9:04 am Pike Electric upgraded to Buy at Stifel; tgt $14.50
Stifel upgrades PIKE to Buy from Hold and sets target price at $14.50. In its opinion, the recent pullback in PIKE shares has increased their attractiveness from a valuation perspective. Since the company reported results on May 6th, PIKE shares have pulled back 24.2% vs a 2% gain in the S&P 500. This includes a 9% decline since Pike announced that its private equity owner, Lindsay Goldberg, would exit a portion of its 37% ownership position through a secondary offering.
9:04 am Vertex Energy initiated with a Buy at Wunderlich; tgt $4
Wunderlich initiates VTNR with a Buy and price target of $4. VTNR is primarily a pure play in the collection of used oil. VTNR collects about 60mm gallons, which it then processes for resale as RFO and/or runs through its proprietary TCEP process. It maintains the flexibility to do so in order to respond to price/supply fluctuations across the collection/resale markets. As such, its margins, while low, are very stable. VTNR could double its TCEP capacity but would need to access external capital to do so. In addition to its economies of scale and low capital requirement, the spread between Vertex's feedstock and its end products are more highly correlated than fully re-refined Group II base lube oils.
9:04 am Standard Pacific upgraded to Buy at CRT Capital; tgt $11
CRT Capital upgrades SPF to Buy from Fair Value and sets target at $11. Following its review of 1Q13 earnings, CRT believes investors should focus on the following key items: (1) notable sequential increase for gross margins in backlog scheduled to be delivered during 2Q13, (2) pricing trends remain favorable as SPF was able to raise prices in roughly 95% of its communities and ASP in backlog is up almost 14% year over year, (3) SPF is targeting net monthly absorption rate of plus or minus three homes by adjusting price on a selective basis, (4) incentives are at the lowest level in three years, (5) trends into April 2013 remain favorable.
9:02 am MeadWestvaco downgraded to Underperform at RBC Capital Mkts; tgt lowered to $30
RBC Capital Mkts downgrades MWV to Underperform from Sector Perform and lowers its tgt to $30 from $35. While the arrival of an activist investor in the name in February seemed to have accelerated management's exploration of certain non-core asset sales, the activist seems to have now left the paper mill. Firm recommends that investors collect on their paper gains and wait for a better entry point. The underlying business continues to be sluggish. On Wednesday night, Trian's latest 13F filing (as of March 31) indicated that it had exited its ownership position in MeadWestvaco and yet MWV ended Thursday up 0.2% vs. the 0.5% decline in the S&P 500.
9:02 am Erickson Air-Crane initiated with a In-line at Imperial Capital; tgt $30
Imperial Capital initiates EAC with a In-line and price target of $30. Firm believes EAC has clearly established a leadership position in the global heavy-lift helicopter market, and its recent acquisition of Evergreen Helicopter (EHI) further establishes its leadership position. However, firm believes that with the stock now basically trading consistent with its peers, after a ~240% increase in the shares since its IPO on 4/11/12, it reflects much of the current upside. In addition, firm believes the lack of catalysts, the focus on execution, potential for net selling, and slightly higher than average leverage will likely limit further multiple expansion.