Earnings updates
It's a very busy earnings week for me, and as luck would have it I'll be traveling for a week or so and won't be able to post for a while. Here are my quick thoughts on the companies that have reported recently:
Taser (TASR) this morning finally finished filling in and sealing over the hole they had dug for themselves over the past year or so. They are now building sales again, and you can practically taste the market's relief. Lawsuits are becoming a non-issue since Taser is handily winning all of them or having them summarily dismissed, but that's not enough to boost the shares -- what they ne
ed is a return to significant sales growth. It seems to finally be starting, so even though they missed estimates slightly the shares are rallying a bit on 30% sales gains and hopes for a return to TASR's perch as a fast-growing company with a monopoly on its core products. I've been patient with Taser even though it's well underwater for me, and I plan to continue to patiently watch as it returns to sales growth, hopefully some earnings growth, and a recovery of the stock's valuation.
Keppel Land was a little bit light on earnings yesterday, which brought the shares down and depressed parent Keppel Corporation (KPELY) , which I own, a bit as well. I just bought these KepCorp shares at pretty much their recent highs, and I knew it was earnings season so I was taking a risk ... the real news for Keppel, however, will come with tomorrow's release of earnings for the parent company and any updates to their guidance about yard expansion, size of the order book, or other commentary on the great market they're seeing for their deepsea drilling rigs. Could move either way on these earnings tomorrow, but in the long run I expect the shares to do very well even though they're not in the bargain bin.
Rayonier (RYN) reported earlier this week, and a quick look at the numbers made shareholders very nervous. Nothing to worry that much about, earnings were down fairly dramatically due to the timing of some land sales (they're not selling as much wholesale land now, they're trying to move up the development chain and get more value, which is taking more time), and to some other seasonal weakness in the business. RYN's earnings have never been all that consistent, but in the long term I'm happy to have a strong position in my portfolio in Rayonier as it represents investments in land and timber which should remain a good diversifier for me.
Radyne Corporation (RADN), which I bought about a year ago as Radyne Comstream, reported continued earnings growth as well -- I have some nervousness about holding this one because it has grown so fast, but I have to remind myself of what a bargain it was when I initially picked up shares. The Xicom merger is clearly working very well -- it might have nibbled at their margins a little, but sales and earnings growth have been very good, they're getting paid (receivables are dropping), and their order book has grown dramatically so they have a very solid backlog to supply. I'll be watching RADN to see if there's any weakness or overvaluation that might make me want to lighten my holdings a little, but I don't see that yet -- and even after this big merger and a year of torrid growth this is still a tiny $300 million company with a lot of room to grow its presence in the satellite telecom business.
And Gol Linhas Aereas Inteligentes (GOL) released earnings a couple days ago, too -- they beat the estimates of the Street by a little bit, though it didn't really impact the share price since expectations had been steadily gaining. The big impact of Varig's problems probably won't show on their earnings for a quarter or two, assuming they continue to gain market share as I expect, but they are still showing good steady growth in income, cost cutting, route expansion (just opened up to Chile), and they're getting more attention from US investors. GOL continues to look like a great long term story to me, though I wouldn't be surprised to see them temporarily lose altitude at some point after the remarkable six months they've had.
Akamai(AKAM) , Formfactor(FORM) , and MEMC Electronic Materials (WFR) are all reporting today, and Intuitive Surgical (ISRG) tomorrow -- all very strong performers over the past year with gains of well over 100% (though not all have gained quite that much for me, I bought ISRG fairly high). These companies have pretty huge expectations built in, but it seems to me that their markets are booming and they should have no trouble meeting those high expectations, or at least coming close. All still look like long term winners to me, though I am a little concerned about valuation with Akamai and, to a lesser degree, Formfactor. Not enough to sell out yet, but I will be looking closely at their results to see if I'm still willing to be that their growth is going to continue at these rapid rates.
Taser (TASR) this morning finally finished filling in and sealing over the hole they had dug for themselves over the past year or so. They are now building sales again, and you can practically taste the market's relief. Lawsuits are becoming a non-issue since Taser is handily winning all of them or having them summarily dismissed, but that's not enough to boost the shares -- what they ne
Keppel Land was a little bit light on earnings yesterday, which brought the shares down and depressed parent Keppel Corporation (KPELY) , which I own, a bit as well. I just bought these KepCorp shares at pretty much their recent highs, and I knew it was earnings season so I was taking a risk ... the real news for Keppel, however, will come with tomorrow's release of earnings for the parent company and any updates to their guidance about yard expansion, size of the order book, or other commentary on the great market they're seeing for their deepsea drilling rigs. Could move either way on these earnings tomorrow, but in the long run I expect the shares to do very well even though they're not in the bargain bin.
Rayonier (RYN) reported earlier this week, and a quick look at the numbers made shareholders very nervous. Nothing to worry that much about, earnings were down fairly dramatically due to the timing of some land sales (they're not selling as much wholesale land now, they're trying to move up the development chain and get more value, which is taking more time), and to some other seasonal weakness in the business. RYN's earnings have never been all that consistent, but in the long term I'm happy to have a strong position in my portfolio in Rayonier as it represents investments in land and timber which should remain a good diversifier for me.
Radyne Corporation (RADN), which I bought about a year ago as Radyne Comstream, reported continued earnings growth as well -- I have some nervousness about holding this one because it has grown so fast, but I have to remind myself of what a bargain it was when I initially picked up shares. The Xicom merger is clearly working very well -- it might have nibbled at their margins a little, but sales and earnings growth have been very good, they're getting paid (receivables are dropping), and their order book has grown dramatically so they have a very solid backlog to supply. I'll be watching RADN to see if there's any weakness or overvaluation that might make me want to lighten my holdings a little, but I don't see that yet -- and even after this big merger and a year of torrid growth this is still a tiny $300 million company with a lot of room to grow its presence in the satellite telecom business.
And Gol Linhas Aereas Inteligentes (GOL) released earnings a couple days ago, too -- they beat the estimates of the Street by a little bit, though it didn't really impact the share price since expectations had been steadily gaining. The big impact of Varig's problems probably won't show on their earnings for a quarter or two, assuming they continue to gain market share as I expect, but they are still showing good steady growth in income, cost cutting, route expansion (just opened up to Chile), and they're getting more attention from US investors. GOL continues to look like a great long term story to me, though I wouldn't be surprised to see them temporarily lose altitude at some point after the remarkable six months they've had.
Akamai(AKAM) , Formfactor(FORM) , and MEMC Electronic Materials (WFR) are all reporting today, and Intuitive Surgical (ISRG) tomorrow -- all very strong performers over the past year with gains of well over 100% (though not all have gained quite that much for me, I bought ISRG fairly high). These companies have pretty huge expectations built in, but it seems to me that their markets are booming and they should have no trouble meeting those high expectations, or at least coming close. All still look like long term winners to me, though I am a little concerned about valuation with Akamai and, to a lesser degree, Formfactor. Not enough to sell out yet, but I will be looking closely at their results to see if I'm still willing to be that their growth is going to continue at these rapid rates.
This article posted by One Guy @ 4/26/2006 11:07:00 AM 0 comments
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