Tuesday, December 24, 2013

Google Inc.

Google has surpassed our former price target of about 1074 US dollars and is currently sitting at $111.84 per share.  As a result we have gone back into the model to revise some estimates. We believe that Google is a hold for the time being. The company still has so much potential and is constantly searching for feasible new revenue streams. They just launched their cloud platform, an industry that has been enjoying profits despite increasing entry, and they have many other projects and acquisitions in development. These include but are not limited to, Google Glass, their self-driving car, and of course their recent acquisition of the reputable robotics firm, Boston Dynamics. We believe that Google will see success in a lot of its new ventures as well as continued increases in their ad revenues but despite all the positive sentiment for this technology giant there are still things that can negatively affect Google’s share price in the future. The probability of success for Google’s Motorola segment is still unknown and this can potentially hurt earnings. The same story applies for any of Google’s various new business ventures that may just result in unneeded R&D costs along with other expenses that decrease their bottom line. Although confidence remains in the company to succeed and be able to introduce some new disruptive technologies to the market in the long term, Wall Street is going to continue placing very high standards on the 1000+ dollar per-share company and the possibility of them missing earnings in the shorter term is very realistic. Also all of the NSA spying allegations that we hear more about every week are sure to hurt the company’s share price. At the same time this will help keep multiples at a more realistic level and prevent an explosion in share price that isn't backed by the company’s performance and the value that Google can bring to shareholders. Google is currently trading at around 31.3x its trailing twelve months earnings. This multiple has made a hefty climb up from the 22.2x that it was trading at when the year began and is trading about 41.5% above its 5 year average P/E of 22.12x (TTM). We are hesitant to go and increase EPS estimates as many analysts have been doing but the P/E multiple used in our valuation was increased because Google along with its peers have seen much higher multiples throughout 2013. We think that this is justified in Google’s case. I have arrived at a new price target of $1,300.00 per share for the time being. We consider this a very modest estimate considering our EPS is below consensus and a P/E multiple of 26.07x was used. This increased multiple was arrived at by taking 10% less than the average between Google’s five year mean and the mean among some of its most closely comparable peers. The tablet and mobile markets are rapidly expanding as consumers are buying more and more tablets and mobile devices rather than PCs and the Android operating system is installed on over 80% of all these devices. If the company meets EPS consensus of around 44 for FY2013 next earnings call this would imply a price of 1147.08 using our P/E and if its multiple continues in the low thirties then the price per share will get above $1300 a lot sooner than we think. The emphasis on P/E is due to the fact that it represents 50% of the weight in our valuation. 15% of the valuation is dedicated to the Enterprise Value to EBITDA ratio, for which we use a multiple of 20.73x. I have not altered this multiple as it represents only a slightly higher level than the average among Google and their peers. The other multiple that holds a significant weight in our model is price to next twelve months free cash flow (P/FCF). This multiple was increased in the same exact fashion as price to earnings and makes up 25% of our valuation. We currently use a P/FCF multiple of 19.46 times the next twelve months free cash flow, which is not much higher than Google’s five year average for the multiple which is 17.16x free cash flows. Our free cash flow projections are 23.236 MM and 26.159 MM for 2014 and 2015 respectively. The remaining 10% of our valuation is represented by our DCF valuation which provided with us a price of only 961 dollars per share. This value would increase with an upward revision in earnings, but again, we are hesitant to being overly optimistic. Still, Google is one of the strongest companies in the world and although an EPS miss and overvaluation in the short term is worrisome, there is too much exciting news that comes out about this company and people seem to be on the edges of their seats waiting to see what it will do next. Our price target still represents an upside of 16.9% and a further upward revision on the price target is still on the table. The market overall has been responding very well to the interest rate increases along with the budget deal but the impacts and details of the budget deal are still under scrutiny. Equity prices across the board will most likely see some decreases because some demand is sure to shift to risk free/ low risk bond investments. Still, if interest rates increase slowly and transparently the allure of high returns in the stock markets should keep current demand intact in the short term at least.

Sunday, December 22, 2013

Spirit Arilnes

Spirit Airlines increased 4.11 percent December 20th due to the new U.S budget deal.  The U.S budget deal consisted of U.S airlines repealed and won $380 million in fees that they pay for aviation security every year. The previous deal consisted of passengers paying $2.50 per flight segment or a maximum of $5 each way. The new aviation charges will increase significantly to $5.60 each way of a trip which is a mammoth win for United States airlines.  The Transportation Security Administration aviation security costs covered by fees will rise from 30 percent to 43 percent under the new agreement, stated the House of Representatives. Passengers will now have to pay more than half of their previous costs to continue airport security that includes passenger and bag screening.

All in all passengers will be required to pay extra for security purposes and don't have a choice if they want to travel with U.S airlines.  The new aviation security fee is to be repealed on October 1st, 2014.  While reaching this deal congress agreed to eliminate one of the 17 unique taxes on the aviation industry.  The TSA has never increased aviation security costs since it was first established after the 2011 terrorist attack and they agreed that with a significant amount of technology improvements and high technology explosive scanners.  In my opinion I believe that this new deal with have an affect on the majority of the U.S airlines and a key factor to keep in mind is if increases in taxes for passengers and fees will result in decreases in air travel.  However I believe it will have minimal impact because I strongly believe that passengers will comprehend that if they demand increases in security and airport safety this new deal was necessary and passengers will continue to travel especially under the new aviation costs standards, they don't have many ways to work around it if they want to travel.

-Guillermo Dilone, Junior Industrial Analyst

Monday, December 16, 2013

Anadarko Petroleum Sell Thesis

Anadarko Petroleum Corporation reported their third quarter earnings which climbed 50% due to higher oil sales boosting its sales results. The company’s oil and condensate sales rose by 10% to $2.39B because volume grew to 775k which is up from 739k a year earlier. The company also saw that its Quarter three onshore sales volumes rose by 61k a day and also is because of a 16% rise in liquid volumes. The company initiated well completion activities at 80k a day in the deep-water Gulf of Mexico. The project remains on schedule, with the first oil production expected during 2014. The company did lower its full-year sales volume guidance, now expecting 281M-284M. Though all this positive Quarter three news, The Company is still undergoing some serious financial troubles due to a pending lawsuit.
Andarko Petroleum Corporation (APC) and its Kerr-McGee Unit, Acted improperly in its spinoff of Tronox Inc., in 2005. This improper dispensing of Tronox may lead Andarko to have to pay as much as 14.12B Dollars in Damages for environmental clean up as well as health claims. Last night (12/13) the stock plunged 9.3% and reduced its Market Value down to 38 Billion. This case became a threat to the company when yesterday when the judge was trying to decide how much money can be recovered from the successor to a polluting company even after bankruptcy has cleaned up whatever obligations the company may have as far as debt. This case originally stems from Kerr-McGee’s spinoff of its chemical business and environmental liabilities as Tronox in the beginning of 2005. Just over three months after the transaction took place, Anadarko offered to buy Kerr-McGee’s oil and Natural Gas Assets.  Because of this pending lawsuit, I believe the time is right to sell the company because the company does not have the assets to sufficiently pay off this lawsuit without it impacting its stockholders.
 -Andrew O’Brien, Junior Energy Analyst

Wednesday, December 11, 2013

Masimo Launches New Product to Reduce Global Newborn Mortality

Masimo on Friday Dec. 6 announced the launch of iSpO2™ Rx Pulse Oximeter with M-LNCS™ connector.  The new product enables adhesive use on newborns for accurate and cost-effective screening with mobile devices in low-resource settings.  The new technology has shown through studies to be the most accurate pulse oximetry during challenging conditions and has proven to help physicians in identifying life-threatening conditions in newborns.  Pulse oximetry is a noninvasive method of monitoring a patient’s O2 saturation, pulse rate, and perfusion index.  Globally, about 3.3 million newborns die within the first month of month of life.  Pulse oximetry is critical for newborns in determining the early onset of neonatal infection, sepsis, pneumonia and birth defects among other major killers.

On Friday Dec 6. At around 2PM Masimo’s stock quickly appreciated following the announced launch of iSpO2 Rx.  iSpO2 Rx’s launch is unique to its competitors in its accuracy and cost efficiency to monitor newborns in low resource environments.  The device adhesive sensor attaches across the infant’s foot and has capability to wirelessly transfer test results to an iPhone, iPad, iPod touch, and soon Andriod.  These key features are completely new to this category of devices.  iSpO2 Rx is currently also available outside the U.S.

Moving forward iSpO2 Rx serves as the lynchpin of an ongoing collaboration with the Newborn Foundation and marks the debut of the BORN Project (Birth Oximetry Routine for Newborns).  Masimo’s collaboration with the Newborn Foundation marks the first global health initiative to reduce infant mortality through access to mobile-enabled technology.  Masimo’s iSpO2 Rx currently the clear leader in this category.

Friday, November 22, 2013

Target misses earnings with trouble from Canada

Target released its third quarter earnings Thursday November 21st which missed estimates. They reported U.S. and Canadian net earnings at $341 million, 54 cents a share which is down from 96 cents y-o-y. Sales rose 4% y-o-y and total revenue grew 1.9% y-o-y but still fell short of consensus. Gross margins in Canadian operations came in low at 14.8% due to their efforts to clear excess inventory. Target shares closed Thursday at $64.19, down $2.30 or 3.5 percent. Canadian operations reduced Target’s earnings by 29 cents per share due to challenges that are arising from its new stores. Canadians have complained that Targets prices are higher in Canada then they are in the U.S . On top of that Walmart dropped thousands of prices before some of Targets new stores even opened up in Canada. Target still plans on finishing opening a total of 124 stores by the end of 2013 with hope that in the long-term they will be successful. Gregg Steinhafel, CEO, said "As we gain experience in operating Canadian stores and accumulate sales histories by item by location, inventory flow and allocation will become much more reliable and accurate, setting the stage for improved sales and operating efficiency in 2014.” In fourth quarter the Company expects adjusted EPS of $1.50 to $1.60, with the Canadian Segment loss of 22 to 32 cents. For full-year, Target now expects adjusted EPS of $4.59 to $4.69, with the Canadian Segment loss of $0.95 to $1.05. Target is facing many challenges assimilating into Canada culture and in the U.S. where income is stagnates and growth is slow. The reasons that I purposed we should buy into Target are no longer true, therefore, I believe we should sell it. -Kristen Pfaffe

Tuesday, November 12, 2013

Qualcomm 4Q13 Earnings: Light Guidance, Looking for Exit Point

Qualcomm Inc. reported 4Q13 and yearly earnings on November 6 and held a corresponding conference call at 4:30 E.S.T.  Yearly revenue came in at $24.87BB which is slightly above our estimate of $24.6BB and street consensus of $24.7BB up 30% versus last year.  Quarterly revenue came in at $6.48BB verse our expectation of $6.21BB and street consensus of $6.34BB up 33% yoy while Non-GAAP EPS was reported at $1.05 up 18% yoy, slightly lower than our $1.08 estimate and street consensus of $1.08 as well.  If not for legal charges stemming from the patent case with Parkervision, Non-GAAP EPS would have been $1.15 up 29% yoy.  Revenue was driven by strength in Qualcomm’s licensing and semiconductor business as well as strong 3G/4G device growth.  Dividends were increased for the 11th consecutive year and approximately $3.9B was returned to stockholders between buybacks and cash dividends during the fourth fiscal quarter. 

Not only did Qualcomm deliver its industry leading third generation 3G/LTE multi-mode modem, but they were successful in growing their share of semiconductor content in multiple devices and expanding their licensing program.  Numerous products based on Qualcomm products were also launched taking advantage of new capabilities including HD video and LTE carrier aggregation.  The growth of tablets has also contributed to Qualcomm’s success.  Popular devices including the Google Nexus 7, Kindle HDX, LG G Pad, and the Sony Xperia Z all contain Qualcomm processors.  In addition to these new devices, new plans forcing people to upgrade to 4G LTE have sparked growth in Qualcomm.  With a monopoly in processors across the largest manufacturers in the phone and tablet market, Qualcomm is poised to continue with great success.

Looking ahead a plethora of new innovations combined with an emerging smartphone/tablet market and focus on cost cutting poise Qualcomm for another successful year.  Qualcomm expects solid growth but at a lower rate based on the exceptionally strong numbers in 2013.  Approximated 225M smartphones were shipped in Q2 of 2013 representing a 47% yoy increase.  It is expected that 1.8B smartphones will be shipped in 2017, representing a substantial growth in the smartphone market.  Another catalyst is the expansion of LTE.  Approximately 100M new LTE connections are expected by the end of calendar year 2013.  Expansion of LTE into China is a huge opportunity that Qualcomm plans to take advantage of in 2014.  Qualcomm anticipates strong growth in low and mid-tiers driven by the launch of LTE in China.  Growth is seen in China across all smartphone tiers, leading to Qualcomm’s Emerging Accounts to exceed $1B in revenue in 2013.  To complement the expansion into flagship smartphones and tablets, Qualcomm is slowing the growth rate of their spending.  They have projects underway to improve product costs within QCT including driving supply-chain efficiencies and designing cost optimized solutions.

While we applaud a solid FY13 and quarter end excluding the Parkervision patent case we are displeased with the light guidance provided juxtaposed against a slight decrease in average selling prices.  Historically the stock has sold at a 5 year average of 24.9x ttm earnings.  Currently the stock is valued 13.3x our FY14 EPS of $5.18 well ahead street consensus at $4.93.  While we remain constructive on the name we are looking for an exit point upon the sale of the North and Latin American operations of Omnitracs scheduled to close in 1Q14.

Saturday, November 9, 2013

Atwood Oceanics Q4 2013 Earnings

On November 7 after the market close, Atwood Oceanics Inc. (ATW) released its Quarter 4 earnings to the public.  The company reported Diluted EPS of $1.57 on revenues of almost $293 million.  Their EPS beat consensus estimates by $0.06.  Shares jumped 3.32% during trading on Friday, November 8.

Atwood’s is executing is goal perfectly to employ a high-specification fleet.  Revenues have risen 65% over 2011 levels and 35% over 2012.  This number should continue to rise as a result of higher day rates and a drilling fleet with increasingly high specifications.  In 2014, the company is set to add an additional two ultra-deewpater drillships to its fleet.  These are the rigs that result in the highest contract day rates.  Management is observing increasingly high demand, leading to increasing day rates, for the high specification jackup rig segment.  Concerning ultra-deepwater drillships, management has seen some cooling off of demand.  This, however, should not negatively affect the company’s day rates secured on its rigs coming due.

In the past quarter, Atwood finalized contracts for the sale of the Atwood Vicksburg and the Seahawk.  These were two of the company’s oldest rigs, and these actions are consistent with the plan to have newer and more improved rigs ready to be leased to customers. 

Management is expecting another strong year for FY 2015.  Not much has significantly changed from the past quarters and year with regards to the offshore drilling market.  Also, the company believes its marketing team can continue to pursue and secure new contracts and contract extensions for its rigs.

I would like to reiterate a BUY rating on this stock.  

-Nick Randone

Thursday, November 7, 2013

Masimo Corporation Report 3Q2013 Earnings

Masimo Corporation (MASI) reported 3Q13 earnings after market close on October 30th 2013, posting great results from the perspective of both the financial end and the health of their product line.

From an operational and client standpoint, MASI has gained quite the traction in the past three months. New implementations of technologies into their operational business model is giving MASI a more effective and efficient workplace. In conjunction with new operational capabilities, MASI has also added new customers with major clinics and hospital, including U.S-based hospital St Joseph Health, a large hospital system with 14 major hospitals, and over 4,000 patient beds. But what is more impressive: their ability to retain clients, resulting in a recurring stream of revenue. As new clinical studies post more and more positive results, practical product use, and cost efficiency, MASI retention of clientele is improving.

Positive clinical value from their Signal Extraction Technology (SET) and rainbow SET products proved that the product was a good addition to their portfolio and it continues to strengthen their potential for future revenue generation. Market share gains are driven by the innovation for a company, which is something MASI does not lack. Driver, including rainbow product sales and new shipments of products, are rising substantially. Compared to the same quarter last year, they posted a 33% y-o-y drive growth, attributed mostly to new pulse oximetry contracts, and installation of products in general wards.

On a segmented basis, product revenue was up 11.1% to $124.5MM, weakened by nearly 2% due to a weakened yen, reducing product revenue by $1.8MM. Rainbow product saw another quarter of growing figures, posting a 9.0% growth in 3Q to $12MM, due to “higher instrument and board” revenues, and increased acceptance of original equipment manufacturers (OEM). Direct business, which comprises of 85% of total product revenue and OEM sales, which comprises of 15% of total product revenue, both grew by 12% and 7%, respectively.

On a consolidated basis, total revenue for 3Q grew by 10.4% to $131.4MM vs. $119.0MM last year, falling short of our estimate of $133.8MM and Street estimates of $132.5MM. Gross margin expanded 80 bps to 66.6%, due mostly to a smaller portion of royalty payments attributed to total revenue. R&D expenses increased 13% y-o-y, mostly attributed to new engineering staff and product development. Net income for the quarter was $15.6MM, a growth of 13.1% vs. last year. EPS on a non-GAAP basis were posted at $0.27, a 14.6% growth, in-line with my estimates, and besting street estimates of $0.26.

Due to a positive quarter, EPS for FY13 is being restated to $1.16, from $1.14. All other estimates remain the same, including full revenue and a goal of $50MM attributed to the rainbow product line. It is important to note the new “breakthrough open architecture monitor and connectivity platform” known as Root. It is an information-hub that is integrated into all products that can easily display figures on a screen for easy reading.

Despite the positive news, MASI shares fell. Nothing struck me as “negative” news in their transcript or press release. When researching deeper, the reasoning behind the fall in share price was due to a 20% increase in short sellers. Finally, the company is beginning to rebound in price.

Wednesday, November 6, 2013

Anadarko Petroleum Reports Q3 Numbers

Anadarko Petroleum (APC) reported non-GAAP earnings of $1.13 per diluted share on revenues of $3.9B in quarter 3 of 2013.  Earnings were up 34.5% compared to 2012 numbers, however the company missed estimates by $.03.  The increase in revenue was driven by a 31.3% increase in natural gas sales and a 10.7% increase in liquids sales. 
We witnessed increased sales volumes amounting to 71 million barrels of equivalent, which was 3 million more than in 2012.  A staggering of production from their Wattenberg, Eagleford, and East Texas horizontal assets caused this increase.  Anadarko realized higher crude prices than anticipated as the average barrel went for $106.05, while natural gas prices were still low at $3.33 per thousand cubic feet. 
Operating costs rose substantially to $3.16 billion, which was a rise of 25.8% because of increases in oil and gas operating expenses and marketing expenses.  Due to this enormous increase in expenses, operating profit was down 15.6% to $689 million.  

Friday, November 1, 2013

Spirit Airlines (SAVE) Q3 Earnings Release and Price Target Increase

Spirit Airlines reported strong results this past Wednesday that beat consensus as well as our estimates. Revenue of 456 million was an increase of 30% year over year, a result primarily of volume growth of 28%, and 2% related to pricing. Additionally, Earnings per share was reported at $.79 a $.04 beat on consensus, and beating our estimates by $.01. The strong quarter was primarily priced in after Spirit announced in early October that revenue per available seat miles increased 10%, almost double the guidance management set of 4%-6%. As a result, Spirit saw very volatile trading throughout the day, as the stock increased as much as 6% at the open, and declined approximately 10% at the lows of the day. The stock eventually recovered and closed only .5% lower. The stock trading down was most likely a result of a mix in profit taking, and guidance that wasn't quite as optimistic as investors had hoped.

2013 traffic growth is now expected to reach approximately 25%, with full year income increasing 30%. However the 2014 guidance was a little lighter than would have hoped. Air traffic growth is expected to grow 15% for 2014, resulting in a 20%-22% increase in full year EPS. Additionally, costs per available seat mile (CASM) is expected to be a challenge in the first and second quarter, after a decreasing CASM in 2013. This is still strong growth, outpacing the industry, however it was expected that the numbers would come in slightly higher.

After the strong Q3, a projected comparable Q4, and tempering our 2014 outlook to numbers that are still strong, we have increased our price target on Spirit to $49 from $42. We believe our thesis of growing market share by having the lowest fare prices and lowest cost in the industry and expanding into newer domestic markets remains intact, and reiterate our Buy rating.

Sunday, October 27, 2013

Cerner Corporation 3Q13 Earnings: EPS in Line, Tepid Guidance, Neutral Rating

Cerner Corporation reported earnings October 25th and held a corresponding conference call after market close at 4:30 E.S.T. Revenue came in at $728.0MM up 8% yoy, shy of our bullish $771MM estimate. Lower technology sales had an impact on revenue but the impact on earnings was limited. Non-GAAP EPS was reported at $0.35 which is up 17% compared to 3Q12, shy of our estimate of $0.38 but in-line with street consensus of $0.35. In 3Q13 $28 million worth of shares were repurchased bringing year to date purchases at $170 million completing the share repurchase program authorized last December. In addition, 3.6 million shares have been repurchased post stock-split. 

Q3 highlights involve international opportunities for the firm. Cerner has gained clientele at two prestigious hospitals, CHU de Nantes in France (6th French client), and their first Brazilian client, Albert Einstein. Brazil is an emerging area of opportunity with 7,000 hospitals having limited EMR penetration. The company has also signed its first contract with the Saudi Arabia ministry of health as part of a plan to cover 200 public hospitals across the country. Domestically, Cerner had a big win with Salt Lake based Intermountain Health Care against their main competitor and look to this project as an opportunity to create a unique new system. The depth and breadth of Intermountain’s information provides a challenge for Cerner and calls for innovation to solve this issue of managing the information and keeping up Intermountain’s high quality standards. Cerner has also continued success with small hospitals, adding six new clients using their CommunityWorks software suite. The cloud-based platform Cerner has released has been able to become compatible with non-Cerner systems, allowing more flexibility for clients. Also, Cerner has become an authorized reseller for all apple-computing products, which will streamline the purchasing and deployment of devices to clients.

Initial Q4 guidance was offered at sales of $775MM-$815MM up 12% yoy at the midpoint and Non-GAAP EPS of $0.38-$0.39 compared to our estimates of $850MM and $0.45 EPS. While the Quarter offered highlights of strategic wins, looking forward we are disappointed with the light revenue guidance. Lower technology margin resale was noted as impacting revenue and Q4 will be the last quarter with a tough comparable technology resale comp. We will be selling out of our position and maintain a neutral rating on the stock.

Our decision to sell out of Cerner is based largely on valuation. Historically the stock has sold at an average of 35.5x times trailing twelve-month earnings. Currently the stock is selling for 44x ttm earnings, which represents a significant premium, indeed (close to peak) for Cerner. This premium is justified due to a Class A management team, leading market position and capitalization of domestic and international growth opportunities. However, the current premium valuation against what we expect will be another lower-than-expected revenue result in Q4 is not likely to lead to multiple expansion in the near term. The stock is now valued at 41.2x our FY13 EPS estimates. While there are still significant merits to our long-term investment thesis, in lieu of the recent earnings report we are not convinced that material multiple expansion in Q4 is likely, and remain on the sidelines for a more attractive entry point.

-Jeevan Sunny

Wednesday, October 23, 2013

Masimo Posts Positive Clinical Results; Earnings Call and Results Scheduled

The American Society of Anesthesiologists Annual Meeting, held in San Francisco, CA, presented the benefits for Masimo Rainbow Acoustic Monitoring (RAM) and Pleth Variability Index (PVI). 

Acoustic Respiration Rate (RRATM) is a measurement that captures and analyzes the trends of a person’s breathing, increasing the rate of respiratory problem detection juxtaposed with effective patient pain management. In conjunction with Masimo’s revolutionary Signal Extraction Technology (SET), the RAM device noninvasively monitored respiration rate by comfortably sitting on the neck of the patient. The measures are continuously captured for better detection of irregularities in ones breathing capabilities. Three clinical studies were performed thoroughly at three different locations – Stanford University Medical School, Loma Linda University Medical Center, and Tokyo Women’s Medical University – all of which proved RAM to be more effective than its competitors, including Covidiens Capnostream. Results seemed to be quite uniform, with a similar trend of high accuracy of respiratory problem detection and lower probabilities of errors.

PVI, a continuous measurement which assesses fluid status and administration in a patient, also proved to be quite beneficial. It is critical to a patient’s health, as poor fluid levels or inconsistent flow of fluid inflow on a patient undergoing surgery yield increased problems. Because it is noninvasive, the costs for hospitals and private clinics are much lower than some of the invasive counterparts. It concerns the relationship balance of airway pressure and fluid levels pumped into vessels. It can help predict and prevent cardiac failure and hypovolemia, a state of shock that induces decreased blood volume pumped into the body from shock of blood loss or sickness. The Study at the University of California Irvine Medical Center evaluated the reliability of fluid optimization, concluding that “Goal-oriented fluid optimization based on respiratory variation in the pulse oximeter waveform is feasible, and may help to standardize intraoperative fluid management”. 

Masimo will report 3Q2013 earnings after market close next Wednesday, October 30, 2013. I am estimating revenue increasing 12.4% to $133.9MM, vs. $119.1MM last year, largely in-line with street consensus of $132.5MM. EPS is expected to increase 13.9% to $0.27 vs. $0.24 last year, a bit higher than Street consensus of $0.26. My price target stands at $31.00, but is subject to potential revaluation due to both increased positive scientific and financials results.