Sigma Designs, Inc. has taken a beating recently, perhaps unfairly. A few analysts have downgraded their ratings lately, but the stock is looking attractive at these levels. It is trading at 15x this year's estimates, well below its long-term growth rate of 40%. Next year's earnings estimates have increased nine cents to $2.41 per share over the past month.
Full Analysis
Sigma Designs, Inc. (SIGM) offers silicon-based digital media processors primarily for Internet protocol (IP) video technology, connected media players, high-definition televisions, and personal computers add-in and other markets. Its REALmagic video streaming technology is used in various consumer applications providing integrated solutions for decoding of H.264, MPEG-4, MPEG-2, MPEG-1, and Windows Media Video 9.
The company offers silicon-based media processors for Internet protocol television set-top boxes, digital media receivers, high definition DVD players, high definition television, and portable media players. It also provides video and audio decoding chips under the names of EM8400 series, EM8500 series, EM8610 series, EM8620L series, and SMP8630 series for the IP video technology market and connected media player market, as well as the PC add-in market.
In late-November, the company said that its third-quarter profit surged on sales of chips to makers of IPTV set-top boxes and Blu-ray players. The company earned $21 million, or 72 cents per share, compared with a profit of $2.7 million, or 11 cents per share, during the same period a year prior. Revenue rose to $66.2 million from $25.1 million. Analysts only expected 48 cents per share.
Regarding its outlook, the Company expects a continued increase in demand for its products with 10% to 15% growth in net revenues for the fourth quarter compared to the previous quarter. While the Company�s gross margin has been stronger than expected in recent quarters, the target remains 50% within a range of 48% to 52%.
�We are extremely pleased to report another record setting quarter for the company in terms of revenue and profitability. In our third quarter, we achieved a revenue increase of 56% to reach $66.2 million, our eighth consecutive quarter of double-digit sequential revenue growth. Our outstanding revenue increase was a result of increased demand from the IPTV set-top box market and high definition DVD players."
The stock has taken a significant hit over the past few weeks, but the drop may be an overreaction. A few analysts have downgraded their ratings lately, but the stock is looking attractive at these levels. It is trading at 15x this year's estimates, well below its long-term growth rate of 40%.
SIGM has posted an average surprise of 11.3% over the past four quarters. Next year's earnings estimates have increased nine cents to $2.41 per share over the past month. One out of the four covering analysts has raised his forecast over that time frame.
Content Courtesy: Zacks Investment Research
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Tuesday, February 26, 2008
SIGM - Sigma Designs - trading at 15x this year's estimates, well below its long-term growth rate of 40%
GLW - Corning Inc - ROE of 26% stomps the industry average of 4%
Corning Incorporated (GLW), a Zacks #1 (Strong Buy) company, recently reaffirmed its first-quarter guidance of sales in the range of $1.59 billion to $1.62 billion and earnings per share, excluding special items, of 41 cents to 43 cents. Analysts raised earnings estimates by seven cents, bringing them in line with the company’s outlook. In early February, GLW declared a quarterly dividend of five cents per share. The company’s dividend yield of 0.8% is above the industry average, and its ROE of 26% stomps the industry average of 4%.
Full Analysis
Corning Incorporated is the world leader in specialty glass and ceramics. Drawing on more than 150 years of materials science and process engineering knowledge, Corning creates and makes keystone components that enable high-technology systems for consumer electronics, mobile emissions control, telecommunications and life sciences.
The company’s products include glass substrates for LCD televisions, computer monitors and laptops; ceramic substrates and filters for mobile emission control systems; optical fiber, cable, hardware & equipment for telecommunications networks; optical biosensors for drug discovery; and other advanced optics and specialty glass solutions for a number of industries including semiconductor, aerospace, defense, astronomy and metrology.
Following a fifth consecutive year of increased sales and profitability in 2007, Wendell P. Weeks, chairman and chief executive officer recently said, “Last year was a year of outstanding execution for Corning. We had record earnings per share, excluding special items, of $1.41, gross margins at 47%, and operating cash flow of more than $2 billion.” He added, “innovation will continue to drive the company’s long-term growth, as it has throughout the company’s past.”
The company also reaffirmed its first-quarter guidance of sales in the range of $1.59 billion to $1.62 billion and earnings per share, excluding special items, of 41 cents to 43 cents.
Eight out of 12 covering analysts are in agreement as evidenced by current first-quarter earnings expectations of 42 cents per share, versus last month’s forecasts of 35 cents. For the full year, 12 out of 14 analysts increased earnings estimates from last month’s $1.60 per share to $1.70.
In early February, the Zacks #1 (Strong Buy) company declared a quarterly dividend of five cents per share. The dividend is payable March 31, 2008 to shareholders of record as of March 3, 2008. The company’s dividend yield of 0.8% is above the industry average as this technology company is operating in an industry that does not often offer dividends.
This Growth & Income stock pick boasts a return on equity (ROE) of 26%, stomping the industry average of 4%.
Content Courtesy: Zacks Investment Research
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SYT - Syngenta AG - Within the past 30 days, two of four covering analysts have increased their current-year estimates
Syngenta AG (SYT) is another company that is cashing in on the incredible boom in the Agriculture markets. The company reported awesome six-month and full-year results on Feb 7, with full-year profits growing by almost 100% to $1.11 billion. The company also boosted its guidance in anticipation of continued strength in the ag markets.
Full Analysis
Syngenta AG, an agribusiness company, operates in crop protection and seeds businesses. It operates in three segments: Crop Protection, Seeds, and Plant Science. The company markets these products worldwide under NK, Golden Harvest, GARST, Hillesh, S&G, and Rogers brand names. Syngenta has operations in Europe, Africa, the Middle East, Latin America, the Asia Pacific, and North America. The company was founded in 1999 and is headquartered in Basel, Switzerland.
Syngenta reported blazing full-year results on Feb 7, fueled by soaring commodity prices and increased demand. Full-year profits were up almost 100% to $1.11 billion, compared to $634 million from last year. Sales increased 15% to $9.24 billion. The company also announced a dividend of $4.37, and said that it would continue its share buyback program.
Crop protection, which accounts for 75% of Syngenta's revenue, increased by 14% to $7.3 billion in the last year, up from $6.4 billion in 2006. The crop protection business posted its strongest growth in Latin America with a 37% increase. Europe, Africa and the Middle East also reported double-digit growth.
Chief Executive Mike Mack said 2007 was a turning point for the Syngenta, as growers across the world attempted to maximize their yields in light of the supply shortage in the Ag markets. Mack added that continued high demand for agricultural commodities would enable Syngenta to target double digit growth in earnings per share through 2010.
Estimates for the company have been rising, as the analyst community digests the robust results and bullish industry outlook. Within the past 30 days, two of four covering analysts have increased their current-year estimates, driving the consensus estimate higher by 53 cents to its current reading of $3.25 per share.
Syngenta shares have been engaged in a very smooth trend higher for the last two years, but recently, the upward trajectory increased in velocity. After bouncing from a key level of support on Jan 22, shares of SYT have proceeded to surge higher, trading as high as $56, representing a very nice short-term return of almost 25%.
Currently, shares are once again pressuring a key area that they have not been able to breach just above $55. With the short-term trend recently becoming much more aggressive, look for prices to break through and push higher. After $55, the next stop is the actual 52-week high, which is just above $57. It should only be a matter of time before this mark is broken, because the agriculture markets that are fueling fertilizer producers profits are showing no sign of slowing down any time soon.
Content Courtesy: Zacks Investment Research
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XEC - Cimarex Energy - After the positive earnings report, brokerage analysts moved to raise estimates
Cimarex Energy is drilling its way to profits as crude hits record highs and natural gas prices soar. The company surprised on estimates in the fourthquarter by 30.51 percent and has beaten the last three quarters by 18.08 percent. Cimarex Energy has a P/E of only 12.32.
Full Analysis
Cimarex Energy Company (XEC) is an oil and gas exploration and production company, headquartered in Denver, Colo., with its business approach centered on growing profits by expanding its drilling program and production rates.
XEC, a Zacks #1 Rank (Strong Buy), has its principal operations in three location: the Mid-Continent, which includes Oklahoma and Texas; the Permian Basin, which includes Texas and New Mexico; and the Gulf of Mexico.
The company diversifies its risk by drilling in the lower-risk Mid-Continent and Permian Basin properties which have proven reserves compared to its higher-risk Gulf Coast and Gulf of Mexico projects.
Production in both oil and natural gas has been increasing. Fourth-quarter oil production grew 17 percent to an average of 21,680 barrels per day from a year ago. Gas production in the latest quarter averaged 341.1 million cubic feet per day (MMcf/d), an increase of 4 percent from the fourth-quarter 2006 average of 329.4 MMcf/d.
On Feb 20, Cimarex reported fourth-quarter earnings. The company surprised on earnings by 30.51 percent, reporting a net income of $130 million, or $1.54 per share, compared $58.7 million, or 70 cents per share in the fourth-quarter 2006. Analysts' consensus estimates were for $1.18 per share.
The surge in earnings was a result of increased production and higher crude and natural gas prices. Fourth-quarter gas prices increased 24 percent to $7.71 per thousand cubic feet (Mcf) and oil rose 58 percent to $88.07 per barrel from the same period of 2006. Sales also jumped 48.3 percent to $438.5 million from $295.6 million in the year-ago period.
After the positive earnings report, brokerage analysts moved to raise estimates for the first quarter and the full year. In the last week, one covering analyst out of three raised estimates by one cent to $1.19 from $1.18 per share for the first quarter.
Estimates for the full year rose in the last week as well, with one analyst out of three raising by 10 cents to a consenus estimate of $4.05 from $3.95 per share.
Cimarex has a P/E of 12.32 and a P/B of 1.26. The company has an outstanding five year average return on equity of 16.64 percent. XEC also pays a dividend of 0.50 percent.
Content Courtesy: Zacks Investment Research
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