Folks I can't help myself. I see two stocks I like enough to buy. The problem for us market timers is next week the Fed will begin his QE2 purchases and the market is set up to be greatly disappointed.
The risk in not buying here is one or both will have a huge earnings report before next week. OR that the market embraces QE2 if it's big enough and framed the right way and we have a great race for performance from all the under performing hedge funds.
The risk of buying now is one or both lays an egg at earnings and/or next week the market corrects in response to QE2.
With Cardtronics we have the added risk of the company having missed earnings once before & Tom Harken has a bill in congress that probably won't go anywhere that keeps ATM's fixed at 50 cents and of course if rates were to raise.... I don't see any of that happening.
It's a bit of a gamble but gambling is what we do.
Stock #1- ENTROPIC COMMUNICATIONS.
why buy: Folks the move from lap top to TV has begun. New TV's have instant facebook and youtube, NETFLIX etc... to get the downloaded movies to look good on the TV you need Entropic's chips.
For years it seems technology companies have been talking about linking your TV, computer, digital video recorder, game console and other electronic gadgets together in a home network, allowing you to share content among devices.
Now it can be done. Entropic Communications, a San Diego maker of semiconductors and software that power home networks, has finally begun to see home-network talk translate into big sales.
The company's chips are primarily being used to allow consumers to access multiroom digital video recorder services offered by pay-TV providers such as Verizon, DirecTV and cable outfits. So the real niche here is watching your DVR in other rooms without buying two set top boxes.
Entropic expects third-quarter sales of $60 million to $61 million -- up from $31 million from the same quarter a year earlier.
A Bet On MoCA!
Entropic helped to pioneer a technology standard for connecting devices via coaxial cable that already sits behind the walls in the majority of U.S. homes. It's called the Multimedia over Coax Alliance, or MoCA. This is akin to getting fiber into the home using existing copper wire-- it's huge. Everyone has coaxial in their walls in the big cities.
Accdording to the company they have a 70% market share in this area-- MoCA appears to be the de facto standard now.
"MoCA is going to completely dominate North America" said Lee Ratliff, a senior analyst with technology research firm iSuppli. "The big question is how many (chip suppliers) will there be three years from now. Broadcom has a history of marching into a new market and taking over everything."
Ah, alas I own BRCM too but I see Broadcom making a play for Entropic soon. Wouldn't you?
Ratliff noted that Entropic landed a major victory when DirecTV started using its chips this spring. Broadcom had designed a MoCA chip specifically for DirecTV, he said.
"They decided to go with Entropic anyway. I don't know the reasoning behind the decision. But it tells me Entropic has legs," he said.
One reason these home networks have been slow to take off is a lack of compelling video on the Internet besides porn, as well as limited bandwidth to handle high-quality, high definition video streams from the Web. Now, that's beginning to change.
Consumers can get significantly higher download speeds these days from Internet providers, particularly the cable companies. Netflix, Best Buy, Blockbuster and others are offering movies and TV shows for download over the Internet -- the type of shows that consumers are most likely going to want to watch on a big-screen TV not a laptop!!!.
"It's possible for consumers to get 20, 30, 50 megabits per second," download speeds, said Ratliff. "But without a home network, what do you do with it? Your PC can't make use of all that bandwidth, and it certainly can't move it around the home."
In addition, television makers and retailers are betting big on Web- connected televisions this Christmas this is more business for Entropic.
Wi-Fi doesn't always work reliably with big files. It is subject to interference because it operates over unlicensed wireless spectrum. When customers are watching a high-definition movie they paid to download or stream over the Web, they're not going to accept spotty connections, although, they do appear to accept lousy sound via music downloads from Apple. With film, however, and with a huge plasma TV there is no room for anything less than perfection. MoCa from Entropic is a bet on that trend.
Stock #2 Cardtronics. CATM
why buy: Largest non bank ATM provider.
Cardtronics operates over 30,000 ATMs in the U.S., Puerto Rico, the U.K. and Mexico. Additionally, the company works with merchants like 7-Eleven, Costco, CVS, and other major retailers and gas stations.
Last earnings report these guys did very well:
Revenues increased 7% year over year to $133 million. Gross margin also improved, up 240 bps to 32.5%. These 2 factors lead to a 53% jump in EPS, to 26 cents. Analysts were looking for 19 cents, giving Cardtronics its fifth earnings surprise in the past 6 quarters. (like I said they did miss one)
Additionally, management said they are confident about the new services Cardtronics offers and its future impact on the company's growth.
Additionally I've run into some folks buying or recommending the name. In particular Fifth Third analysts & Zacks.
If Cardtronics continues to meet earnings expectations, annual growth rates will be 53% this year and another 27% in 2011. That's pretty hot for a sort of financial play! Overall growth rate approx 40%.
The PE now is 34 which is rich but the forward PE is just 13!!!! This is one of the easiest ways to buy a high growth story folks buy a high PE before it changes next year and the stock picks up value investors.... for now it's momentum.
CATM's price-to-sales ratio is 0.8 times.
Let's see how these two names work out before buying more. ANAD just missed the cut and entry into my portfolio today, watching that one.
Other stocks on watch: ASYS // GBX // EPAY
Goood Luck Everyone! ~ stoney
The risk in not buying here is one or both will have a huge earnings report before next week. OR that the market embraces QE2 if it's big enough and framed the right way and we have a great race for performance from all the under performing hedge funds.
The risk of buying now is one or both lays an egg at earnings and/or next week the market corrects in response to QE2.
With Cardtronics we have the added risk of the company having missed earnings once before & Tom Harken has a bill in congress that probably won't go anywhere that keeps ATM's fixed at 50 cents and of course if rates were to raise.... I don't see any of that happening.
It's a bit of a gamble but gambling is what we do.
Stock #1- ENTROPIC COMMUNICATIONS.
why buy: Folks the move from lap top to TV has begun. New TV's have instant facebook and youtube, NETFLIX etc... to get the downloaded movies to look good on the TV you need Entropic's chips.
For years it seems technology companies have been talking about linking your TV, computer, digital video recorder, game console and other electronic gadgets together in a home network, allowing you to share content among devices.
Now it can be done. Entropic Communications, a San Diego maker of semiconductors and software that power home networks, has finally begun to see home-network talk translate into big sales.
The company's chips are primarily being used to allow consumers to access multiroom digital video recorder services offered by pay-TV providers such as Verizon, DirecTV and cable outfits. So the real niche here is watching your DVR in other rooms without buying two set top boxes.
Entropic expects third-quarter sales of $60 million to $61 million -- up from $31 million from the same quarter a year earlier.
A Bet On MoCA!
Entropic helped to pioneer a technology standard for connecting devices via coaxial cable that already sits behind the walls in the majority of U.S. homes. It's called the Multimedia over Coax Alliance, or MoCA. This is akin to getting fiber into the home using existing copper wire-- it's huge. Everyone has coaxial in their walls in the big cities.
Accdording to the company they have a 70% market share in this area-- MoCA appears to be the de facto standard now.
"MoCA is going to completely dominate North America" said Lee Ratliff, a senior analyst with technology research firm iSuppli. "The big question is how many (chip suppliers) will there be three years from now. Broadcom has a history of marching into a new market and taking over everything."
Ah, alas I own BRCM too but I see Broadcom making a play for Entropic soon. Wouldn't you?
Ratliff noted that Entropic landed a major victory when DirecTV started using its chips this spring. Broadcom had designed a MoCA chip specifically for DirecTV, he said.
"They decided to go with Entropic anyway. I don't know the reasoning behind the decision. But it tells me Entropic has legs," he said.
One reason these home networks have been slow to take off is a lack of compelling video on the Internet besides porn, as well as limited bandwidth to handle high-quality, high definition video streams from the Web. Now, that's beginning to change.
Consumers can get significantly higher download speeds these days from Internet providers, particularly the cable companies. Netflix, Best Buy, Blockbuster and others are offering movies and TV shows for download over the Internet -- the type of shows that consumers are most likely going to want to watch on a big-screen TV not a laptop!!!.
"It's possible for consumers to get 20, 30, 50 megabits per second," download speeds, said Ratliff. "But without a home network, what do you do with it? Your PC can't make use of all that bandwidth, and it certainly can't move it around the home."
In addition, television makers and retailers are betting big on Web- connected televisions this Christmas this is more business for Entropic.
Wi-Fi doesn't always work reliably with big files. It is subject to interference because it operates over unlicensed wireless spectrum. When customers are watching a high-definition movie they paid to download or stream over the Web, they're not going to accept spotty connections, although, they do appear to accept lousy sound via music downloads from Apple. With film, however, and with a huge plasma TV there is no room for anything less than perfection. MoCa from Entropic is a bet on that trend.
Stock #2 Cardtronics. CATM
why buy: Largest non bank ATM provider.
Cardtronics operates over 30,000 ATMs in the U.S., Puerto Rico, the U.K. and Mexico. Additionally, the company works with merchants like 7-Eleven, Costco, CVS, and other major retailers and gas stations.
Last earnings report these guys did very well:
Revenues increased 7% year over year to $133 million. Gross margin also improved, up 240 bps to 32.5%. These 2 factors lead to a 53% jump in EPS, to 26 cents. Analysts were looking for 19 cents, giving Cardtronics its fifth earnings surprise in the past 6 quarters. (like I said they did miss one)
Additionally, management said they are confident about the new services Cardtronics offers and its future impact on the company's growth.
Additionally I've run into some folks buying or recommending the name. In particular Fifth Third analysts & Zacks.
If Cardtronics continues to meet earnings expectations, annual growth rates will be 53% this year and another 27% in 2011. That's pretty hot for a sort of financial play! Overall growth rate approx 40%.
The PE now is 34 which is rich but the forward PE is just 13!!!! This is one of the easiest ways to buy a high growth story folks buy a high PE before it changes next year and the stock picks up value investors.... for now it's momentum.
CATM's price-to-sales ratio is 0.8 times.
Let's see how these two names work out before buying more. ANAD just missed the cut and entry into my portfolio today, watching that one.
Other stocks on watch: ASYS // GBX // EPAY
Goood Luck Everyone! ~ stoney
