actually I checked and buying was long buying not short covering so shorts can be squeezed
we maintain our BUY rating given the company’s
strong position in the U.S. market - which is starting to see strong growth, the
secular tailwind from the shift to natural gas fuel, and the attractive valuation
of 6.3x EV/EBITDA on 2015 estimates.
INVESTMENT THESIS & VALUATION
Fuel Systems’ leading market position and numerous OEM and distributor
relationships position it to benefit from the accelerating, global adoption of
alternative-fueled vehicles. This shift is being driven by high oil prices and tightening
emissions standards. We believe Fuel Systems is in the early stages of a multi-year
growth ramp and the company can become a $600 million revenue business that
generates EPS of $1.80-$1.90 and EBITDA of $80+ million.
Q3 Results Solid – Revenue of $97.6M (+9%) was above our $95.5M
estimate due to strong OEM sales in North America. EPS of $0.05 was
above our estimate of $0.03, due to the revenue outperformance and good
cost control. Results are summarized below.
Q3 LSCM First Call
Reported Estimate Consensus
Revenue ($mm) $97.6 $95.5 $97.6
EPS, GAAP $0.05 $0.03 $0.05
EPS, adjusted $0.05 $0.03 $0.05
U.S. OEM Market Ramps Up – Management noted strong trends in the GM
business with orders for over 3,000 units (we estimate roughly $27 million in
revenue), including approximately 1,600 pickups and 1,400 vans. The company
also announced an aftermarket bi-fuel CNG option for the model year 2014
Chevrolet Cruze, which is the first bi-fuel sedan available. We expect growth in
the North American DOEM business as interest in light-duty gaseous fuel
Strong Results In Automotive Segment:
In-line Results In Industrial Segment – Industrial segment revenue of $30.7
million (+9% in constant currency) was in-line with our estimate and was helped
by strong sales of APUs.
Our 12-month price target of $18 is based on an 8x EV/EBITDA multiple on our 2015
EBITDA estimate of $35 million.
International Business Machines Corp, which is moving steadily into higher-margin businesses such as software and cloud computing, reported a worse-than-expected 4 percent dip in third-quarter revenue, its sixth straight quarterly decline.
Much of that came from a 17 percent slide in overall hardware. Profitability in that business declined by $1 billion so far this year.
At least eight brokerages cut their price targets on the stock by as much as 9.5 percent to between $160 and $220, while analysts at UBS Investment Research downgraded the stock to "neutral" from "buy.
The latest quarterly disappointment deals another blow to Chairman and CEO Ginni Rometty in her first year as head of the board. Including Thursday's plunge, IBM's stock has slid 15 percent since she stepped up as chairman versus the S&P 500's 18 percent gain.
"We are concerned about future earnings power. IBM has been successful in multiple computing waves in the past but we believe the execution issues combined with the weak IT spending environment will hold back any potential revenue growth," UBS analysts said in a note to clients.
Topics covered: Mobile Device Consumer Demand - Mobile Trends in Emerging Markets - Smartphone Operating Systems - Outsourcing and Offshoring Trends - Electronics Manufacturing Supply Chain - Automotive, Data Center and Mobile Spending
Companies include: Coherent Inc. (COHR), IPG Photonics Corporation (IPGP), Newport Corp. (NEWP), Rofin-Sinar Technologies Inc. (RSTI) and many others.
In the following excerpt from the Electronic Components Report, the leading analyst for LASER technology stocks discusses the outlook for his sector for investors:
TWST: You cover laser manufacturers. What are some of important investment themes you are seeing right now in that space?
Mr. Miller: I cover the four primary laser manufacturers: Coherent (COHR), IPG Photonics (IPGP), Newport (NEWP) and Rofin-Sinar (RSTI). It is a diverse group, both in terms of the type of lasers they manufacture and the diversity of end markets served. Because of the diversified worldwide use of lasers, people tend to invest in these companies as a group, based on how they think the global macroeconomy is going to perform.
In particular, China has become a very important market for the laser companies over the past five years. A significant part of the revenue for these companies, ranging from 20% to 30% of revenue, is now coming from China. Because of that correlation, the encouraging news from China about a pickup in their economic activity is helping this group. Also, the fact that Europe is finally showing some signs of life represents another plus for China, in that 25% of China's typical exports go to Europe.
Union Pacific Corp. (NYSE:UNP) is expected to report earnings on Thursday, October 17. The whisper number is $2.59, twelve cents ahead of the analysts’ estimate. Whispers range from a low of $2.56 to a high of $2.64. Union Pacific has an 84 percent positive surprise history, having topped the whisper in 27 of the 32 earnings reports for which we have
After water, tea is the most consumed beverage on the planet. A trend toward healthier lifestyles in developing nations, along with the burgeoning market for bottled tea, has pushed tea up the priority list for some of the world's largest consumer-goods companies. Unilever (NYSE: UL ) calls tea "the hottest beverage in the beverage landscape." But Unilever isn't the only giant pouring resources into this market. In this video series, Fool contributor Asit Sharma outlines the coming tea wars, and walks you through the winners, losers, and dark horses of a $200 billion market.
USA Truck Announces Significantly Improved Operating Results on 13.5% Revenue Growth
- Operating income increases by $8.3 million
- Base revenue increases to $113.9 million
- EBITDA up 339% to $12.0 million
- Debt reduced by $5.0 million