Food & drink breakouts
Leo Fasciocco specializes in "breakout" stocks. In Ticker Tape Digest, he eyes two food & drink plays: Buffalo Wild Wings (NASDAQ: BWLD) and Hansen Natural (NASDAQ: HANS).
"Buffalo Wild Wings operates a chain of casual dining restaurant that specializes in serving chicken wings spun in one of the firm's 14 original sauces, alcohol, and sports.
"The company owns, operates and franchises nearly 560 restaurants in 38 states and has annual revenues of $420 million.
The stock has moved up and out from a six-week flat base. The stock is near a 52-week high, which is bullish.
"BWLD came public at 10 in late 2003. The stock peaked at 47 in 2007. Since then it has an up an down pattern. Right now it is in the 'up phase'.
"Its momentum indicator is solidly bullish and the accumulation - distribution line is in a solid up trend. The pattern of buying is supportive of a move higher.
"We are targeting the stock for a move to 50 and suggest scaling in to positions. A protective stop can be placed near 39.
"Hansen Natural produces soft drinks, including natural sodas, fruit juice, and energy drinks. Its key product is the Monster Energy drink, the second-largest energy drink in the U.S. behind Red Bull. Annual revenues are $1 billion.
"Technically, the stock has broken out from a seven-week flat base today and makes a 52-week high. One of the largest trades was a block of 50,000 shares that crossed at $38.10.
"HANS' long-term chart shows the stock in a powerful bull market soaring from 5 in 2004 to a peak of 68 in 2007. The stock dropped with the bear market. However, it is now in a nice up trend.
"The stock's momentum indicator is solidly bullish and the accumulation - distribution line is in a strong up trend. It even broke out to the upside well before the price of the stock. So, it is showing outstanding buying in the stock. That is good confirmation of the breakout.
"HANS' breakout looks very good and we are targeting the stock for a move to 47 within the next few months, or sooner. A protective stop can be placed near 36."
Oberweis’ small cap favorites
Small cap expert Jim Oberweis, Jr. looks to two recent buys for risk-oriented investors in The Oberweis Report; one sells security X-ray equipment; the other focuses on the nuclear sector.
"American Science and Engineering (NASDAQ: ASEI) develops, manufactures, markets, and sells X-ray inspection and other inspection solutions for homeland security and other targeted markets.
"The company makess sophisticated X-ray inspection products that can be used to inspect parcels, baggage, vehicles, pallets, cargo containers, and people.
"AS&E’s products are used to help combat terrorism, trade fraud, drug trafficking, weapons smuggling, and illegal immigration. They are also used for military force protection and general facility security.
"The company’s X-ray imaging products utilize several technologies including traditional transmission X-ray technology, proprietary Z Backscatter technology, Shaped Energy technology and Radioactive Threat Detection (RTD).
"In the company’s latest reported third quarter, sales increased approximately 53% to $65.3 million from $42.6 million in the third quarter of last year.
"American Science and Engineering reported earnings per share of $.1.13 in the latest reported third quarter versus $.43 in the same quarter of last year. We note that clients of Oberweis Asset Management own approximately 45,000 shares.
"GSE Systems (NYSE: GVP) designs and develops real-time simulation and training solutions for the nuclear and fossil fuel power as well as chemical process industries.
"The nuclear industry mandates the use of highly accurate simulators for both new nuclear plants and upgrades to existing plants, and a renewed global interest in nuclear power is helping to drive demand.
"GVP recently announced several contract wins and is currently working on 8 new full scope nuclear power plant simulators.
"For fossil fuel plants, simulators are not mandated by law but are viewed as a cost effective way to train operators and maximize efficiency of an existing plant. Approximately 40% of 2008 revenues came from non-nuclear simulation.
"In the company’s latest reported fourth quarter, sales increased approximately 3% to $8.4 million from $8.1 million in the fourth quarter of last year. GSE Systems reported approximately breakeven earnings per share in the latest reported fourth quarter versus $.03 in the same quarter of last year.
"Please note, when viewing the growth on a year over year basis, the year-ago fourth quarter benefited from approximately $1.8 million in revenues from a single sizable contract with the United Arab Emirates that has since been completed.
"Revenue growth in this most recent quarter increased approximately 33% versus the fourth quarter of last year excluding this contract.
"In addition, reported backlog at the end of the fourth quarter grew 54% versus the year-ago fourth quarter. Clients of Oberweis Asset Management own approximately 550,000 shares."
Hot prospects for Chile (ECH)
Two advisors, both with outstanding long-term records, see upside opportunity in iShares MSCI Chile (NYSE: ECH).
Here, Mark Salzinger, editor of The Investor's ETF Report, and Nicholas Vardy, editor of The Global Bull Market Alert, assess the prospects of the South American exchange-traded fund.
Salzinger explains, "Through the first three months of 2009, ECH was the best-performing equity ETF, up 15.8%; it should continue to produce strong relative performance.
"Though the Chile ETF doesn’t ever make much news or attract much investor attention, iShares MSCI Chile is ignored unjustly. Resource-rich, politically stable and increasingly prosperous, Chile is an attractive play on commodities and growing wealth in emerging markets.
"Copper drives the economy in Chile. The national copper company, Codelco, controls more than 20% of the world’s copper reserves. The needful industrial metal has made China the destination for 14% of Chile’s exports, the largest of any country (followed by the U.S. and Japan).
"Public debt is only 4% of Chile’s GDP, and its sovereign wealth fund tops $20 billion. Chile’s $4-billion economic stimulus, though small in relative terms, is one of the most robust in emerging markets as a percentage of GDP (about 3%).
"In addition, Chile boasts more bilateral free-trade agreements than any other country in the world, including with such economically significant players as the U.S., the European Union, China, Japan, Canada and South Korea."
Nicholas Vardy suggests, "Chile’s fundamentals make the economic ne’er-do-wells of the world green with envy. During the commodity boom of 2002-2007, Chile’s conservative economic policies were criticized for stifling growth.
"But thanks to its fiscal prudence, its lack of a domestic housing bubble, and its sizeable wealth reserves, Chile has weathered the current global economic meltdown better than most countries.
"While other Central and South American countries spent the bulk of the massive inflow of wealth to the region during the commodities boom, Chile built up a $$19.5 billion 'stabilization fund.' This large cash reserve meant policy makers were never forced to search for financing in a difficult market.
"Second, a bet on Chile is a highly leveraged bet on any upturn in the global economy. As the world’s largest producer and exporter of copper, Chile relies on exports for 43% of its GDP.
"Third, the Chilean ETF bottomed on Dec. 5 -- and has been on a more or less steady, upward path ever since. And just recently, it crossed its 200-day average -- perhaps the only emerging stock market in the world that is trading above this key technical level."
Johnson Controls, Inc. (JCI)
Johnson Controls (<a href=http://www.zacks.com/stock/quote/jci>JCI</a>) is suffering from a weakness in its North American business, high inventory levels at the OEMs, weakening product mix, and raw material/ price squeeze. Rapid deterioration in automotive production coupled with worsening residential market raise concern. <p> As foreseen, Johnson reported losses in the second quarter of fiscal 2009. The company expects a return to profitability in the second half of fiscal 2009. These lead us to rate the stock a Sell with a target of $12.00. <p> Currently, Johnson Controls shares are trading at approximately 15.8x our 2010 estimate of $1.11. Our target price is 10.8x our 2010 EPS estimate.Gafisa S.A. (GFA)
We are reiterating our Buy recommendation on Gafisa S.A. (<a href=http://www.zacks.com/stock/quote/gfa>GFA</a>). We have been encouraged by the stimulus package and the new value-added tax relief recently announced by the Brazilian government. <p> Fourth quarter 2008 results were lower than expected, which is a clear indication that the international crisis has reached Brazil's construction sector. The recent acquisition of Tenda will enhance the company's presence in the low-income segment, which will be the focus of the Brazilian government. Thus, we expect Gafisa to benefit from the announced program in the following quarters. <p> Currently, Gafisa is trading at 7.7x 2009 revised EPS estimate. We reiterate our Buy recommendation on Gafisa, with a target price of US$16.25, representing a valuation between 9x and 10x our 2009 P/E, closer to the Bovespa benchmark for Brazilian stocks.Biotech Industry
The major indices declined as much as 40% while the NASDAQ Biotech Index declined only 12.6% and the AMEX Biotech Index was down 17.7%. We like MYGN, ONXX and AMAG.Generational Equity Announces Sale of Spirit Express Trucking Inc.
DALLAS, TX--(Marketwire - April 29, 2009) - Generational Equity, an advisor to privately held and family-owned businesses for mergers, acquisitions, and strategic growth initiatives, announced the sale of its client, Spirit Express Trucking Inc., of Denver, Colo., to R+L Carriers Inc., a trucking firm based in Wilmington, Ohio.
Stephen Crisham, Managing Director, David Lewis and others on his Generational Equity team were there to help both buyer and seller express their expectations clearly and to bring about a mutually satisfactory agreement. Lewis said he believed from the outset that the companies were a good fit and that the challenge was to help them understand each other's position.
LLR Partners to Acquire I-many
PHILADELPHIA, PA and EDISON, NJ--(Marketwire - April 29, 2009) - LLR Partners, one of the
Mid-Atlantic's largest private equity investment firms, with more than $1.4
billion under management, and I-many, Inc. (
Vault Technology Withdraws Letter of Intent to Acquire Presentation Concepts Corporation
FORT LAUDERDALE, FL--(Marketwire - April 29, 2009) - Vault Technology, Inc. (
"When we commenced our conversations with PCC last year, we did not expect the market drop or the freezing of the equity markets. It's no secret that the current market conditions are extremely tough for obtaining financing for projects like ours," said Nick Arroyo, President and CEO of Vault Technology. "We wish Joe Musumeci and the PCC team continued success," added Arroyo.
Expesite Acquires Report Hawk to Seize New Market Opportunities
COLUMBUS, OH--(Marketwire - April 29, 2009) - Expesite, an industry leader in providing online program management solutions to the retail real estate and construction industry, has today announced the acquisition of Report Hawk, a leader in project management and reporting solutions that serve the contractor, subcontractor and construction vendor markets. Expesite's acquisition of Report Hawk has positioned the company to gain share in a construction / real estate market that includes an estimated 800,000 general and specialty trade contractors -- as well as nearly 130,000 architects. By vertically integrating the two SaaS (Software as a Service) offerings, Expesite's solutions portfolio now spans from the largest retail owners to the smallest vendors/contractors -- and everything in between.