GEO Investing

Here are some U.S.companies we are actively tracking ahead of 2010 third quarter press releases. We believe they may have a good chance to eclipse analyst estimates or are about to experience an acceleration in EPS growth.

Asbury Automotive (NYSE:ABG) (see alerts) *Price: ABG $14.78

  • The Industry leader
  • Expected to achieve three quarters of 30% + growth of EPS.
  • Revenue growth will only average about 11% in 2011
  • EPS growth begins trailing off in second quarter 2011
  • With revenues of ~$4 billion dollars it is outside our wheelhouse
  • We are curious to see if this automobile retailer will surprise the street as economy improves
  • Our fair value target if estimates are achieved- $17 to $26

Addvantage Techs Group (NASDAQ:AEY) (see alerts) *Price: $3.25

  • Two back-to-back quarters of strong sales and EPS growth
  • Still holding short term trading position
  • Company has had sporadic EPS history
  • Benefiting from cable companies initiatives to upgrade their equipment to provide HD programming. Do not know how long trend will continue.
  • Weak economic conditions have caused many customers to delay plant expansions. This is a short term negative that could turn into a positive surprise as economy improves.
  • Selling below book value of $3.18

Alpha Natural Resources (NYSE:ANR) (see alerts) *Price: $44.50 (Coded as a GeoSpecial @ $42.99)

  • Expected to achieve  six consecutive good quarters of 70% + EPS growth
  • Revenue growth will average about 11%
  • With revenue of ~ $4 billion dollars it is outside our wheelhouse
  • We like to track this company because it has indirect exposure to China

A T Cross A (NASDAQ:ATX) *Price: $5.98

  • Mundane industry
  • Revenue growth will be meager at 5% for next several quarters
  • Selling below book value of $6.36
  • Recently raised guidance
  • Buying back a significant amount of stock. Analyst estimates probably do not account for this, which could lead to upside EPS surprise.
  • EPS estimates for 2011 are calling for 28% growth

Axt (NASDAQ:AXTI) (see alerts)  *Price: $6.54 (Coded as a  GeoSpecial @ $5.20)

  • EPS growth of at least 50% for next three quarters
  • Only one quarter of next six is sub par. Second quarter of 2011 is flat
  • Has history of exceeding estimates
  • Products are a direct beneficiary of smart phone craze.
  • Outlook is strong
  • Targeting high growth areas in technology sector: Wireless, fiber optic and solar industries
  • Paying very little taxes
  • Believe it is close to short-term fairly valued on a fully taxed basis. Long-term target $9.00

Nanometrics (NASDAQ:NANO) (see alerts) *Price: $13.01  (Coded as GeoSpecial @ $12.07)

  • Has pulled back after a steady rise from when coded as a GeoSpecial at $12.07
  • Products are a direct beneficiary of smart phone craze
  • After third quarter, only two above average growth quarters left. Will need to report a spectacular quarter to gain momentum.
  • Second quarter conference call was extremely bullish
  • Agressive target- $17.00

Blonder Tongue Labs (NYSE AMEX:BDR) (see alerts) *Price: $2.35 (Coded as GeoSpecial @ $1.84)

  • Company is benefiting from a transition in its business plan, where it is switching its product offering from analog to digital.
  • Second quarter was break out quarter
  • Momentum is expected to continue through the rest of year
  • Stock is selling below book value of $3.37
  • Company is not paying taxes
  • Minimum short-term target of $6.00

Intest (NASDAQ:INTT) (see alerts) *Price: $3.07

  • Major customers are semiconductor companies. This can lead to volatile quarters.
  • After 11 straight quarters of losses the company has put together three consecutive sequentially profitable quarters in a row.
  • Comments suggest that semiconductor cycle is in an uptrend.
  • 2010 second quarter was a dramatic quarter. We were unable to gauge if these levels will be maintained.
  • Conference call was bullish, but tempered.
  • Guidance for the 2010 third quarter is wide, but still implies strong comps.
  • Any talk of sustained optimism could send this stock to much higher levels.
  • Not taxed
  • Agressive short-term target if EPS targets are met- $6.40

Magic Software Entrs (NASDAQ:MGIC) (see alerts) *Price: $2.59

  • Cloud computing
  • Has experienced three consecutive quarters of dramatic EPS growth.
  • No guidance
  • Fourth quarter will be a tough comp.

Amtech Systems (NASDAQ:ASYS) (see alerts) *Price: $17.35  (GeoSpecial @ 11.27)

  • Has pulled back after a steady rise from when coded as a GeoSpecial at $11.27.
  • Second quarter was extremely bullish
  • Contract backlog is at record high, given us some confidence that estimates can be exceeded.
  • Three of the next 5 quarters are expected to show impressive growth. A lull is expected to occur in the second quarter of its fiscal 2011 second quarter.
  • Fiscal third quarter conference call was extremely bullish.

Orbit Intl (NASDAQ:ORBT) (see alerts) *Price: $3.29

  • We are still waiting for ORBT to turn the corner. Which could still be one quarter away.
  • Could be a nice sleeper stock once it turns this corner

Whx Corporation (NASDAQ:WXCO) *Price: $10.37

  • New on our radar due to a huge 2010 second quarter.
  • We are not sure if the quarter is repeatable, since no guidance was provided and securing an interview has been difficult.
  • Eager to see if 2009 third quarter financials will continue trend
  • No analyst coverage

*Prices are as of business close on Friday, October 22, 2010
Disclosure: Long AEY ATX AXTI NANO BDR INTT MGIC ASYS ORBT

Disclaimer

You agree that you shall not republish or redistribute in any medium any information on the GeoInvesting website without our express written authorization. You acknowledge that GeoInvesting is not registered as an exchange, broker-dealer or investment advisor under any federal or state securities laws, and that GeoInvesting has not provided you with any individualized investment advice or information. Nothing in the website should be construed to be an offer or sale of any security. You should consult your financial advisor before making any investment decision or engaging in any securities transaction as investing in any securities mentioned in the website may or may not be suitable to you or for your particular circumstances.

1 Comment

  1. Pingback: WordPress › Error

    There has been a critical error on this website.

    Learn more about troubleshooting WordPress.