Archive for January, 2008

Silicom Reports Nice Q4 2007 Results

By: ispeculatornew | Date posted: 01.28.2008 (8:52 pm)

SILC – Silicom Limited (Nasdaq) – (Closing Price – $13.92) 

Silicom Limited announced fourth quarter results today and reported increases in revenue and EPS. The share price responded with a gain over 17%.

Silicom reported revenue of 7.48 million which was a 13% improvement over last quarter and a 49% improvement over the comparable quarter last year. EPS came in at $0.27 which was also an improvement sequentially ($0.25) and YOY ($0.20).

Even with today’s gain of 17% Silicom Limited is trading at a trailing PE of 14. That is very cheap considering the growth Silicom Limited has experienced over the last couple of years. The WAN optimization sector is projected to show strong growth for the next few years which will benefit Silicom Limited in future quarters.

The stock price of Silicom Limited is trading very near my initial recommendation and I still think the company is a good buying opportunity. I would recommend that you continue to hold your shares or even accumulate some more.

Disclaimer: I have no position in SILC.

New Stock Pick: 8×8 Inc. (EGHT)

By: ispeculatornew | Date posted: 01.27.2008 (1:33 pm)

EGHT – 8×8 Inc. (Nasdaq) – (Closing Price on Friday 1/25/08 – $1.20) 

8×8 Inc. is a company I have been following for a few quarters and I think now is an opportune time to buy some shares.

8×8 Inc. is a VoIP company that enables broadband internet users to add digital voice and video communications to their high speed internet connections. The company also offers a hosted communications solution, Packet8 Virtual Office, which delivers digital voice services coupled with powerful features for small and medium sized businesses and call centers.

The amount of companies subscribing to Packet8 Virtual Office has been quickly growing over the past year. On January 8 of 2007, 8×8 Inc. reported over 6,000 companies subscribed to Packet8 Virtual Office and earlier this year 8×8 Inc. reported over 10,000 companies were using Packet8 Virtual Office.

8×8 Inc. also got an influx of residential customers last year when a couple of other VoIP companies (SunRocket and an unnamed company) went out of business and referred their customers to 8×8 Inc. (more…)

Prince of Wall Street

By: ispeculatornew | Date posted: 01.26.2008 (3:25 pm)

The Prince of Wall Street is an informative stock blog that focuses on value investing. The blog also mixes in commentary, Wall Street gossip, and adds some humor to its posts. The Prince of Wall Street is one of the better looking stock blogs that I have come across and it is definitely worth checking out.

Some recent posts that I found interesting are Technical Trading is Bogus, Here’s Why (a sentiment I share), Platinum Equity’s Purchase of Covad (which gives a more in depth analysis of the DVW deal I mentioned a month ago), and Money Never Sleeps Pal (which reports a sequel to the movie Wall Street is coming out).

I would like to thank Prince of Wall Street for adding my site to its favorite sites for 2008.

Sunpower Corporation Cover Recommendation

By: ispeculatornew | Date posted: 01.24.2008 (11:13 pm)

SPWR – Sunpower Corporation (Nasdaq) – (Closing Price – $69.21)

Sunpower Corporation (SPWR) announced their fourth quarter 2007 earnings today and reported disappointing results.

Sunpower reported revenue of 224.3 million and GAAP earnings of 0.06 per share. Revenue and EPS were both down from the prior quarter’s results of revenue of 234.3 million and EPS of 0.10 per share. Sunpower gave mediocre guidance of revenue between 230 and 250 million and GAAP EPS of 0.13 – 0.16 for next quarter. The company also raised full year guidance for 2008 EPS between 1.17 and 1.27 per share.

The share price of Sunpower was down over five dollars today but finished well above its intraday low of $60.25. In my opinion Sunpower is still way overvalued but I am going to recommend to cover. (more…)

Home Solutions of America: Where Is the SEC?

By: ispeculatornew | Date posted: 01.20.2008 (1:25 pm)

The management of Home Solutions of America has been misleading investors for their own self interest for the last couple of years while the Securities and Exchange Commission has been negligent in its duty to protect investors.

I first took notice of Home Solutions of America when the company’s stock price made a run from around a dollar to five dollars in 2005. The stock price benefited when a few hurricanes hit the Gulf Coast that year (Home Solutions of America provides restoration and construction services).

The stock price stalled for a couple of quarters but then jumped all the way up to fourteen dollars on improved earnings and announcements of new contracts. The peak of this rise coincided with a press release stating a subsidiary of Home Solutions of America had been awarded a contract by American Renaissance Homes to be the exclusive provider of delivery and installation services for modular housing in New Orleans and surrounding areas. However, it was found out by that American Renaissance Homes was established and funded by Home Solutions of America only five days before the press release was issued. Also, insiders sold a huge amount of shares right after the press release was issued. (more…)

Sell North American Galvanizing (NGA)

By: ispeculatornew | Date posted: 01.08.2008 (8:13 pm)

NGA – North American Galvanizing (Nasdaq) – (Closing Price – 5.45)

North American Galvanizing & Coatings is down quite a bit since I originally recommended it and I am going to recommend to sell.

A competitor of NGA, Azz Incorporated (AZZ) reported their third quarter results on Jan. 4 and reported a sequential decrease in revenue and operating income for their galvanizing segment. Consequently, due to the weak market and the potential for an earnings let down in the coming quarter I think it is best just to sell North American Galvanizing and take a loss.

Disclaimer: I have no position in NGA.

Time to Short Solar Stocks

By: ispeculatornew | Date posted: 01.06.2008 (11:22 pm)

SPWR – SunPower Corporation (Nasdaq) – (Closing Price on Friday 1/4/08 – $126.12) 

Stocks related to solar power made a tremendous run in 2007 but they are currently grossly overpriced and overdue for a pullback. The insiders of most of these companies have been dumping shares like crazy which is never a good sign. Also, the market is expected to have a turbulent year so I think now is a good time to short some of these companies.

My solar pick to short is SunPower Corporation. SunPower Corporation has shown strong growth over the last year but it currently has at a trailing PE ratio of 631 (that is ridiculously high). For growing companies a trailing PE is less important than the forward PE but SunPower’s forward PE is also astronomical (126 based on the high range of their forecast of GAAP earnings between $0.85 and $1.00 in 2008).

While investors have been buying, the insiders of SunPower Corporation have been dumping a huge amount of shares. Insider selling is never a good sign and the amount of selling that has taken place at SunPower should cause a lot of concern. (more…)

The Stock Market in 2008

By: ispeculatornew | Date posted: 01.05.2008 (3:14 pm)

Last year I made the prediction that the “market will end the year essentially where it began or down on the year. If the market is up on the year I don’t see it being up very much.” My prediction proved to be prescient as the S&P 500 finished with a 3.53% gain, the Dow with a 6.43% gain, and the Nasdaq with a 9.81% gain.

If you take away the Santa Claus rally at the end of the year, which has now quickly evaporated, my prediction of flat growth would have been proven correct. This is in contrast to most of the stock market prognosticators who where predicting another strong year (15% or greater) even though there were signs of a slowing economy and the housing bubble was beginning to deflate.

This year I have noticed that not many commentators are predicting how much the market will gain or lose this year. I guess they didn’t want to eat any more crow like they did last year. They are mentioning that the stock market is in for another volatile and challenging year. I agree. (more…)

Mad Catz Acquires License for Rock Band Game

By: ispeculatornew | Date posted: 01.04.2008 (5:48 pm)

MCZ – Mad Catz Interactive (American Stock Exchange) – (Closing Price – $1.17)

Mad Catz announced a new license agreement today to produce and distribute game peripherals and other products for the game Rock Band published by MTV games.

Mad Catz has secured the rights to manufacture, market, and sell game accessories, including both wired and wireless bass guitars, a drum percussion set bundled with drum sticks, and a wired microphone. Mad Catz expects its initial offerings under this license agreement to be available in the first half of 2008.

Mad Catz continues to align itself with popular games and I think acquiring the license for Rock Band is a smart move. The Rock Band game is similar to Guitar Hero which has been highly successful for Activision (ATVI). If Rock Band attains even a little bit of the success that Guitar Hero has had it should be a popular title.

I am surprised the stock price of Mad Catz finished flat on the day but the general unease of the broader markets has weighed on Mad Catz for a while. Mad Catz’s share price is overdue for a pop and the company is coming into its strongest quarter so I would continue to hold your shares.

Disclaimer: I have no position in MCZ.