From Briefing.com: 5:54PM Thursday After Hours prices levels vs. 4 pm ET: The small late-day advance in the regular session has manifested itself in the after hours, where the S&P futures, at 1133, are 2 points above fair value and the Nasdaq 100 futures, at 1458, are also 2 points above fair value. The extended session has been extremely quiet in anticipation of the March jobs report (profiled below).
The below table lists tonight's most notable news items, and the stocks' reactions:
After Hours Mover % Change Move Reason for Move
Borland Software (BORL) +1% In a Business Week article, Rodney Hathaway of Heartland Advisors discusses the potential of Microsoft (MSFT) acquiring Borland; Hathaway suggests MSFT may buy BORL as most companies are looking to do business over the Internet, which could lead to higher demand for the company's tools; Hathaway adds that he doesn't think the deal would bother regulators
Kana Software (00C0) -18% Provider of enterprise customer relationship management solutions warns for Q1 (Mar) revenues; Says it sees sales decreasing approximately 28% to $13 mln as compared to the Street estimate of $15.5 mln; Management noted 'Kana had several anticipated multi-million dollar sales which failed to close by March 31'
Silicon Image (SIMG) +13% Small-cap designer of semiconductor products raises its Q1 (Mar) revenue target to roughly $34.6-35.5 mln (Reuters Research estimate of $32.9 mln); Noted that all three of its business lines were exceeding prior forecasts; Adds that it now expects Q2 (June) sequential revenue growth of 5-10%
XM Satellite Radio (XMSR) +6% Provider of audio entertainment announces that it added more than 320K in net new subscribers in Q1 (Mar), a 230% increase over the prior year period; Briefing.com profiled a call by SG Cowen yesterday on In-Play (a service for Platinum Subscribers) that said it expected XMSR to top its estimate of 260K, putting the company on track to achieve almost 3 mln by year-end 2004
Tomorrow, the market's focal point will be on the March employment report, which has received a lot of attention this week with whisper numbers as high as 200K. A figure like that would be a huge departure from the past four months, in which every nonfarm payrolls figure has missed the consensus estimate. The consensus estimate for March currently stands at +123K, with the actual unemployment rate at 5.6% (unchanged).
For more detail on these, and other developments, be sure to visit our Stock Market Update and Daily Sector Wrap. Heather Smith, Briefing.com
6:31PM Staktek Holdings and SimpleTech settle patent litigation (STAK) 12.50 +0.25: Co announced it has resolved its two lawsuits with SimpleTech. The two companies have agreed to a mutual dismissal of the litigation currently pending. Under the terms of the settlement, no money was exchanged, andneither party licensed its technology to the other.
6:15PM Sierra Wireless increases Q1 guidance (SWIR) 36.14 -0.35: Co Q1 revenue and earnings expectations are increased significantly over the previous guidance. Revenue is expected to be over $40 mln (previously $35-37 mln), Reuters consensus is $36.5 mln and EPS is expected to be over $0.12 (previously $0.06), Reuters consensus is $0.06. Co stated, "We are pleased to raise our first quarter guidance as a result of stronger than expected demand and operating results across key product lines including AirCards and Embedded Modules".
5:20PM Silicon Image raises guidance (SIMG) 10.65 +0.31: Co expects Q1 revenues to grow 14-17% sequentially (previously 6-9%) or approx $34.6-35.5 mln, Reuters consensus is $32.9 mln. Commenting on the revenue growth, CFO, Bob Gargus, stated, "All three lines of business are exceeding the high-end of the guidance we set in our prior earnings call. In addition, orders continue at record levels and we expect Q2 revenues to grow by 5-10% sequentially over the raised Q1 results."
5:16PM Borland: Business Week discusses potential of MSFT acquiring Borland (BORL) 9.35 +0.33: According to BusinessWeek Borland Software (BORL), which has been an underachiever for quite some time, is seeing light at the end of the tunnel as mgmt's turn around efforts take hold, says Rodney Hathaway of Heartland Advisors. BORL's software simplifies writing applications to set up e-businesses using major computing systems, such as Sun Micro's Java and Microsoft's Net platforms. Hathaway says Microsoft might buy BORL and as most companies are looking to do business over the Internet suggesting demand for the co's tools will rise. If Microsoft would buy Borland, it could induce more programmers to use .Net. Also, Hathaway doesn't think the deal will bother regulators. BORL, he figues, is worth $14 based on his EPS estimate of $0.30 a share in 2004 and $0.50 in 2005. Chem Ling of Fulcrum Global Partners reits the stock as Buy noting the shares trade 21.6x 2005 estimates, with projected growth rate of 58% vs. peer group's 28x on projected growth of 43%. Both BORL and MSFT declined to comment.
10:22AM Advanced Micro upgraded at Caris (AMD) 16.52 +0.29: Caris upgrades AMD to Buy from Above Avg, raises their 2004-05 ests, and raises their target to $25 from $20; firm says channel checks confirm strength in both NOR Flash and x86 microprocessors (47% and 48% of rev, respectively) ending Q1 and entering Q2.
8:16AM PHTN started with a Buy at First Albany, tgt $45 32.63: First Albany initiates coverage on Photon Dynamics (PHTN) with Buy rating and $45 tgt calling the co one of only a handful of U.S.-based companies leveraged to the growth of the Active Matrix Liquid Crystal Display (AMLCD) market. Photon Dynamics' products test and inspect AMLCDs during the manufacturing process. Process control provides manufacturers with a high ROI, and it should grow at least as fast as the AMLCD equipment market. The firm estimates that capital equipment spending on AMLCD will grow 40% this year. With the shares trading 30x FY05 EPS estimate of $1.50 they think that the shares will command a premium, due to the scarcity of U.S. securities that are leveraged to the growth of flat panels.
2:26PM Tech Relative Value Ideas--Performance Update (SOXX) The tables below show the updated performance, as of March 31, 2004, for companies highlighted in Tech Relative Value Ideas (Story Stocks) and Tech Stocks as being attractively priced on a relative value basis, or on both a discounted cash flow and relative value basis. Return calculations are simple returns and are not time-weighted.
March 2004 Focus List
The March 04 Focus List on average returned 3.2% as of March 31, 2004. This compares against the Nasdaq which lost 0.2 pt, the SOXX which lost 0.6 pt, the Dow which lost 0.6 pt, and the S&P which lost 0.5 pt over the same holding periods.Company Ticker *P/SG Ratio **P/OPG Ratio Date Price as of 03/31/04
Co Ind Avg Co Ind Avg Price % Change
Affiliated Computer Services ACS 0.8 1.2 5.6 19.2 03/01/04 49.39 51.90 5.1%
Anteon International ANT 0.7 1.2 8.6 19.2 03/01/04 30.05 28.89 (3.9%)
Arrow Electronics ARW 0.2 0.8 11.5 (80.3) 03/24/04 23.82 25.46 6.9%
Brooktrout BRKT 2.0 1.9 n/a 38.3 03/08/04 21.13 19.84 (6.1%)
Captaris CAPA 1.0 2.8 14.8 33.8 03/15/04 5.31 5.50 3.6%
Comtech Telecom Corp CMTL 0.7 1.9 6.2 38.3 03/01/04 29.15 23.20 (20.4%)
Harris Corp HRS 0.9 1.9 18.9 38.3 03/01/04 47.77 48.41 1.3%
Komag KOMG 0.5 1.0 5.2 18.5 03/01/04 23.07 18.40 (20.2%)
Lexmark International LXK 1.7 1.0 15.8 18.5 03/01/04 82.82 92.00 11.1%
Metrologic Instruments MTLG 2.0 1.0 14.8 18.5 03/22/04 21.90 23.40 6.8%
palmOne PLMO 0.6 1.0 (5.0) 18.5 03/23/04 16.16 21.40 32.4%
Raven Industries RAVN 1.3 0.8 10.1 (80.3) 03/01/04 31.75 30.56 (3.7%)
Rockford Group ROFO 0.3 0.4 (15.7) 22.8 03/08/04 6.15 6.74 9.6%
SI International SINT 0.7 1.2 13.8 19.2 03/01/04 22.43 23.11 3.0%
SS&C Technologies SSNC 3.8 2.8 17.9 33.8 03/22/04 22.45 24.38 8.6%
Standard Microsystems SMSC 1.1 2.8 11.5 55.9 03/10/04 26.13 26.73 2.3%
Trident Microsystems TRID 6.3 2.8 (81.2) 55.9 03/17/04 13.23 15.95 20.6%
Average 3.2%
Nasdaq Composite IXIC 1,994.22 (0.2%)
Philadelphia Semi Index SOXX 487.12 (0.6%)
Dow Jones Industrial Avg DJI 10,357.70 (0.6%)
S&P 500 SOXX 1,126.21 (0.5%)
October 2003 Focus List
The October 03 Focus List on average returned 14.3% as of March 31, 2004, down 2.1 pts from 16.4% as of February 27, 2004. This compares against the Nasdaq which returned 6.6% (-1.9 pts M/M), the SOXX which returned 9.7% (-3.4 pts M/M), the Dow which returned 8.2% (-2.4 pts M/M), and the S&P which returned 9.5% (-1.8 pts M/M) over the same holding periods.
Company Ticker *P/SG Ratio **P/OPG Ratio Date Price as of 03/31/04
Co Ind Avg Co Ind Avg Price % Change
ASM International ASMI 1.0 3.0 54.8 (229.3) 10/14/03 17.13 22.10 29.0
ATI Technologies ATYT 1.6 2.8 31.9 55.9 10/01/03 15.82 16.36 3.4
CIBER CBR 0.7 2.8 17.0 33.8 10/08/03 8.08 11.00 36.1
City Telecom CTEL 0.3 1.0 2.1 18.3 10/02/03 6.65 6.49 (2.4)
Comtech Telecom CMTL 0.7 1.9 6.2 38.3 10/16/03 28.75 23.20 (19.3)
Corrillian Corp CORI 2.1 2.8 21.1 33.8 10/03/03 3.43 4.95 44.5
Open Text OTEX 2.7 2.8 25.0 33.8 10/03/03 18.93 29.80 57.4
Electronic Arts ERTS 3.0 2.8 15.8 33.8 10/01/03 47.44 53.74 13.3
Fiserve FISV 1.4 1.2 9.2 19.2 10/01/03 37.66 35.77 (5.0)
Overland Storage OVRL 0.5 1.0 8.0 18.5 10/02/03 15.30 16.95 10.8
Trader Classified Media TRDFF 1.3 1.3 9.0 12.7 10/09/03 9.25 14.60 57.8
United Online UNTD 1.3 1.2 12.8 19.2 10/02/03 22.27 16.82 (24.5)
UTStarcom UTSI 0.6 1.9 5.2 38.3 10/01/03 31.91 28.75 (9.9)
Vishay VSH 1.0 0.8 32.0 (80.3) 10/07/03 19.48 21.34 9.5
Average 14.3%
Nasdaq Composite IXIC 1,994.22 6.6%
Philadelphia Semi Index SOXX 487.12 9.7%
Dow Jones Industrial Avg DJI 10,357.70 8.2%
S&P 500 SOXX 1,126.21 9.5%
*P/SG Ratio: Trailing 12 month (Price / Sales) / Growth ratio as of March 26, 2004.
**P/OPG Ratio: Trailing 12 month (Price / Operating Income) / Growth ratio as of March 26, 2004.
We'll post an updated list of names that are attractively priced on a relative value basis on the Story Stocks and Tech Stocks pages on Monday and at the beginning of each month, as well as continue to highlight relative value ideas on the Story Stocks and Tech Stocks pages on a regular basis. E-mail if you wish to receive notification when we post the list.
Visit the Story Stocks and Tech Stocks pages daily for the latest thinking on investment ideas.--Ping Yu, Briefing.com
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