Featuring: IBM denied injunction against exec; ACN’s Q3 results, Barron outlook; SMSC’s Q1 loss; MED’s market position; RTK’s jet fuel technology; and APOL expected to beat analyst estimates.
International Business Machines Corp. (NYSE: IBM), Accenture (NYSE: ACN), Standard Microsystems (Nasdaq: SMSC), Medifast Inc. (NYSE: MED), Rentech Inc. (AMEX: RTK) and Apollo Group Inc. (Nasdaq: APOL).
International Business Machines Corp. (NYSE: IBM) Stock Alert – IBM Injunction against Former M&A Exec’s Move to Dell Denied
International Business Machines Corp. (NYSE: IBM) was recently denied an injunction to stop its former mergers and acquisitions chief from working for rival Dell Inc. (Nasdaq: DELL), reported The Associate Press.
Preliminary injunction against the former IBM executive David Johnson was denied by a federal judge, while another IBM lawsuit against Johnson makes its way through the courts.
IBM brought suit against Johnson alleging he broke a non-compete agreement when he agreed to work for Dell, taking with him trade secrets that may help Dell and hurt IBM.
Johnson had been with IBM for 27 years and disputes the company’s contentions that he possesses meaningful trade secrets, while also claiming IBM exaggerates its complaint against him.
The case brought against Johnson, personally, continues, however, after judge Stephen Robinson of U.S. District Court for the Southern District of New York wrote that IBM raised pertinent questions regarding the circumstances of Johnson’s move to Dell.
IBM also claims Johnson acted irresponsible with the company’s resources when he started a venture capital firm.
Dell declined to comment to The Associated Press. IBM intends to appeal the decision in the Dell case.
IBM is an information technology (IT) company. The company’s major operations include Global Technology Services segment (GTS), Global Business Services segment (GBS), Software segment, Systems and Technology segment, and Global Financing segment.
In its recent chart, IBM is trading at its lower Bollinger Bands range, a bearish condition signaling that the stock is weak relative to the recent price action. MACD reflects a bearish signal, with the indicator trending below its 9-day moving average signal line, indicating downwardly trending moving averages.
Accenture (NYSE: ACN) Stock Alert – Accenture Shares Look Attractive Says Barron’s
Accenture (NYSE: ACN) is expected to get a boost in shares traded Monday due to an online article by Barron’s this past weekend which stated a case for buying the technology outsourcing and consulting company, Reuters reported.
Accenture’s third-quarter earnings report showed a drop in profits as the global recession deepened, but beat Wall Street’s estimates for the quarter.
The company also raised its fourth-quarter guidance, saying its customers have reinstated plans previously put on hold during the height of the financial turmoil.
New bookings dropped 3% in the quarter from the same quarter last year, but the company cited a strong dollar conversion rate accounted for the decline in new business.
Barron’s said the company isn’t strapped with debt, generates 8.4% in free cash flow, and enjoys a strong name-recognition presence in the marketplace.
Barron’s also pointed out that Accenture shares appear cheap at only 12.2 times projected 2010 earnings, compared with the industry average of 15.9 times anticipated earnings for the IT consulting and services sector.
“Because Accenture continues to trade toward a trough multiple, we believe now is the time to buy shares,” the report quoted Susquehanna analyst James Friedman as saying.
Friedman was also quoted in the article that he believes Accenture may increase its annual dividend this summer from the current dividend of 50 cents.
Accenture is a management consulting, technology services and outsourcing organization.
The company’s business is structured around five operating groups, which together comprise 17 industry groups serving clients. The operating groups of the company are Communications & High Tech, Financial Services, Products, Public Service and Resources.
In its recent chart, ACN is trading at its higher Bollinger Bands range, a bullish condition signaling that the stock is strong relative to the recent price action. MACD reflects a bullish signal, with the indicator trending above its 9-day moving average signal line, indicating upwardly trending moving averages.
Standard Microsystems (Nasdaq: SMSC) Stock Alert – Standard Microsystems Reports Loss on Lower Revenue
Standard Microsystems (Nasdaq: SMSC) recently reported a first-quarter loss, affected by lower sales and one-time write-offs. The Hauppauge N.Y.-based chip maker said it lost $9.2 million, or 42 cents per share, compared with a reported profit of $4.5 million, or 20 cents per share, for the equivalent quarter last year.
Excluding special items, including a settlement charge, the company lost 15 cents per share in the most recent quarter.
Revenue dropped 33% to $62.5 million from $92.8 million for the same period last year.
“We are encouraged by continued signs of health in the PC market, with increasing end customer demand for both commercial and low-end PCs,” said Christine King, president and CEO, in a prepared statement.
She continued to say the company is “seeing promising indicators that the semiconductor market will deliver more normal seasonal patterns” in the second half of the year.
Company guidance includes adjusted earnings to reach between break-even and a profit of 8 cents per share for the second quarter on revenue of between $68 million and $72 million.
Looking ahead, the company adjusted earnings are expected to reach between break-even and a profit of 8 cents per share. The revenue forecast range is $68 million to $72 million.
Standard Microsystems designs and sells a variety of silicon-based integrated circuits that are primarily utilizing analog or mixed-signal technologies. Its integrated circuits and systems provide a variety of signal processing attributes that are incorporated by its customers into end products in the consumer electronics and infotainment, the mobile and desktop personal computer, and industrial markets.
These products generally provide connectivity, networking or input/output control solutions for a variety of communication, computer and related peripheral, consumer electronics, industrial control system, or automotive information applications. It has four principal product types: computing and connectivity products, analog products, mobile products, and automotive information products.
SMSC has operations in the United States, Germany, Japan, China, Korea, Singapore and Taiwan. Major engineering design centers are located in Arizona, New York, Texas and Germany.
In its recent chart, SMSC is trading above its higher Bollinger Bands range, a bullish condition signaling that the stock is strong relative to the recent price action. MACD reflects a bearish signal, with the indicator trending below its 9-day moving average signal line, indicating downwardly trending moving averages.
Medifast Inc. (NYSE: MED) Stock Alert – Medifast Outperforms S&P500 Since March Lows
Since the March 9 closing low of 676.53, the S&P500 has risen 35.8%, settling on last week at 918.90, while Medifast Inc. (NYSE: MED) has risen more than 140% from its March 9 low of $4.42 to close Friday at $10.60, outperforming the S&P500 by nearly a 4 to 1 margin.
Medifast is engaged in the production, distribution, and sale of weight management and disease management products and other consumable health and diet products.
The company’s product lines include weight and disease management, meal replacement, and vitamins primarily manufactured in its modern, the United States Food and Drug Administration (FDA) approved facility in Owings Mills, Maryland.
The company’s operations are primarily conducted through five of its wholly owned subsidiaries, Jason Pharmaceuticals, Inc. (Jason), Take Shape for Life, Inc. (TSF), Jason Enterprises Inc., Jason Properties LLC and Seven Crondall LLC.
The company offers a variety of weight and disease management products under the Medifast brand and for select private label customers. It’s distribution channels include Medifast Direct, Take Shape for Life, Medifast Weight Control Centers and Medifast Physicians.
In its recent chart, MED is trading at its higher Bollinger Bands range, a bullish condition signaling that the stock is strong relative to the recent price action. MACD reflects a bullish signal, with the indicator trending above its 9-day moving average signal line, indicating upwardly trending moving averages.
Rentech Inc. (AMEX: RTK) Stock Alert – Rentech announces Milestone in Synthetic Jet Fuel Certification
Rentech Inc. (AMEX: RTK) said the aviation fuels subcommittee of ASTM International passed specifications for synthetic jet fuel for commercial aviation use, the company recently said in a news release. The passage of the specifications enables the use of fuels from the Fischer-Topsch process, including Rentech’s RenJet® synthetic jet fuel.
“The achievement of this landmark passage of the first non-petroleum derived jet fuel by the ASTM could not have been achieved without Rentech’s participation and leadership,” Richard Altman, executive director of the Commercial Aviation Alternative Fuels Initiative (CAAFI), stated. “Rentech supplied guidance, data and its jet fuel during the development of the specifications process for synthetic jet fuel. We look forward to the full committee’s approval of synthetic jet fuel this fall.”
Rentech develops technologies and projects that transforms under-utilized energy resources into an alternative fuel and chemicals.
The Rentech Process, based on Fischer-Tropsch (FT) chemistry, is a technology that converts synthesis gas (syngas), which can be manufactured from a variety of waste, biomass and fossil resources, into hydrocarbons. These hydrocarbons can be processed and upgraded into ultra-clean synthetic fuels, such as military and commercial jet fuels and ultra low sulphur diesel, as well as specialty waxes and chemicals.
The company also owns an operating natural gas-based nitrogen fertilizer manufacturing plant in Illinois.
In its recent chart, RTK is trading below its lower Bollinger Bands range, a bearish condition signaling that the stock is weak relative to the recent price action. MACD reflects a bearish signal, with the indicator trending below its 9-day moving average signal line, indicating downwardly trending moving averages.
Apollo Group Inc. (Nasdaq: APOL) Stock Alert – Apollo Group Expected to Meet or Beat Wall Street Estimates
Apollo Group Inc. (Nasdaq: APOL) is expected to post earnings inline or exceeding Wall Street’s analysts through increased demand for schooling and an increase in better degrees typically sought by scared and idle workers during recessions.
Third-quarter earnings might reflect a peak in earnings as signs of an economic recovery may be seen on the horizon.
“Enrollments will still be strong but this will probably be the best quarter. It will slow down after but not like falling off a cliff,” BMO Capital analyst Jeffrey Silber said.
As economists point to signs of future growth starting as early as the fourth quarter, analysts anticipate this growth will not bode well for education companies.
“We believe that most investors expect Apollo to meet or exceed (third-quarter) consensus estimates given favorable economic conditions for the company, but remain skittish regarding the company’s ability to execute as the economy improves,” analyst Ariel Sokol for Wedbush said in a note to clients.
The mean analysts’ estimate polled by Thomson Reuters is for Apollo Group to earn $1.12 per share (excluding items) on revenue of $1.04 billion.
Although enrollments have outpaced estimates, analysts expect the earnings streak will peak in the third quarter.
BMO’s Silber anticipates a 20.5% increase in enrollment growth for the third quarter and 17.3% for the fourth quarter. Enrollments for new degrees are anticipated to jump approximately 20.5% for the third quarter and fall approximately 13.8% for the fourth quarter.
Apollo recently agreed to buy Britain-based BPP Holdings Plc as part of its strategy to expand operations overseas.
“As the company invests overseas, it helps to diminish a medium-term risk surrounding potential saturation of its core markets and ensures that this rate of growth can continue on a sustained basis,” Signal Hill’s Urdan said.
“I think we are in good buying points for Apollo and most of the companies in the group right now, for longer-term oriented investors,” Barrington’s Paris said.
Apollo is a private education provider. The company offers educational programs and services at the high school, undergraduate and graduate levels online and on-campus through its wholly owned subsidiaries, The University of Phoenix Inc., Institute for Professional Development (IPD), The College for Financial Planning Institutes Corporation (CFP), Western International University, Inc. (Western International University), and Insight Schools, Inc. (Insight Schools), and through its 80.1% owned subsidiary, Apollo Global, Inc. (Apollo Global).
The company has also established a Canadian institution, Meritus University (Meritus), which began operations in September 2008.
In its recent chart, APOL is trading above its higher Bollinger Bands range, a bullish condition signaling that the stock is strong relative to the recent price action. MACD reflects a bullish signal, with the indicator trending above its 9-day moving average signal line, indicating upwardly trending moving averages.
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