Good Values Emerging

Indie Research

Stocks fell on the session following another day of weaker-than-expected earnings and negative pre-announcements. The losses expanded after the release of the Fed minutes, as Ben Bernanke and company didn't offer up another round of quantitative easing as the market had hoped. However, the market did come off its lows. We continue to expect a generally lackluster earnings season, but think there are some good values emerging in this market for patient investors.

The Modular Building Stocks Index was the top performing tickerspy Index on the day, led by Art's-Way Manufacturing (ARTW) with a 13% gain. The Electronics Retailer Stocks Index was the day's worst performing tickerspy Index, with HHGregg Inc (HGG) down -36%.

Stocks dropped on the day, with the Dow falling -49 points to 12,605. The S&P slipped fractionally to 1,341, while the Nasdaq lost -14 points to 2,888. Oil rose $1.90 to $85.81 a barrel, while gold dipped -$4.10 to $1,575.70 an ounce.

In earnings news, Adtran (ADTN) shares tumbled -15.4% after the network gear maker missed revenue expectations and issued weak guidance. For Q2, the company's net income dipped -43%, to $21.1 million, or 33 cents per share, from $36.9 million, or 56 cents per share, last year. Adjusted EPS came in at 38 cents per share. Revenue edged lower to $184.0 million from $184.2 million. Analysts were looking for EPS of 36 cents on revenue of $188.3 million. Looking forward, the company expects revenue to be flat sequentially, while analysts were looking for revenue to grow to $221.6 million.

Solid-state drive maker OCZ Technology (OCZ) reported a fiscal Q1 loss of -$6.2 million, or -9 cents per share, versus a prior-year loss of -$9.1 million, or -20 cents per share. Analysts were looking for a loss of -12 cents per share. Revenue soared 54% to $113.6 million. That, however, fell short of the of $115.7 million sales consensus. For Q2, OCZ forecast revenue of between $130-$140 million, bracketing the $132.7 million consensus. The stock fell -17.4%

Hhgregg shares plunged -36.4% after the appliance electronics retailer slashed its full-year profit outlook to 90 cents to $1.05 per share, down from a prior forecast of $1.12-$1.27 per share. Revenue is now projected to rise by 3-6%, down from previous guidance of 9-12%. Analysts were looking for EPS of $1.19. For the first quarter, the company is now projecting a loss of -16 cents to -17 cents per share on sales of $490.0 million. The consensus was for a loss of -5 cents per share on revenue of $509.5 million.

Shares of VeriFone (PAY) soared 10.9% after the credit-card terminal maker won a contract to install payment systems in 6,500 cabs in Washington D.C. As part of the deal, VeriFone will also provide electronic trip reporting, news display, and other programming in cabs. The five-year deal is expected to be worth between $35-$45 million when including potential advertising revenue.

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