Tuesday, October 25, 2016
3Q Earnings Release (NCI)
Navigant reported revenue and EPS beats over the street's estimates.
Key highlights include:
Revenue before reimbursements increased 13%, with 10% organic growth y/y
Net income was $17.2M, compared to $14.2M y/y (21% increase)
Majority of the revenue increase stemmed from the Healthcare and Financial Services Advisory segments. Financial services advisory experienced a 49.3% organic increase in segment revenue y/y, and the health care segment posted 23.8% increase in revenue y/y, which is a combination of acquisition and organic growth. Company operating margin increased to 35.4% which is a 170 bps increase from last year.
Cash flow was again positive, and free cash flow was $25.5M for the quarter. Bank debt decreased by $28M sequentially..
As a result of the positive results, NCI also increased guidance to the higher end of their previously recorded guidance.
As a result of the earnings release, the market responded very favorably with an 12% increase in share price at the time of writing this report. At this time, the positive is above price target and I recommend that we sell the position to secure upside.
Michael Lorka
Tuesday, June 14, 2016
Nautilus Inc. (NLS) May Monthly Report
The University at Albany School of Business Investment Group
purchased 205 shares of Nautilus Inc. (NLS) stock on Friday, May 6th
at a price of $17.04. Following a strong post market earnings call on Monday,
May 9th the group purchased an additional 100 shares at $20.13 and
75 more at $20.16. Nautilus performed well in May, moving up 13.4% in the
month. The combination of strong price performance, strong earnings, and
favorable guidance caused the stock to surge. The company’s future is still
bright with recent acquisitions of Octane Fitness which compliments Nautilus’
already strong brand offering. Currently the stock is priced at $19.14 (down
4.40% on 6/14 with no public explanation) with a price target of $22.59. Our
investment thesis is still intact and the stock should bounce back in the near
future.
Cerner May Monthly 2016 Report
Cerner May Monthly Report
During the month of April we purchased 60 shares of Cerner
(representing a half position) at $56.60. Cerner opened the month on May 2nd at
$56.96. Cerner closed on May 31st at a price of $55.61. This
represents a 2.37% loss over the course of the month as well as a -1.75% loss
since purchased at 56.60.
On Friday May 19th, we completed a full position
in Cerner by purchasing 60 additional shares at $54.40. This represents a 2.03%
gain, nearly offsetting our loss from the other half position.
With a price target of $72.17, $29.77 upside remains. The
main reason Cerner’s did not gain upside during the month of May was because
its first quarter financial results did not exceed expectations. Cerner’s clinical
information and services struggled to meet revenue expectations. In the quarter
one earnings call, management lowered guidance for their clinical information
and services resulting in their expectations being set very low. This leaves
plenty of room for organic growth to materialize as well as prevent another
miss on expectations. Earnings have a huge influence on the price of a
companies stock and can be a catalyst for momentum. I believe Cerner will exceed
their outlook with expectations being set low. This will result in Cerner’s
stock price appreciating at a constant rate over the next quarter.
Wednesday, June 1, 2016
KORS Q4 2016 Earnings
Today, June 1st, before the markets opened, Micheal Kors Holdings Limited released their Q4 2016 earnings at $0.98 a share, topping analyst projections by $.02. The Revenue rose to $1.2 billion, compared to $1.08 billion year-over-year. KORS also beat revenue estimates that projected that the company would earn $1.15 billion. Retail net sales increased by 22% this past quarter, partly due to new store openings. KORS has also Michael Kors LTD., gaining the exclusive license of Chinese products, as well as other Asian jurisdictions for $500 million in cash. The company has also come out and issued a weak guidance for the current quarter (Q1 2017), projecting below analyst estimates for EPS and Revenue. KORS projects an EPS of $0.70-$0.74 with revenue between $940-$950 million range as analysts project an EPS of $0.94 and a revenue of $1.03 billion. The reason for this weak guidance spans from an expected increase in expenses on global investments as well as new stores, infrastructure and distribution and a few other variables. They have also announced a new $1 billion share buyback program to replace the previous buyback program from 2014. In light of the earnings report, KORS stock saw a 10% increase pre-market and is currently up around 7.5%.
Tuesday, May 10, 2016
ATVI Q1 2016 Earnings
On May 5, Activision Blizzard reported Q1 2016 GAAP Earnings
per share of $0.45 and Revenue of $1.46 billion. They reported non-GAAP EPS of
$0.23 and Revenue of $812.1 million, exceeding analyst’s expectations of $0.12
and $812.12 million, respectively. The company reported strong Monthly average
users (MAUs), totaling 544 million. Total MAUs can be broken down as follows: Activision-
55 million, up 10% from last year, Blizzard- 26 million, up 23%, and King- 463
million, up 3% from the previous quarter. Activision also continues to have
four of the top 10 games on next-gen consoles, and King had three of the top 15
grossing titles in U.S. mobile app stores for the ninth consecutive quarter. Activision
Blizzard didn’t have any major new releases during the first quarter, but did
issue a second expansion pack for its highly popular “Call of Duty: Black Ops
III”. ATVI shares were up 4.1% at $36.35 in after-hours trading, up from its
closing price of $34.85. The stock ended the week strong, closing the post
earnings trading session at $37.45.
AT&T Q1 2016 Earnings
Post market close on April 26th, AT&T
reported first quarter adjusted earnings per share of $0.72. This represents a
year over year increase of 10.8%, and exceeded analyst estimates of $0.69. They
reported Revenue of $40.54 billion, up 24% year over year- largely attributed
to the acquisition of DIRECTV in July of 2015. They continue to show margin
growth, reporting an operating margin of 17.6%, up from 17.1%, with margin
expansion in every domestic business segment. Operating cash flows were up more
than $1 billion from Q1 2015, reporting free cash flow of $3.2 billion,
representing a year over year increase of 17%. They reported operating expenses
of $33.4 billion, up from $27 billion in the same quarter last year. Operating
income was reported at $7.1 billion, up 28% from Q1 2015. Despite an otherwise
successful quarter, the wireless business lost 363,000 mainstream phone
connections, exceeding the 200,000 mainstream phone loss that had been
expected. They also lost 54,000 video subscribers, even with gains at DIRECTV. The
stock opened the following day slightly lower at $37.95, but hit an intra-day
high at $38.89, and then ended the day at $38.73.
Monday, May 9, 2016
Cerner - April Monthly Report & Current Outlook
Cerner Corporation
CERN
Michael Skluth
5/9/16
April Monthly
Report & Current Outlook
I reiterate a BUY rating a Cerner.
Cerner released Quarter 1 earnings results on May 5th,
2016. Cerner opened on the market at $53.25 on May 6th, 2016. They
missed their revenue guidance due to the fact that their hardware sales didn’t
materialize as expected. Cerner decreased their guidance for revenue next
quarter by 25 million to ensure that they will not miss earnings. Management
has expressed difficulty in the ability to predict hardware sales so that is
why they wanted to go with a conservative outlook. Cerner has strong revenue
visibility as 79% of backlog is going to be realized. Since this signifies the
majority of Cerner’s business, it provides a lot of room for revenue deriving
from technology resale to beat expectation by.
On April 8th, 2016, we bought 60 shares of Cerner
at a price of $56.40. Cerner closed the month of April at $56.14, representing
a -0.46% decrease in the stock price. With a price target of $72.41, 29.98%
upside still remains. Again, with a price target of $72.41, buying in at the
current price of $55.43 would generate 30.63% upside. I believe this is an
ideal time to complete our full position Cerner.
The main reasons include the organic growth of the business,
competitive advantage, and untapped markets. Organic growth represents that
many of their key recent partnerships and acquisitions will materialize and see
the market in future quarters. I believe these have not been priced into the
stock and when these revenues are realized, it will result in the price of the
stock increasing. Cerner announced on April 20th, an acquisition of
Universal Health Systems. Universal Health systems provide great expertise from
a billings perspective. Cerner has a lot of experience with the service and
development portion of the business so this strategic acquisition supplements
Cerner’s model perfectly. As the
industry digitalization of the healthcare industry continues to evolve,
consumers will need an integrated clinical and financial system together. This
will ultimately lead to the development and implementation of bundle payments
and at risk models.
There are opportunities in untapped markets in the industry
that Cerner is putting itself in as strong position to take advantage of. The
main untapped market is state and local governments. Management expressed
confidence that the public is due to hear about key business in this
market. Cerner takes pride in their data
liquidity. Data liquidity is their ability to easily access and handle the
diversity of the data. For example, technology systems within companies vary
drastically.
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