiked his target by $4 to $13, while declaring he has "high confidence" in ON's post-acquisition accretion targets.
- ON, for its part, has declared the deal will "bring together two companies with complementary product lines to offer customers the full spectrum of high, medium and low voltage products." It's the latest on a very long list of major chip industry acquisitions to have occurred over the last 24 months.
- Activist Elliott Management has disclosed it bought 178.5K Citrix (CTXS +1.3%) shares last Thursday through one entity, and 346.5K through another. Purchase prices ranged from $72.83-$73.41.
- The buys came after Citrix tumbled on Wednesday in response to the mixed 2016/2017 guidance provided with news it's spinning off its GoTo software unit (as sought by Elliott) and cutting more jobs.
- Nathaniel Lucas discloses he bought 10K ROVI shares last Thursday at $10.42, bringing his total stake to 35,214.
- The purchase comes less than a month after Rovi plunged in the wake of a Q3 miss blamed on the end of a licensing contract with a consumer electronics OEM.
- Activist Engaged Capital (won two board seats in May)has continued buying Rovi shares since the Q3 report. Following its most recently-disclosed purchase (on Nov. 10), Engaged owned 1.04M shares.
- FBR Director of Research David Hilal and team started with 250 dividend stocks tracked by the company, then narrowed it to 25 to own in a rising rate environment, and then further trimmed the list to a favored ten.
- Among the requirements: A minimum yield of 3%, an extremely safe payout with the opportunity to go higher, and stable to improving fundamentals which might drive share price appreciation in addition to the dividend.
- The highest yielder of the group is New Residential (NYSE:NRZ) at more than a 15% yield. Analyst Jessica Levi-Ribner figures the stock deserves something closer to a 9% yield given its growing book value and clear outlook into earnings and the dividend (which has been on the rise).
- The lowest yielder on the list is James River Holdings (NASDAQ:JRVR) at just over a 2% yield, but that's not counting special dividends - FBR expects the yield is nearly 9% once those are factored in.
- The rest: Blackstone Mortgage Trust (NYSE:BXMT), Peak Resorts (NASDAQ:SKIS), Great Ajax (NYSE:AJX), Hospitality Properties (NYSE:HPT), Preferred Apartments (NYSE:APTS), Western Gas Partners (NYSE:WES), National CineMedia (NASDAQ:NCMI), Physicians Realty Trust (NYSE:DOC).
- "Given the segment's momentum, we believe 2016 will be an inflection point for [augmented reality] smart glasses," writes Morgan Stanley's Charlie Chan, launching coverage on Himax (NASDAQ:HIMX) with an Overweight rating and $8.50 target.
- Chan declares Himax, which supplies LCoS microdisplays for Google Glass and is believed by some analysts to have a supply deal for Microsoft's HoloLens, well-positioned to benefit AR/VR headset adoption. He also expects the recent launch of OLED driver and TDDI (integrated touch controller/display driver) ICs to strengthen Himax's display driver business.
- The coverage comes two weeks after Baird started Himax at Outperform, shortly following the company's Q3 report.
- Stating checks indicate the company is facing bigger-than-expected competitive, cost, and product timing risks, JMP Securities has downgraded Cavium (NASDAQ:CAVM) to Underperform, and set a $50 target.
- The firm adds it considers both consensus estimates and Cavium's valuation too high. The call comes less than a month after Cavium issued light Q4 guidance to go with in-line Q3 results, while blaming a distribution model change at its largest data center client.
- Shares have fallen to $68.75 premarket. The network processor/ARM server CPU vendor trades for 40x a 2016 EPS consensus of $1.73.
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