What to look for -- ISRG, CVTX, AKAM, etc.
This is my busiest week for earnings announcements from my portfolio companies -- we've already heard from a few of the biggies: GOOG's blockbuster, RYN's solid progress, RADN's spectacular growth and FORM's great news on their new factory, and CD's disappointing earnings and silly split plan. So far, mostly so good.
But today and tomorrow I've got a few companies I'm keeping an eye on. Cendant I have already decided to sell in the near future and I have a little cash sitting idle, so I hope to see something soon that gives me an indication of where I should put that money. Among the companies I already own, we'll see news from CVTX, VRTX, WFR, ISRG, AKAM, MYGN and TASR either today or tomorrow, and several of those are potential new spots for new money.
It has been a crazy market lately, but I can't let that influence me too much. I don't know how to discount Ben Bernanke, or interest rates, or oil prices or the Bush scandals and their effect on the market. I am definitely not going to do a better job than the professionals at analyzing those macro issues, so I won't try. I'm looking for company earnings, and, more importantly for some of these stocks, news about business developments, progress, and projections.
So here's what I'm looking for:
CV Therapeutics (CVTX) -- obviously, earnings don't mean much for these guys just yet. I'll be reading and listening for news about Aceon's progress, and about Regadenosan and Ranexa -- sales for Aceon will give us a good idea of the effectiveness (very early on) of their sales force, and progress toward approval and/or label expansion for the other two is going to really drive CV in the long term. Ranexa is a potential blockbuster, and I have a little theory that the market is ripening for it. Sometime before the end of the year we should have some trial results from Regadenosan, but not necessarily with the earnings.
Vertex Pharma (VRTX) -- I'm not looking for a lot from Vertex's earnings announcement. I'm not aware of any particular news that's expected for release, though it's always interesting to see how their smaller and older drugs are bringing in increasing cash flows. The real news will be if they have anything new to say on their ongoing early-stage trials for 950, 702, and 965, and I'm not sure that they'll have anything new to say yet on those.
Akamai (AKAM) -- for Akamai, it's been steady as she goes lately. They've had a good jump up recently on solid growth and I certainly expect that to continue. With the Speedera acquisition still being digested I'll mostly be looking for customer growth, margin maintenance (the Speedera customers came with lower margins, for the most part), and any other news about how they will continue to grow as a combined company moving forward. They've had some interesting press releases lately about new customer acquisitions, and I've been hearing radio ads from them for the first time, which is interesting. I don't have any particularly strong expectations but expect them to continue to do well. If there is a blip with the integration of Speedera or just a ho-hum release, I'll hope for a "sell on the news" price break for a possible purchase.
Intuitive Surgical (ISRG) -- ISRG has really got me intrigued now. I just bought my first position a little while ago (writeup of that here), and I think this business has the potential to be absolutely spectactular as the installed base grows, patients come to expect and prefer robotically assisted surgery, and ISRG gradually expands the range of surgeries that can be more safely, profitably, or effectively done with their Da Vinci robots. But this has been a wild ride up over the past year, and their earnings should be extremely lumpy due to the fact that they currently get a lot of their revenue from a relatively small number of sales each quarter of these extremely expensive robots. I have to think that one of these quarters (maybe this one, maybe not), they're going to quite naturally report that they only sold half as many machines as they did the quarter before. When that happens, I'd expect a precipitous drop in the stock price and a great opportunity for me to buy more.
But that might not happen for a year or more -- and I'm not sure how patient I want to be with a stock that has this kind of growth. If they've already doubled again before the next time they have a bad earnings report, a dip wouldn't be so helpful. So I'll be looking at their earnings release carefully and gauging the market's reaction. If they're still plugging along but maybe didn't grow as fast as they have in the past and the market overreacts, I'll be very tempted to buy more. The two keys with ISRG remain the new installations, and the revenue growth from sales and service -- which is closely tied to the number of installed machines and trained doctors and the number of surgeries performed. It's the potential lumpiness of the new installation numbers that I'm hoping will give us a new buying opportunity.
And finally, MEMC Electronic Materials (WFR) -- WFR has been up and down a bit over the last month or so -- I wrote up some musings recently -- but I expect solid earnings from them this time around, if not spectacular surprises. The semiconductor industry, according to the releases from Intel, FORM and, today, Texas Instruments, among others, is doing just fine. The major problems at TI seemed to stem from problems underestimating demand, and volume of semiconductor production still seems to be growing quite well. I'll be looking and listening to see how WFR sees the market moving over the coming year, and to see whether the capacity constraints that TI and Intel and many of the other manufacturers have complained about recent are causing WFR to have any problems moving their inventory.
Those are the main ones I'm looking at today and tomorrow -- I can't imagine buying more Taser right now even if the price does seem quite reasonable. I'll hold my little portion that has shrunk precipitously, but only because I believe in the long term potential of the product. Management has me a bit turned off, which is always a red light, and the SEC investigation worries me.
And later this week, we'll have a chance to hear from Patrick Byrne again on the Overstock (OSTK) conference call -- that's always fun, and I really do think Overstock will again take off some day once their IT problems and the short-sellers lawsuit are put behind them. Maybe this week? That's probably a bit optimistic, but I'm looking for a great holiday quarter from them.
But today and tomorrow I've got a few companies I'm keeping an eye on. Cendant I have already decided to sell in the near future and I have a little cash sitting idle, so I hope to see something soon that gives me an indication of where I should put that money. Among the companies I already own, we'll see news from CVTX, VRTX, WFR, ISRG, AKAM, MYGN and TASR either today or tomorrow, and several of those are potential new spots for new money.
It has been a crazy market lately, but I can't let that influence me too much. I don't know how to discount Ben Bernanke, or interest rates, or oil prices or the Bush scandals and their effect on the market. I am definitely not going to do a better job than the professionals at analyzing those macro issues, so I won't try. I'm looking for company earnings, and, more importantly for some of these stocks, news about business developments, progress, and projections.
So here's what I'm looking for:
CV Therapeutics (CVTX) -- obviously, earnings don't mean much for these guys just yet. I'll be reading and listening for news about Aceon's progress, and about Regadenosan and Ranexa -- sales for Aceon will give us a good idea of the effectiveness (very early on) of their sales force, and progress toward approval and/or label expansion for the other two is going to really drive CV in the long term. Ranexa is a potential blockbuster, and I have a little theory that the market is ripening for it. Sometime before the end of the year we should have some trial results from Regadenosan, but not necessarily with the earnings.
Vertex Pharma (VRTX) -- I'm not looking for a lot from Vertex's earnings announcement. I'm not aware of any particular news that's expected for release, though it's always interesting to see how their smaller and older drugs are bringing in increasing cash flows. The real news will be if they have anything new to say on their ongoing early-stage trials for 950, 702, and 965, and I'm not sure that they'll have anything new to say yet on those.
Akamai (AKAM) -- for Akamai, it's been steady as she goes lately. They've had a good jump up recently on solid growth and I certainly expect that to continue. With the Speedera acquisition still being digested I'll mostly be looking for customer growth, margin maintenance (the Speedera customers came with lower margins, for the most part), and any other news about how they will continue to grow as a combined company moving forward. They've had some interesting press releases lately about new customer acquisitions, and I've been hearing radio ads from them for the first time, which is interesting. I don't have any particularly strong expectations but expect them to continue to do well. If there is a blip with the integration of Speedera or just a ho-hum release, I'll hope for a "sell on the news" price break for a possible purchase.
Intuitive Surgical (ISRG) -- ISRG has really got me intrigued now. I just bought my first position a little while ago (writeup of that here), and I think this business has the potential to be absolutely spectactular as the installed base grows, patients come to expect and prefer robotically assisted surgery, and ISRG gradually expands the range of surgeries that can be more safely, profitably, or effectively done with their Da Vinci robots. But this has been a wild ride up over the past year, and their earnings should be extremely lumpy due to the fact that they currently get a lot of their revenue from a relatively small number of sales each quarter of these extremely expensive robots. I have to think that one of these quarters (maybe this one, maybe not), they're going to quite naturally report that they only sold half as many machines as they did the quarter before. When that happens, I'd expect a precipitous drop in the stock price and a great opportunity for me to buy more.
But that might not happen for a year or more -- and I'm not sure how patient I want to be with a stock that has this kind of growth. If they've already doubled again before the next time they have a bad earnings report, a dip wouldn't be so helpful. So I'll be looking at their earnings release carefully and gauging the market's reaction. If they're still plugging along but maybe didn't grow as fast as they have in the past and the market overreacts, I'll be very tempted to buy more. The two keys with ISRG remain the new installations, and the revenue growth from sales and service -- which is closely tied to the number of installed machines and trained doctors and the number of surgeries performed. It's the potential lumpiness of the new installation numbers that I'm hoping will give us a new buying opportunity.
And finally, MEMC Electronic Materials (WFR) -- WFR has been up and down a bit over the last month or so -- I wrote up some musings recently -- but I expect solid earnings from them this time around, if not spectacular surprises. The semiconductor industry, according to the releases from Intel, FORM and, today, Texas Instruments, among others, is doing just fine. The major problems at TI seemed to stem from problems underestimating demand, and volume of semiconductor production still seems to be growing quite well. I'll be looking and listening to see how WFR sees the market moving over the coming year, and to see whether the capacity constraints that TI and Intel and many of the other manufacturers have complained about recent are causing WFR to have any problems moving their inventory.
Those are the main ones I'm looking at today and tomorrow -- I can't imagine buying more Taser right now even if the price does seem quite reasonable. I'll hold my little portion that has shrunk precipitously, but only because I believe in the long term potential of the product. Management has me a bit turned off, which is always a red light, and the SEC investigation worries me.
And later this week, we'll have a chance to hear from Patrick Byrne again on the Overstock (OSTK) conference call -- that's always fun, and I really do think Overstock will again take off some day once their IT problems and the short-sellers lawsuit are put behind them. Maybe this week? That's probably a bit optimistic, but I'm looking for a great holiday quarter from them.
This article posted by One Guy @ 10/25/2005 12:45:00 PM 2 comments
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