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TechStock Radar
E-mail: Rob@techstockprospector.com
Technorati
July 2009
Archives
 
Friday, July 31, 2009, 12:51 PM — by Rob DeFrancesco, TechStock Radar
Google Shrugs Off MicroHoo

Google (GOOG, $449.33) shares are attempting to break out of the high end of the recent range after taking out the June high of $447.34. Rising earnings estimates are adding fuel to the upside momentum. Since the end of June, the 2009 consensus EPS estimate has added 58 cents to $21.68.

Brokerage firms are jumping onboard as well, with UBS starting coverage yesterday with a ‘Buy’ and $525 price target. OpCo recently estimated that Google’s Q2 U.S. search share rose to 72% from 71.3% in Q1 and 67.4% in Q4. RBC sees Google shares hitting $550 once the online ad business begins to show improvements.

Google bulls have brushed off the Microsoft/Yahoo search partnership as a harmless deal between two weak rivals.
 
Friday, July 31, 2009, 9:18 AM — by Rob DeFrancesco, TechStock Radar
McAfee Tops Estimates

For Q2, McAfee (MFE, $42.56) topped the per-share consensus estimate by three cents, reporting EPS of 60 cents on revenue of $469 million, vs. the consensus of $466.8 million. About 79% of total revenue came from deferred revenue off the balance sheet. Deferred revenue rose 20% year over year to $1.31 billion.

In the enterprise segment, 83 of the Fortune 100 companies now use McAfee technologies. The mid-market segment was particularly strong in Q2. The company closed 424 deals greater than $100K each, including 57 greater than $500K and 28 worth more than $1 million each. On the consumer side, revenue rose 13% year over year to a record $177 million.

Cash flow from operations totaled $53 million and McAfee ended with $886 million in cash and short-term investments.

Looking to Q3, the company expects EPS of 58 cents to 62 cents (the consensus is 59 cents) on revenue of $475 million to $495 million (the consensus is $477.7 million). On the call, management said the company was off to a strong start in Q3, with several large deals already closed.

Lazard Capital ups its McAfee price target to $49 from $43 on continued strong execution and market-share gains.
 
Friday, July 31, 2009, 8:23 AM — by Rob DeFrancesco, TechStock Radar
Nuance & IBM Get Closer

Nuance Communications (NUAN, $13.31) will work more closely with IBM to develop advanced speech-recognition solutions for enterprises and consumers. As part of the agreement, IBM named Nuance its preferred business partner for speech technologies and related professional services.

The two companies will collaborate to advance speech recognition in the following industries: automotive, banking, electronics, energy, healthcare, insurance, media/entertainment, retail, telecom and travel.

IBM and Nuance think the use of advanced speech technologies will make it easier for enterprises and individuals to engage in commerce, access information and collaborate in areas such as customer care, unified messaging and mobile search.

Nuance shares trade at 13 times the fiscal 2009 (September) consensus EPS estimate of $1.02 and 11.7 times the 2010 consensus of $1.13.
 
Thursday, July 30, 2009, 1:49 PM — by Rob DeFrancesco, TechStock Radar
Amazon: UBS Sees $105

UBS starts coverage of Amazon.com (AMZN, $86.26) with a ‘Buy’ and $105 price target based on expected revenue and free cash flow growth of 20% over each of the next three years.

The firm says the Zappos.com acquisition was a smart one because it better positions Amazon in the online-apparel segment, a $23-billion market opportunity that’s larger than the online PC and consumer-electronics segments. UBS also points out that Amazon is having good success with its Kindle product line in a move to expand its digital focus.

After hitting a new high of $94.40 last week, Amazon.com shares dropped to a low of $82.60 following the release of Q2 results. The stock now trades at 40 times the 2010 consensus EPS estimate of $2.16.
 
Thursday, July 30, 2009, 9:44 AM — by Rob DeFrancesco, TechStock Radar
GSI Commerce Triples

Shares of GSI Commerce (GSIC, $17.46), a provider of e-commerce services to retailers, have more than tripled off the November low of $5.69. The stock is up more than 7% this morning after the company reported a Q2 loss of 27 cents, eight cents better than the consensus estimate of a loss of 35 cents, on revenue of $187.2 million, vs. the consensus estimate of $181.3 million.

For Q3, the company sees revenue of $181 million to $186 million, above the consensus of $180.5 million.

Yesterday GSI announced a multiyear extension and expansion of its e-commerce agreement with Turner Sports and NASCAR. GSI will continue to provide e-commerce technology, fulfillment, customer service and interactive marketing services on NASCAR.com.

The stock is now up 66% YTD. In Q1, when the stock traded as low as $7.35 in January, Turner Investment Partners opened a position of 479,380 shares.

Both Lazard Capital and Collins Stewart raise their target price on GSI Commerce to $20, while UBS starts coverage with a ‘Buy’ and $20 target.
 
Thursday, July 30, 2009, 8:06 AM — by Rob DeFrancesco, TechStock Radar
Brocade: Columbus Circle Big Q2 Buyer

In Q2, Columbus Circle Investors opened a position in Brocade Communications (BRCD, $8.34) of 4.838 million shares. The stock traded as low as $3.35 a share early in the quarter.

Jefferies earlier this month raised its target price to $9 based on positive channel checks for the July quarter. Brocade has been mentioned as possible takeover target for HP or IBM.

For more on Brocade, see TechStock Radar—July 7, 2009.
 
Wednesday, July 29, 2009, 3:53 PM — by Rob DeFrancesco, TechStock Radar
DreamWorks Animation Jumps 8%

DreamWorks Animation (DWA, $31.21) shares are up more than 8% today on heavy volume after the company came in with Q2 EPS of 30 cents, 14 cents above the consensus estimate, on revenue of $132 million, vs. the consensus of $116.8 million and the high estimate of $125.5 million.

Monsters vs. Aliens will be out on DVD in the U.S. on September 29. The movie, released on March 27, has sold $377 million in tickets worldwide. About 60% of the box-office receipts in the U.S. have been for 3D tickets. According to CEO Jeffrey Katzenberg, Monsters vs. Aliens has sequel potential based on the U.S. box office so far. But no decision has been made as of yet because the film has come in below expectations in some foreign markets.

For 2010, Dreamworks Animation has three films on the schedule:
*March 26—How to Train Your Dragon
*May 21—Shrek 4
*November 5—Oobermind (Superhero satire produced by Ben Stiller and voiced by Robert Downey Jr.)

Thomas Weisel made a nice call on DreamWorks Animation when it started coverage on July 8 with an ‘Overweight’ and price target of $35 when the stock was trading around $26. Wedbush made an even better call at the end of April when it recommended buying the stock on weakness when it traded around $18.25 (see TechStock Radar—April 24, 2009).

For more on Dreamworks Animation, see TechStock Radar—July 10, 2009.
 
Wednesday, July 29, 2009, 10:38 AM — by Rob DeFrancesco, TechStock Radar
THQ Slumps 18% on Weak FQ2 Outlook

Shares of THQ (THQI, $6.85) are down more than 18% this morning on weak fiscal Q2 revenue guidance and the announcement of a hefty $90-million convertible offering (19% of the recent market cap).

For the September quarter, THQ sees revenue of $85 million to $95 million, well below the consensus estimate of $124.1 million. The company blames the shortfall on a lack of new releases and reduced catalog sales.

Fiscal Q1 revenue came in at $233.9 million (well above the consensus estimate of $203 million) on strong sales of its UFC 2009 Undisputed and Red Faction: Guerilla games.

One of THQ’s next major releases, Darksiders, won’t be out until January.
 
Wednesday, July 29, 2009, 9:02 AM — by Rob DeFrancesco, TechStock Radar
Broadcom: Columbus Circle Builds Position

In Q2, Columbus Circle Investors ($10.2 billion in long equity assets) increased its stake in Broadcom (BRCM, $28.04) by 59% with the purchase of 2.76 million shares. The firm now owns 7.48 million shares and counts Broadcom among its top 10 holdings. During the June quarter, Broadcom shares traded as low as $19.70.

Columbus Circle bought 4.65 million shares of Broadcom in Q1, when the stock traded as low as $15.31. (See TechStock Radar--May 1, 2009.)

For Q3, Broadcom sees revenue of $1.11 billion to $1.18 billion, vs. the prior consensus of $1.02 billion. Over the past week, the 2009 consensus EPS estimate jumped 21 cents to 96 cents and the 2010 estimate rose 27 cents to $1.38.
 
Wednesday, July 29, 2009, 8:26 AM — by Rob DeFrancesco, TechStock Radar
Yahoo/Microsoft Deal: Yawn

Yahoo and Microsoft finally announce their search partnership. Yahoo CEO Carol Bartz says everything just got better for Yahoo users. But how about for Yahoo?

The boatload of money is missing. There is no up-front payment. And Yahoo will only get to keep 88% of the revenue from search ads sold on its site for the first five years, vs. some estimates of 110%.

Bartz just blinked. She needs to step it up if we’re to take her foul-mouthed shtick seriously from here on out.

For details, Tech-Stock Prospector subscribers should see today’s Rob’s Journal.
 
Tuesday, July 28, 2009, 2:11 PM — by Rob DeFrancesco, TechStock Radar
Viacom: Epix Scores Verizon

On the Viacom (VIA.B, $24.01) Q2 earnings call this morning, the company announced that its Epix pay cable channel (a joint venture with Lionsgate and MGM) scored its first distribution deal. Verizon Communications will make the movie channel available to its 2.5 million FiOS subscribers. Down the road, Verizon may offer Epix to its 4 million V CAST mobile subscribers. Viacom promised more distribution announcements “in the near future,” which presumably means ahead of the Epix launch in early October.

Epix is expected to include an on-demand feature. And the website will allow subscribers to send text messages over the screen while they watch the same movie.

On the call, analysts were concerned about the start-up costs associated with Epix and the road to profitability. Management said it expects breakeven “in a relatively short time.” But that could be anywhere from 18 to 24 months.

In the meantime, Viacom has to deal with the fact that it’s losing share in the important 12-34 demographic because of poor programming choices at its key MTV network. The company is hoping its renewed focus on content will stop the viewer slide. Plus, it’s counting on attracting more young viewers to its Comedy Central and Spike TV offerings.

For Q2, Viacom said domestic ad revenue fell 6% (an improvement from the 9% decline in Q1) and that the ad market firmed up toward the end of the quarter. According to CEO Philippe Dauman, the scatter market “strengthened as the quarter progressed” and most of the cancellations from last year’s upfronts came back in the scatter market as Q2 came to a close.
 
Tuesday, July 28, 2009, 10:03 AM — by Rob DeFrancesco, TechStock Radar
BI Software Takeover Targets

Following the announcement of the IBM-for-SPSS deal, there’s speculation about which business-intelligence (BI) software players could be scooped up next by the likes of Oracle, SAP, Hewlett-Packard or IBM.

Informatica (INFA, $18.18) has been a rumored takeover target for Oracle for years, but no deal ever materialized. Larry Ellison should have made his move last fall when Informatica shares traded as low as $10.42.

Roth Capital this morning upgrades Informatica to ‘Buy’ with a price target of $21 partially as a speculative play on more M&A activity in the BI segment. Applying the same forward valuation from the IBM/SPSS transaction results in a fair value of $22.60 a share for Informatica.

Other potential takeover candidates in this space: Actuate (ACTU, $4.76) and MicroStrategy (MSTR, $58.55).
 
Tuesday, July 28, 2009, 8:01 AM — by Rob DeFrancesco, TechStock Radar
IBM Snaps Up SPSS

IBM (IBM, $117.63) will buy SPSS (SPSS, $39.04), a provider of predictive-analytics software, for $50 a share in cash, a 42% premium to last night’s closing price. The deal, valued at about $1.2 billion, goes off at 4.1X estimated 2009 revenue of $289.4 million.

Predictive-analytics software helps customers forecast future trends and spot shifts in consumer patterns or behavior before they occur. The technology can also be used to help reduce credit risk, increase customer loyalty and detect/prevent fraud.

The acquisition will further expand IBM’s Information on Demand software portfolio and business-analytics capabilities. Research firm IDC estimates that the worldwide market for business-analytics software will top $25 billion this year.

SPSS shares traded below $23 in early March. The stock rallied in early May after the company beat Q1 consensus estimates and raised Q2 guidance.
 
Monday, July 27, 2009, 4:12 PM — by Rob DeFrancesco, TechStock Radar
THQ Drops Ahead of FQ1 Results

Shares of THQ (THQI, $8.22) fell 3% today ahead of fiscal Q1 results out tomorrow. Earlier today, AmTech said it expects the company to come in with revenue of $220 million for the June quarter (well ahead of the consensus estimate of $203 million) based on the early success of the UFC 2009 Undisputed game. THQ is also seeing solid demand for Red Faction: Guerilla (released the first week of June), which was the #9 best-selling videogame last month (UFC 2009 was #2).

THQ shares are up 20% since the company announced its management reorganization in late June.

For more on THQ, see TechStock Radar—June 10 and June 8, 2009.
 
Monday, July 27, 2009, 1:01 PM — by Rob DeFrancesco, TechStock Radar
The Kindle Alternative

This review in The New Yorker of the Amazon.com (AMZN, $84.21) Kindle isn’t exactly glowing. The writer has a problem with the Kindle 2’s gray screen and says Amazon is “very good at selling things,” but “isn’t so good, to date anyway, at making things.” His recommendation: Buy an iPod Touch or (iPhone) and install the Kindle app. It’s cheaper, the screen resolution is better (even if the screen is much smaller) and it’s not trying to be something it’s not.
 
Monday, July 27, 2009, 8:38 AM — by Rob DeFrancesco, TechStock Radar
Stifel Ups IAC to 'Buy'

Stifel Nicolaus upgrades IAC (IACI, $17.91) to ‘Buy’ with a price target of $22.50 based on expectations that the company will begin to use excess cash for share buybacks instead of costly acquisitions. In the Q1 earnings report, IAC said it spent $45.4 million to repurchase 3 million shares at an average price of $15.15 between February 3 and April 24. Stifel thinks IAC could talk more about buybacks when it releases Q2 results on Wednesday. The stock is up just 13.9% YTD, vs. a 43% rebound for competitor Yahoo.

Also this morning, IAC announces the formation of a new media company with NBC’s Ben Silverman. The venture will let advertisers and content creators work together early on in the development process, giving advertisers the opportunity to partner in campaigns and content creation for distribution across various platforms.

NBC plans to partner with Silverman and may invest in the new enterprise, while IAC will provide initial capital.
 
Saturday, July 25, 2009, 9:31 AM — by Rob DeFrancesco, TechStock Radar
Netflix Shares Press Pause

Netflix (NFLX, $42.20) shares fell 9.1% yesterday on heavy volume of 5.1 million shares, about 2.7X average daily volume. Expectations were high going into the Q2 earnings report (the stock had risen 21% since the end of May) and there are concerns about a drop in average revenue per user.

On the Q2 conference call, CEO Reed Hastings said Netflix is seeing more subscribers going to the lower price plans, which is partially the result of the company’s growing digital-streaming service. For $8.99 a month, users have full access to the instant-streaming feature.

Hastings also said Netflix has no intentions of going into the DVD-rental kiosk business to compete with Redbox. “We’re putting all of our innovation efforts into streaming,” he said.

For more on Netflix, see TechStock Radar--July 24, 2009.
 
Saturday, July 25, 2009, 8:57 AM — by Rob DeFrancesco, TechStock Radar
Amazon: 3 Key Points

Three key points from the Amazon.com (AMZN, $86.49) Q2 conference call:

* The company is seeing “an industry slowdown in videogames and consoles” in North America.
* Kindle unit sales are “exceeding our expectations.”
* Zappos.com had 2008 revenue of about $635 million.
 
Friday, July 24, 2009, 1:31 PM — by Rob DeFrancesco, TechStock Radar
Apple Tablet Coming Soon?

Is the much-rumored Apple (AAPL, $159.18) tablet computer for real? According to AppleInsider.com, it’ll be launched in calendar Q1 of next year. The website says the 10-inch, 3G-enabled tablet has been approved by Jobs and added to the company’s 2010 product roadmap.
 
Friday, July 24, 2009, 8:35 AM — by Rob DeFrancesco, TechStock Radar
SonicWALL: Baird Sees $10

Baird upgrades SonicWALL (SNWL, $6.25) to ‘Outperform’ with a price target of $10 following solid Q2 results. The company reported EPS of 10 cents, three cents above the consensus estimate, on revenue of $48.6 million, vs. the consensus of $47.5 million. Product revenue rose 7% sequentially to $16.5 million.

For Q3, the company sees EPS of eight to nine cents (the consensus is eight cents) on revenue of $46 million to $49 million, vs. the consensus of $48.4 million.

For more on SonicWALL, see TechStock Radar—July 6, 2009.
 
Friday, July 24, 2009, 7:49 AM — by Rob DeFrancesco, TechStock Radar
Netflix: Citi vs. OpCo

There are two very different views on Netflix (NFLX, $46.46) this morning from Citi and OpCo. Following Q2 results, Citi ups its price target to $56 from $52 on what it sees as positive metrics, while OpCo downgrades Netflix to ‘Underperform’ with a price target of $38 on valuation and increased competition from Redbox. For more on Netflix, Tech-Stock Prospector subscribers should see today’s Rob’s Journal.
 
Thursday, July 23, 2009, 2:04 PM — by Rob DeFrancesco, TechStock Radar
New 52-Week High for Amazon.com

Following last night’s announcement that Amazon.com (AMZN, $93.88) would purchase online shoe retailer Zappos.com for $928 million, the stock has surged nearly 6% on heavy volume, hitting a new 52-week high of $94.40.

Amazon reports Q2 results after the close. The consensus estimates: EPS of 32 cents on revenue of $4.69 billion.

Turner Investment Partners made a smart move in Q1 when it opened a new position. Amazon shares traded as low as $47.63 in the March quarter. For more, see TechStock Radar—May 6, 2009.

Also, Citi’s upgrade to ‘Buy’ in the middle of April when the stock was trading around $78.50 was a good call. For more, see TechStock Radar—April 20, 2009.
 
Thursday, July 23, 2009, 9:33 AM — by Rob DeFrancesco, TechStock Radar
VMware: Needham Ups to 'Buy'

Needham upgrades VMware (VMW, $33.64) to ‘Buy’ with a price target of $42 after the company reported above-consensus Q2 numbers. Per-share earnings of 20 cents topped the consensus by a penny and revenue came in at $456 million, vs. the consensus of $452.1 million.

For Q3, VMware sees revenue of $465 million to $480 million, vs. the consensus of $471.1 million.
 
Thursday, July 23, 2009, 8:16 AM — by Rob DeFrancesco, TechStock Radar
Equinix: Citi Sees $105

Following solid Q2 results, Citi ups its price target on datacenter-services provider Equinix (EQIX, $77.59) to $105 from $95. Equinix reported Q2 EPS of 44 cents, 11 cents above the consensus estimate, on revenue of $213.2 million (+7% year over year), vs. the consensus of $208.8 million.

For Q3, the company expects revenue of $221 million to $225 million, vs. the consensus of $219.9 million. For 2009, Equinix sees revenue of $860 million to $875 million, vs. the consensus of $861.1 million.

For more, see TechStock Radar—July 21, 2009.
 
Wednesday, July 22, 2009, 3:41 PM — by Rob DeFrancesco, TechStock Radar
Apple Worth $225?

Deutsche Bank thinks so. While our target is not quite as ambitious, Tech-Stock Prospector subscribers should see Rob’s Journal for the updated fair value for Apple (AAPL, $156.53).
 
Wednesday, July 22, 2009, 8:32 AM — by Rob DeFrancesco, TechStock Radar
Seagate Lifts FQ1 Revenue Guidance

Seagate Technology (STX, $11.20) reported fiscal Q4 EPS of six cents, well above the consensus estimate of a loss of 10 cents, on revenue of $2.35 billion, vs. the consensus of $2.25 billion. For fiscal Q1 (September), the company expects revenue of $2.4 billion to $2.6 billion (the consensus is $2.41 billion), above its previous forecast of $2.35 billion to $2.5 billion. On the conference call, management said overall demand for storage capacity has recovered more quickly than expected.

For more on Seagate, see TechStock Radar—June 25, 2009.
 
Wednesday, July 22, 2009, 8:06 AM — by Rob DeFrancesco, TechStock Radar
Atheros Nails It

Atheros Communications (ATHR, $24.70 pre market) last night reported Q2 EPS of 20 cents, six cents above the consensus estimate, on revenue of $112.2 million, vs. the consensus of $103.7 million.

For Q3, Atheros sees EPS of 29 cents to 31 cents (the consensus is 17 cents) on revenue of $129 million to $134.6 million, vs. the consensus of $110.9 million. CFO Jack Lazar said the company has good visibility going into the quarter because of strength in the consumer segment (chips in routers and handsets).

Deutsche Bank made a nice upgrade call to ‘Buy’ on June 4 when the stock was trading at $15.75. This morning, the firm raises its price target to $27 following the strong Q2 results and bullish Q3 guidance.

For more on Atheros, see TechStock Radar—July 15, July 14, June 18 and June 10, 2009.
 
Tuesday, July 21, 2009, 4:46 PM — by Rob DeFrancesco, TechStock Radar
Apple Tops Estimates

For full coverage of the fiscal Q3 earnings report from Apple (AAPL, $151.51), Tech-Stock Prospector subscribers should see today's Rob's Journal.
 
Tuesday, July 21, 2009, 8:59 AM — by Rob DeFrancesco, TechStock Radar
SanDisk: Stifel Sees Q2 Beat

Stifel Nicolaus expects SanDisk (SNDK, $18.62) to beat Q2 consensus estimates when it reports results after the close tomorrow. The firm also sees SanDisk offering a better-than-expected outlook for the September quarter based on an overall improvement in demand for NAND flash. The June consensus numbers: a loss of 16 cents on revenue of $708.5 million.

For more on SanDisk, see TechStock Radar—July 16 and July 13, 2009.
 
Tuesday, July 21, 2009, 8:27 AM — by Rob DeFrancesco, TechStock Radar
Equinix: Jefferies Lifts Target

Jefferies sees positive 2H momentum for datacenter-services provider Equinix (EQIX, $76.43) and boosts its price target to $95 from $85. The company reports Q2 results tomorrow. The consensus estimates: EPS of 33 cents on revenue of $208.8 million. The stock is up 44% YTD.
 
Monday, July 20, 2009, 1:07 PM — by Rob DeFrancesco, TechStock Radar
New 52-Week High for Priceline.com

Priceline.com (PCLN, $120.07) shares are on a roll, now up 166% from the October low of $45.15. The stock looks like it wants to fill the gap on the price chart at $122.45 from June 2008. Over the past 30 days, the 2009 consensus EPS estimate has advanced seven cents to $6.63. The stock has a forward P/E of 18, vs. the estimated EPS growth of 11%.

For more on Priceline.com, see TechStock Radar—June 19 and May 12, 2009.
 
Monday, July 20, 2009, 9:22 AM — by Rob DeFrancesco, TechStock Radar
Apple Earnings Preview

Apple (AAPL, $151.75) reports fiscal Q3 results (June) tomorrow. For a full preview, Tech-Stock Prospector subscribers should see today's Rob's Journal.
 
Monday, July 20, 2009, 8:07 AM — by Rob DeFrancesco, TechStock Radar
Dell For Rackspace?

There has been some recent chatter about Dell possibly being interested in Rackspace Hosting (RAX, $13.83), a provider of on-demand website, application and storage hosting. Rackspace is growing through this recession, with revenue expected to be up nearly 15% this year to $610.6 million. While Rackspace is a good cloud-computing play, Dell might alienate other hosting customers by buying a competitor.

Rackspace shares are up 245% from the February low of $4.00.
 
Friday, July 17, 2009, 9:04 AM — by Rob DeFrancesco, TechStock Radar
Google: RBC Sees $550

RBC Capital bumps up its target price on Google (GOOG, $432.76 pre market) to $550 from $500 based on solid cost controls and signs that the ad business is stabilizing. On the Q2 conference call last night, CEO Eric Schmidt said it’s too early to tell if the economy is bottoming out, but that the company is well positioned for the eventual rebound.
 
Friday, July 17, 2009, 8:04 AM — by Rob DeFrancesco, TechStock Radar
10 Tech Takeover Targets

For a list of 10 possible takeover targets, Tech-Stock Prospector subscribers should see today's Rob's Journal.
 
Friday, July 17, 2009, 7:33 AM — by Rob DeFrancesco, TechStock Radar
IBM: Citi Boosts Target to $135

Following last night’s strong Q2 earnings report from IBM (IBM, $110.64), Citi raises its price target to $135 from $125. IBM reported Q2 EPS of $2.32, 30 cents above the consensus estimate, on revenue of $23.25 billion, vs. the consensus of $23.59 billion. Gross margin advanced 230 basis points to 45.5% from the year-ago period. For 2009, IBM now sees EPS of at least $9.70, well above the consensus of $9.15.
 
Thursday, July 16, 2009, 2:47 PM — by Rob DeFrancesco, TechStock Radar
Broadcom Rebounds

Broadcom (BRCM, $27.05) shares have rallied sharply off the July 8 low of $23.01 and are approaching the June 10 high of $27.56. There’s significant resistance at the July 2008 high of $29.91.

 

After pulling its buyout offer for Emulex last week, Broadcom CEO Scott McGregor said the company would look at “other value-creating alternatives” to position itself to capitalize on the emerging opportunities in the converged enterprise networking markets.
 
Thursday, July 16, 2009, 9:50 AM — by Rob DeFrancesco, TechStock Radar
Google Q2 On Tap--Updated

Google (GOOG, $439.15) reports Q2 results after the close. The consensus estimates: EPS of $5.09 on revenue of $4.06 billion. Over the past 30 days, the consensus EPS estimate has risen six cents. The high estimate is $5.31.

For more on Google, see TechStock Radar—July 13 and July 10, 2009.

UPDATED--4:22 PM--Google reports Q2 EPS of $5.36, above the consensus of $5.09 and the whisper number of $5.15. Revenue of $4.07 billion matched the consensus of $4.06 billion. The stock is down about 10 points after hours.
 
Thursday, July 16, 2009, 8:02 AM — by Rob DeFrancesco, TechStock Radar
SanDisk: Lazard Ups Q2 Estimates

Lazard Capital expects SanDisk (SNDK, $16.20) to come in with above-consensus Q2 results thanks to market-share gains, favorable pricing and improved yields. The firm sees a loss of 16 cents on revenue of $714 million, vs. its previous forecast of a loss of 21 cents on revenue of $696 million. The consensus: a loss of 18 cents on revenue of $700 million. SanDisk reports Q2 results on July 22. Lazard maintains its price target of $20.

For more on SanDisk, see TechStock Radar—July 13, 2009.
 
Wednesday, July 15, 2009, 2:00 PM — by Rob DeFrancesco, TechStock Radar
Atheros Trends Higher

Shares of Atheros Communications (ATHR, $21.29) are up more than 5% today on heavy volume. Several Wall Street firms made good calls when they turned bullish on Atheros last month.

For more, see TechStock Radar—June 10, June 18 and July 14, 2009.
 
Wednesday, July 15, 2009, 9:32 AM — by Rob DeFrancesco, TechStock Radar
Apple Trading Update

For the latest trading up on Apple (AAPL, $144.90), Tech-Stock Prospector subscribers should see today's Rob's Journal.
 
Wednesday, July 15, 2009, 8:00 AM — by Rob DeFrancesco, TechStock Radar
Emulex Regroups

Emulex (ELX, $8.72) has reactivated its $100-million share repurchase plan now that Broadcom is out of the picture. The company has $302 million in cash & investments on the balance sheet, representing 42% of the market cap. While down sharply from the recent high of $11.44, the stock is still up 25% YTD.
 
Tuesday, July 14, 2009, 12:09 PM — by Rob DeFrancesco, TechStock Radar
Dell Plots Deal Strategy

At today’s Dell (DELL, $12.14) analyst meeting, management made it clear that it wants to diversify the business away from its focus on PCs, which account for nearly 60% of total revenue. Acquisitions will play a key role in this new strategy, but Dell didn’t give any specific hints on where it is looking.

It’s obvious that the company needs to expand in the datacenter and on the services side. Dell is looking to do more acquisitions like EqualLogic, which was a $1.4 billion deal in 2007. This would indicate the company prefers to do a series of smaller deals instead of one mega acquisition.

For more on Dell's shopping list, Tech-Stock Prospector subscribers should see the July 2009 issue.
 
Tuesday, July 14, 2009, 8:27 AM — by Rob DeFrancesco, TechStock Radar
Atheros: Lazard Sees $25

Lazard Capital upgrades chipmaker Atheros Communications (ATHR, $19.63) to ‘Buy’ with a price target of $25 based on strong notebook shipments in Q2 and market-share gains, positive trends that the firm sees carrying into Q3. Atheros reports Q2 results next week. The consensus estimates: EPS of 14 cents on revenue of $103.6 million.
 
Tuesday, July 14, 2009, 8:00 AM — by Rob DeFrancesco, TechStock Radar
McAfee: RBC Expects Strong Q2

According to RBC Capital, channel checks indicate McAfee (MFE, $41.22) had a strong Q2, driven by large enterprise security deals. The firm says McAfee tracked above the guidance midpoint. In April, McAfee offered the following guidance: EPS of 54 cents to 58 cents on revenue of $455 million to $475 million.
 
Monday, July 13, 2009, 8:35 AM — by Rob DeFrancesco, TechStock Radar
Google: Kaufman Sees $520

Kaufman ups its price target on Google (GOOG, $414.40) to $520 from $500 on stronger-than-expected international growth and potential stabilization in the U.S. online advertising market. The firm raises its 2009 estimates to EPS of $21.84 on revenue of $16.99 billion from $21.05 and $16.49 billion (the consensus is $21.20/$16.87 billion). Google reports Q2 results on Thursday.
 
Monday, July 13, 2009, 8:26 AM — by Rob DeFrancesco, TechStock Radar
RF Micro: Wellington Boosts Stake

After opening a position in Q1 of 1.53 million shares in chipmaker RF Micro Devices (RFMD, $3.54), Wellington Management boosted its stake to 36.5 million shares, representing 13.6% of the outstanding shares. Wellington is now the #1 holder, overtaking Artis Capital Management, which owned 15.5 million shares as of the March quarter.

For more on RF Micro, see TechStock Radar—July 8, 2009.
 
Monday, July 13, 2009, 8:06 AM — by Rob DeFrancesco, TechStock Radar
SanDisk: Thomas Weisel Sees $20

Thomas Weisel upgrades SanDisk (SNDK, $14.47) to ‘Overweight’ with a price target of $20 based on continued manufacturing cost cuts and a potential boost in 2H demand for NAND flash.

SanDisk reports Q2 results on July 22. The consensus estimates: a loss of 18 cents on revenue of $699.3 million.
 
Friday, July 10, 2009, 2:12 PM — by Rob DeFrancesco, TechStock Radar
DreamWorks: Fidelity Boosts Stake to 10.2%

In an SEC filing this morning, Fidelity disclosed that it has taken a 10.25% stake in DreamWorks Animation (DWA, $27.10). It holds 7.716 million shares, up from just 1.275 million shares in Q1. Fidelity actually sold off 1.395 million shares in the March quarter, so its opinion of DreamWorks has shifted significantly in the past few months.

For more on DreamWorks, see TechStock Radar—July 9, 2009.
 
Friday, July 10, 2009, 1:41 PM — by Rob DeFrancesco, TechStock Radar
Tech-Stock Prospector July 2009 Issue Now Available

The July 2009 issue of Tech-Stock Prospector (#103) has been posted to the website. 
 
Friday, July 10, 2009, 7:59 AM — by Rob DeFrancesco, TechStock Radar
Google: RBC Boosts Q2 Outlook

RBC Capital now expects Google (GOOG, $410.39) to report Q2 EPS of $5.11, up from its previous estimate of $4.91. The consensus estimate is $5.05, up two cents over the past 30 days. The firm, which maintains its $500 price target, expects Google management to take a more positive tone for 2H09 when the company reports results for the June quarter next week.
 
Thursday, July 9, 2009, 2:40 PM — by Rob DeFrancesco, TechStock Radar
DreamWorks: Takeover Watch?

Goldman says DreamWorks Animation (DWA, $27.07) could be a takeover target. The firm raised its target price to $36 from $34 this morning based on several positive catalysts, including the company’s upcoming slate of films/DVDs and the potential renegotiation of its distribution agreement with Paramount. For more on DreamWorks, see TechStock Radar—July 8, 2009.
 
Thursday, July 9, 2009, 9:49 AM — by Rob DeFrancesco, TechStock Radar
Emulex Sinks After Rejecting Broadcom Bid

Emulex (ELX, $8.30) rejects the $11 per share cash offer from Broadcom (BRCM, $23.88) as ‘inadequate,’ saying it significantly undervalues the company’s long-term prospects. Shareholders seem to be focused on the short-term buyout prospects as the stock is down more than 14% on the news. It’s highly unlikely that Broadcom comes back with a higher offer. For more, see TechStock Radar—June 30, 2009.
 
Thursday, July 9, 2009, 7:56 AM — by Rob DeFrancesco, TechStock Radar
Amazon Cuts Kindle Price

In order to stay competitive in the e-reader market, Amazon.com (AMZN, $77.36) slashed the price of the Kindle 2 by 17% to $299. The company faces increased competition from Sony and a slew of smaller players. The large format Kindle DX, which goes for $489, could be in for a price cut as well over the next six months.
 
Wednesday, July 8, 2009, 4:56 PM — by Rob DeFrancesco, TechStock Radar
Data Domain Goes To EMC

Data Domain (DDUP, $33.90) has agreed to be taken over by EMC (EMC, $12.52) for $33.50 a share in cash. NetApp (NTAP, $19.10 after hours) declined to boost its bid.

What’s next for NetApp? For continuing coverage, Tech-Stock Prospector subscribers should see Rob’s Journal.
 
Wednesday, July 8, 2009, 1:03 PM — by Rob DeFrancesco, TechStock Radar
DreamWorks Animation: Weisel Upbeat

Thomas Weisel starts coverage of DreamWorks Animation (DWA, $25.90) with an ‘Overweight’ and a price target of $35 based on the upcoming release schedule. Adventure comedy How to Train Your Dragon will be out on March 26, 2010.

The company announced today that Monsters vs. Aliens would be released on DVD and Blu-ray on September 29.

For more on Dreamworks, see TechStock Radar—May 29, 2009.
 
Wednesday, July 8, 2009, 8:15 AM — by Rob DeFrancesco, TechStock Radar
RF Micro: OpCo Sees $5

OpCo ups its price target on chipmaker RF Micro Devices (RFMD, $3.50) to $5 from $4 based on favorable demand trends and solid expense management. The firm says design wins at LG, Sony Ericsson and Research in Motion will boost revenue starting next year. For fiscal 2010 (March), OpCo sees EPS of 12 cents, above the consensus estimate of eight cents.
 
Wednesday, July 8, 2009, 7:20 AM — by Rob DeFrancesco, TechStock Radar
Google to Debut Chrome OS

Google (GOOG, $396.63) will introduce a new operating system initially targeted at netbooks. Expected in the second half of next year, the Chrome operating system will be a direct attack on Microsoft Windows.

According to Google, speed, simplicity and security are the key aspects of Google Chrome OS. It’s being designed to start up and get users onto the Web in a few seconds. The company is working with ‘multiple OEMs’ to bring Chrome OS netbooks to market.
 
Tuesday, July 7, 2009, 3:25 PM — by Rob DeFrancesco, TechStock Radar
Research in Motion Trading Update

Research in Motion (RIMM, $67.10) has dropped 22% from the June high of $86.00. For the latest trading update, Tech-Stock Prospector subscribers should see today’s Rob’s Journal.
 
Tuesday, July 7, 2009, 9:56 AM — by Rob DeFrancesco, TechStock Radar
MetroPCS: Selloff Overdone?

UBS says the recent weakness in MetroPCS (PCS, $12.16) is overdone—the stock is down 36% from its April high of $18.98 on competitive concerns from Tracfone Wireless, which is offering a $45/month unlimited service plan called Straight Talk. UBS says MetroPCS shares are undervalued based on expected growth rates. MetroPCS trades at 10X the 2010 consensus EPS estimate of $1.17.
 
Tuesday, July 7, 2009, 8:06 AM — by Rob DeFrancesco, TechStock Radar
Brocade: Jefferies Ups Target to $9

Jefferies boosts its price target on Brocade Communications (BRCD, $7.35) to $9 from $8.50 based on positive channel checks for fiscal Q3 (July). The firm raises its fiscal 2010 (October) EPS estimate by two cents to 69 cents (the consensus estimate is 65 cents) on an expected ramp in demand for Brocade’s IP products. Jefferies says Brocade is still in talks with Hewlett-Packard about a partnership involving its Ethernet products. For more, see TechStock Radar—June 26, 2009.
 
Monday, July 6, 2009, 1:46 PM — by Rob DeFrancesco, TechStock Radar
Western Digital: 35% Upside?

BofA/Merrill upgrades Western Digital (WDC, $25.92) to ‘Buy’ with a price target of $35 based on increased demand for hard-disk drives, especially in the notebook segment. The stock trades at 12X the fiscal 2010 (June) consensus EPS estimate of $2.14. The high estimate is $2.80. For more, see TechStock Radar—June 24 & May 28, 2009.
 
Monday, July 6, 2009, 8:34 AM — by Rob DeFrancesco, TechStock Radar
SonicWALL: Lazard Sees $8

Lazard Capital upgrades SonicWALL (SNWL, $5.52), a provider of network-security products and services, to ‘Buy’ with a price target of $8 based on an expected rebound in product revenue from Q1 and expanding margins. SonicWALL trades at 19X the 2009 consensus EPS estimate of 29 cents. Revenue this year is expected to decline 11.5% to $193.4 million.
 
Monday, July 6, 2009, 8:01 AM — by Rob DeFrancesco, TechStock Radar
eBay: Jefferies Sees Value

According to Jefferies, eBay (EBAY, $16.34) is seeing stabilization in its core Marketplaces business, while growth continues on the Payments side. The firm says the stock is undervalued, trading at 11X the 2009 consensus EPS estimate of $1.47. eBay shares are up 17% YTD. The company reports Q2 results on July 22.
 
Thursday, July 2, 2009, 1:42 PM — by Rob DeFrancesco, TechStock Radar
Palm Pre Sales Slowing?

According to Pali Research, checks indicate sales of the Palm (PALM, $15.99) Pre have slowed by as much as 33% over the past week at Sprint. The firm doesn’t think this has to do with inventory shortages. Pali says this could just be a short-term dip in demand, but it’s worth monitoring. For more on Palm, see TechStock Radar—June 25, 2009.
 
Thursday, July 2, 2009, 8:55 AM — by Rob DeFrancesco, TechStock Radar
Take-Two: Kaufman Sees $14

Kaufman upgrades Take-Two Interactive (TTWO, $9.73) to ‘Buy’ with a price target of $14 based on the company’s fiscal 2010 release schedule. This is the third broker upgrade over the past few weeks.

For more on Take-Two, see TechStock Radar—June 30 and June 22, 2009.
 
Thursday, July 2, 2009, 7:44 AM — by Rob DeFrancesco, TechStock Radar
Manhattan Associates Cuts Q2 Outlook

Manhattan Associates (MANH, $18.27) cuts Q2 EPS guidance to eight cents to 12 cents from previous guidance of 15 cents to 30 cents. The consensus is 22 cents. The company expects license revenue to come in around $4 million. Manhattan Associates reports full results on July 21.

After the company trimmed Q1 guidance at the start of April, the stock dropped 11.5% in one day. It fell an additional 8% before hitting a low of $14.07 on April 7.

For more on Manhattan Associates, see TechStock Radar—June 15 and April 2, 2009.
 
Wednesday, July 1, 2009, 4:31 PM — by Rob DeFrancesco, TechStock Radar
Western Digital Eyes Next Resistance

Western Digital (WDC, $26.80) closed above the June 1 high of $26.00 on Friday. After consolidating Monday and Tuesday, the stock pushed higher today on average volume. The next significant resistance stands at $29.93 from last August. For more, see TechStock Radar—June 24, 2009.
 
Wednesday, July 1, 2009, 12:35 PM — by Rob DeFrancesco, TechStock Radar
Apple Trading Update

For the latest trading up on Apple (AAPL, $144.18), Tech-Stock Prospector subscribers should see today's Rob's Journal.
 
Wednesday, July 1, 2009, 8:06 AM — by Rob DeFrancesco, TechStock Radar
FalconStor Jumps in June

Shares of FalconStor Software (FALC, $4.75) rose 29.4% in June as chatter heated up about more M&A activity in the storage sector. The stock now trades at 26X the 2009 consensus EPS estimate of 18 cents and 18X the 2010 consensus of 26 cents. FalconStor has no debt and $41.8 million in cash & investments, representing nearly 20% of its market cap.
   
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