March 16, 2011

Recent Buys: March 9-16

Here are stockgage's recent buys:

Speculative pharma buys:  

DUSA - solid earnings, potential for growth good. Bought after earnings when stock fell a little bit due to (possible) improper trading/profit taking pattern. Called  @3.89-4.04 range.
Added more  @ 4.17. Initiated on March 10th 2011

SUPG - Company reported good earnings. Also, noticed recent change in director compensation/involuntary termination etc. Almost seems like poison pill/takeover protection clause. Speculation of GSK or other big pharma attempting a buy is reasonable. Went long ~2.90 range. March 11th 2011.

CLDX: Pure speculation. although company earnings were good!

Panic Buys (Market panics, we buy): March 16th 2011

URRE - (Went long Oct 2.50 options) @ stock 1.65. Lot of specuative trading going on in this stock. Huge selling on Mon/Tuesday followed by buying and shorting/short covering - everything happening. Once the dust clears and regular business information comes back, it has chance to turn a winner.

DNN  Market panics we buy). Same analysis as URRE above. Denison is a more reliable business. Company managed recent round of financing. If India and China continue growth in their nuclear sectors, prospects favorable.

CSCO May 20 calls. Initiated in mid March 2011. We will see what happens. Last time we initiated CSCO calls in December they paid off very well by early Feb - and a good thing we exited before earnings.

Takeover Speculation Buys:

MENT: After Icahn's fake bid and realignment of big shareholders it is a wait and watch game. Initiated @15.5

LAVA: A higher change of this company being taken over by one of the players in the EDA market. Initiated@ 6.30.

Conviction/Solid Prospect Buys
NOTHING in the Stock market is solid. Please don't be fooled by the language used by GS unless you have millions with them and they send you secret coded messages with buy signals.

AKAM or its competitors (Limelight, LVLT).. which one would soar or be bought out soon.. Any suggestions? Please comment
Update: went long on June/Sep out of money calls of LVLT and LLNW. Went long AKAM @35.19 - on March 16, 2011

Akamai is a fundamentally well managed company performing much better than its peers. Check out the data on the margins below. So it is a good business. Especially with the valuations being knocked back down to current levels, it is an attractive buy. AKAM doesn't pay dividends though. Data source; Scottrade

ProfitabilityAKAMAKAM PeersIndustry Average
Gross Margin (TTM)70.36%57.02%39.25%
Operating Margin (TTM)24.81%-22.46%-6,039.17%
Pretax Margin (TTM)25.63%-38.56%-6,844.29%
Net Profit Margin (TTM)16.73%-40.14%-6,843.02%
ValuationAKAMAKAM PeersIndustry Average
P/E excluding extraordinary items (TTM)39.6x0.0x0.0x
P/E Normalized (MRFY)39.6x21.7x52.1x
P/Sales (TTM)6.5x2.2x864.1x
P/Tangible book (TTM)4.0x13.3x15.7x
P/Cash Flow (TTM)21.3x17.1x32.2x
Financial StrengthAKAMAKAM PeersIndustry Average
Current Ratio (MRQ)5.911.323.66
Quick Ratio (MRQ)--0.433.01
LT Debt/Equity (MRQ)
Total Debt/Equity (MRQ)0.001.510.67
Payout Ratio (TTM)0.000.0061.94
Management EffectivenessAKAMAKAM PeersIndustry Average
Return on Assets (TTM)7.71%-37.39%-248.85%
Return on Equity (TTM)8.74%-17.02%-184.51%
Return on Investments (TTM)8.63%-8.51%-2,605.35%
GrowthAKAMAKAM PeersIndustry Average
Sales (5Yr)29.31%14.26%14.03%
Earnings Per Share (EPS)(TTM)15.41%-6.46%-320.94%
Dividend Growth (5Yr)--0.00%13.79

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