A New Company On The NASDAQ

Today’s On the Radar report focuses on a company who is stepping up in the world.  They just up-listed their shares to the NASDAQ on June 27.  They’ve been growing like a weed, doubling in size over the last few quarters, and their products are in high demand right now.

Take a closer look at this exciting company…

 

QUICK FACTS

Ticker                                     ATNY

Industry                                  Semiconductors

Recent Price                           $7.10

Market Cap                             $348m

Shares Outstanding                 49 m

Average Volume                      N/A

Dividend Yield                         N/A

Website                                 http://www.apitech.com/

 

COMPANY DESCRIPTION

API Technologies (ATNY) is primarily a government contractor.  The company and their subsidiaries specialize in advanced electronic components and robotics.  They also design secure communication systems for the military and government agencies.

Earlier this year, they merged with another government contractor, SenDEC.  The merger allowed them to restructure their balance sheet and almost double the size of the company.

Then the company made another acquisition in June.  Clearly, management is looking to acquire companies to compliment their existing business.

 

FINANCIALS

Now, when you research API, you’ll see their fiscal year ends in May.  That means their next filing will include full year numbers… and with all the acquisitions they’ve made, this is an important report.

The key points are when you combine the companies, revenue nearly doubled, operating income is up almost 300% and their net income numbers flip from a small loss to a nice gain.

Of course the real challenge will be if the company can continue to improve on their performance numbers in the future.

The company recently completed a significant restructuring, establishing a $170 million term loan, and raising $31 million in a private placement.

ATNY hasn’t even been trading for a full month yet.  So we don’t have average volume numbers yet.  But the company does have some attractive valuation metrics.

 

KEY METRICS ANALYSIS

Trailing P/E                                       2.8x

Price / Sales                                     3.1x

Return on Assets                               N/A

Insider ownership                               78.4%

Short Ratio                                        N/A

Current Ratio                                     1.7x

Total Debt To Equity                           7.5x

 

RECENT EVENTS

This has been a big year for this newcomer to NASDAQ.

In January they merged with SenDEC, an electronics manufacturer catering to the defense industry.  API acquired all of SenDEC’s equity, including their manufacturing operations and approximately $30 million in cash.  They issued 22 million common shares of API.

The deal also made API big enough to attain a NASDAQ listing, which is big news for the company.  It opens up a whole new world of interested funds and institutions who might take a position in the company.

Then on June 1 of this year the company announced the acquisition of Spectrum Control, paying about $260 million to acquire the company.  Spectrum designs and manufactures secure communications for the defense and aerospace industry.

 

MANAGEMENT TEAM

Brian R Kahn – CEO

Bel Lazar – COO

John (Jack) Freeman – CFO

 

STOCK ANALYSIS

 

 

 

 

 

 

Chart courtesy of stockcharts.com

 

The price of ATNY since the Nasdaq listing has stayed relatively stable.  It’s been bouncing between about $7.50 and $7.00.

ATNY’s 52-week low was $3.32 and the 52-week high was $8.25.  Right now the stock is trading at $7.10.  The 50-day moving average is near $7.11 a share and the 200-day moving average is at $6.64.  The company has a market cap of $348 million and 49 million shares outstanding.

 

 

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All stock prices, charts, and figures updated as of July 11 2011.  

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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This Isn’t Your Mom’s Wi-Fi

This week we’re focusing our ZenMoney analysis on the broad line sector of the semi-conductor industry.  If you’re a tech geek, early adopter, or just strain your home or work bandwidth, you’ll want to hear about these guys.

 

QUICK FACTS

Ticker                                     SIMG

Industry                                  Semiconductors

Recent Price                           $6.26

Market Cap                             $497 m

Shares Outstanding                 79.5 m

Average Volume                      356,866

Dividend Yield                          N/A

Website                                  http://www.siliconimage.com

 

COMPANY DESCRIPTION

Silicon Image (SIMG) designs and markets hardware that enables high-definition (HD) content in a variety of devices.  You’ll find their semiconductors in home theaters, personal computers, mobile devices, DTVs, and Blu-ray players.

The company also brings in revenue from licensing their intellectual property.

This Sunnyvale, California Company has also been a driving force behind industry standardization of HDMI and DVI formats.

 

FINANCIALS

Silicon Image’s financials are steadily improving.

For the first quarter, revenue jumped to $49 million, up from $34.3 million a year earlier.  The company continues to improve on their net income, posting a slight loss of $0.8 million this most recent quarter… compared to a $7.2 million loss a year earlier.

When the company turns the corner on earnings and is able to stay consistently profitable, it could be a boon for the stock.

Management was kind enough to provide guidance for the Second quarter of 2011.  They’re looking for revenue of $51 to $53 million.  But, they didn’t give earnings guidance which is a bit of a disappointment.

 

KEY METRICS ANALYSIS

Trailing P/E                                         35.1x

Price / Sales                                       2.4x

Return on Assets                                4.6%

Insider ownership                                0.9%

Short Ratio                                         5.6x

Current Ratio                                      4.7x

Total Debt To Equity                            N/A

 

RECENT EVENTS

Silicon Image recently reached a purchase agreement with SiBeam Inc, another fabless semi-conductor company.  The $25.5 million purchase will be paid for with $14 million in cash and $11.5 million in stock options.

Silicon’s management had been looking to acquire good complementary technology companies.

 

MANAGEMENT TEAM

Camillo Martino – CEO

Noland Granberry – CFO

Edward Lopez – Chief Legal and Administrative Officer

 

STOCK ANALYSIS

 

 

 

 

 

 

Chart courtesy of stockcharts.com

 

A few days ago we saw a very negative indicator for this stock… the 50-day crossed below the 200-day moving average.

SIMG’s 52-week low was $3.10 and the 52-week high was $10.20.  Right now the stock is trading at $6.26.  The 50-day moving average is near $6.67 a share and the 200-day moving average is at $7.68.  The company has a market cap of $497 million and 79.5 million shares outstanding.

 

 

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All stock prices, charts, and figures updated as of July 11 2011.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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You’ll Want This In Your Home!

Discretionary spending is down in U.S. households, but that hasn’t slowed the stream of technological advancements in the home entertainment industry.  I know the next television I buy will be one of those swanky Wi-Fi capable boxes.

Chances are you or your kids have a tablet, a Wi-Fi enabled smartphone, or even a fridge with Wi-Fi capabilities.  Wi-Fi networks are becoming more prevalent, so entertainment and appliance manufacturers are adopting the interconnectivity we all crave.

We’ve found one company capitalizing on this shifting demand for technology.  Take a look at…


QUICK FACTS

Ticker                                       ENTR

Industry                                    Semiconductors

Recent Price                             $8.41

Market Cap                               $720 m

Shares Outstanding                   85.7 m

Average Volume                        925,390

Dividend Yield                            N/A

Website                                    http://www.entropic.com/

 

COMPANY DESCRIPTION

Entropic Communications (ENTR) is a fabless semiconductor company.  Fabless means that they haven’t spent billions of dollars building out an expensive semiconductor manufacturing facility.  Instead, Entropic focuses on designing, developing, and marketing their semiconductors used in home entertainment solutions.

The company specializes in reinvigorating the home network infrastructure.  They have pioneered ways to make the old coax cable in your house to do amazing new things… all thanks to their advanced technology.

Despite the high levels of network demand brought on by HD and other appliances, the old network infrastructure still works.  Consider this – when you bought your fancy new HD television, you didn’t rip down the walls and install new cables.  We have companies like Entropic to thank for that.

Entropic is also one of the founding members of the Multimedia over Coax Alliance (MoCA).  It’s a global consortium setting standards for multimedia over coaxial cable.

 

FINANCIALS

Entropic has seen some really nice growth over the past year.

Revenue for the first quarter last year was a little over $37 million… This year’s Q1 revenue was $71 million.  That’s more than a 90% increase.  Best of all, the company hosts a gross profit margin over 55%.  And their net income is surging.

Entropic’s first quarter income jumped from almost $2 million in 2010 to over $11.8 million this year.

This drove their Earnings Per Share (EPS) to over $0.14!

Why the dramatic growth?

Management credits increased demand of the home networking products for their jaw dropping improvements.  Not really surprising, since Entropic has been consistently building on their past success.

For example, their revenue increased from $116 million in 2009 to $210 million in 2010.

The bottom line is Entropic looks to be an industry leader in an emerging high growth market.

 

KEY METRICS ANALYSIS

Trailing P/E                                       9.3x

Price / Sales                                     2.9x

Return on Assets                              16.5%

Insider ownership                               7.0%

Short Ratio                                       15.5x

Current Ratio                                     11.1x

Total Debt To Equity                            N/A

 

RECENT EVENTS

As we all know prices for modern technologies change rapidly.  Successful companies charge a premium for their cutting edge technology…

But they need to consistently innovate.

Consider their recent announcement of a new product.  ENTR partnered with channel master to provide two new internet-to-TV adapters.  The devices use Entropic’s technology to connect TVs and internet devices to an in home router!  Talk about great technology!

The company also announced August 3rd as their conference call date to discuss second quarter results.

 

MANAGEMENT TEAM

Patrick Henry – President and CEO

David Lyle – CFO

Dr. Tom Lookabaugh – Chief Technology Officer

 

STOCK ANALYSIS

 

 

 

 

 

 

 

Chart courtesy of stockcharts.com

 

Entropic has been trending lower since the beginning of the year, despite their strong financials.  That being said the stock is trading above the 50-day moving average and it’s pretty close to crossing above the 200-day as well.

ENTR’s 52-week low was $6.29 and the 52-week high was $13.96.  Right now the stock is trading at $8.41.  The 50-day moving average is near $8.38 a share and the 200-day moving average is at $9.36.  The company has a market cap of $720 million and 85.7 million shares outstanding.

 

 

Click HERE to read our report on Silicon Image (SIMG)

Click HERE to read more about API Technologies (ATNY)

 

 

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All stock prices, charts, and figures updated as of July 11 2011.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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A New Way To Play Real Estate

I love dividends.  There’s nothing I like more than receiving a fat dividend payout and seeing that cold hard cash get deposited into my bank account.

The problem is, not many penny stocks pay dividends.  So when you find a true penny stock paying dividends, you want to look at it quickly.  And that’s what today’s On The Radar Report is all about.

Here’s a stock for you to take a closer look at….

 

QUICK FACTS

Ticker                                      ARR

Industry                                   Residential REIT

Recent Price                            $7.49

Market Cap                              $362 m

Shares Outstanding                  49.2 m

Average Volume                       856,907

Dividend Yield                          19.4%

Website                                  www.armourreit.com

 

COMPANY DESCRIPTION

ARMOUR Residential (NYSE: ARR) is a Maryland based REIT investing in residential mortgage backed securities.  Their portfolios include adjustable-rate (5%), hybrid adjustable-rate (58.5%), and fixed rate mortgage-backed securities (36.5%).

All of their securities are issued or guaranteed by Fannie Mae, Freddie Mac, and others.  Their portfolio’s worth about $4.7 billion as of June.

This REIT takes investors money, leverages it up, then buys mortgage backed securities.  They capture the difference between their borrowing costs, and the yield on the debt.

Here’s another advantage… If you hate taxes then you’re going to love REITs.  Because they are designated a REIT, they can pass along earnings directly to you… without paying corporate taxes on the money.

The catch is they have to distribute 90% of their income to investors.

All that means is that your dividends get fatter!  Now, let’s look at the numbers…

 

FINANCIALS

Revenue in the first quarter jumped, reaching $13.7 million of interest income.  Now, it’s a great number, but quarter over quarter, comparisons aren’t significant because the company raised capital, and has been increasing their asset base.

ARMOUR management has been aggressively raising capital.  The most recent raise was for almost $118 million in cash.  These funds are being deployed into new assets paying out high yields.

Ultimately, it means big cash flow for the company, and big earnings.  Eventually those earnings make their way into the shareholder hands as dividends.

Speaking of dividends, the board of directors recently set their monthly dividend rate at $0.12 per share… through the third quarter.  That means, if you’re a holder of the stock by July 15, and keep holding for the next three months, you’ll be guaranteed a payout of at least $0.36 for the quarter.

 

KEY METRICS ANALYSIS

Trailing P/E                                        5.9

Price / Sales                                      20.8

Return on Assets                               1.1%

Insider ownership                                2.9%

Short Ratio                                         0.6x

Current Ratio                                      0.03x

Total Debt To Equity                            N/A

 

RECENT EVENTS

As we mentioned above, on June 14, 2011 ARMOUR put out a press release announcing their dividends schedule.  Their Q3 2011 monthly rate is $.12 a share.  The holder of record date is the 15th of each month in Q3.  So there’s still ample time to get in on this while the getting’s good.

 

MANAGEMENT TEAM

Scott J. Ulm – Co-CEO, Vice Chairman, CIO

Jeffrey J. Zimmer – Co-CEO, Vice Chairman, CFO

 

STOCK ANALYSIS

 

 

 

 

 

 

 

Chart courtesy of stockcharts.com

 

After bottoming out in mid 2010, ARR has been a steady climber.  The stock recently retreated to the 50-day moving average, and is now bouncing higher.  And we continue to trade well above the 200-day moving average.

ARR’s 52-week low was $6.10 and the 52-week high was $8.33.  Right now the stock is trading at $7.49.  The 50-day moving average is near $7.43 a share and the 200-day moving average is at $6.94.  The company has a market cap of $362 million and 49.3 million shares outstanding.

 

 

 Discover more great penny stock trading ideas with a subscription to Zenect Wealth

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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