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SmallCaps Blue Coat Systems Inc., (BCSI), Kirkland's Inc., (KIRK) and Cerus Corp., (CERS) held their stock price gains this morning even though the Dow started off with a plus Tick, only then to be turned around by a few bears; and so the see-saw began teetering back and forth.
The broad market jumped this morning on news from the Commerce Department that new homes sales rose 9.6% in July; the fourth straight month. Commerce also said durable goods (those expected to last three years or more) orders rose 4.9%, the biggest gain in two years and nearly 2% what economists had forecasted. But even this good news couldn't keep the BigCap bulls in the game in early trading.
Still, the pre-market SmallCap leaders held onto plus territory and brought in new investors.
Gaining 11.24% ($1.94) this morning is S&P SmallCap 600 member Blue Coat Systems Inc., (BCSI) http://www.bluecoat.com/ which is currently trading in the $19.20 range on the Nasdaq. BCSI has a new market cap of $762 million. BCSI has a 3-Month average daily trading volume of 737,071 shares and it had easily topped that in the first two hours of trading.
Late yesterday, BCSI announced Q1, 2010 results with management noting it reversed a year-earlier loss with slightly 'better-than-expected' top-line and bottom-line balances. With a news-on-news sequence, FBR Capital Markets raised its price target from $14 to $16 and re-stated a 'market perform' rating.
BCSI beat analyst forecasts for Q1 by a penny: BCSI reported adjusted earnings (excluding special items) of 23 cents per share, compared with an average forecast from analysts of 22 cents. BCSI sales totaled $116 million, a nudge ahead of the $115.8 million analysts had predicted.
Also late yesterday, BCSI management said it had appointed Gordon C. Brooks as its new chief financial officer as of September 1. A new CFO rarely hurts the price of a share.
Marketshare...
Today, BCSI management officially said that the Company remained the worldwide market share leader in the Content Security Gateway Appliance market for the second calendar quarter of 2009, according to a recent report from Infonetics Research. BCSI increased its market share in the second quarter to 23.6%. BCSI has led this market since Infonetics initiated tracking at the beginning of 2007. (According to Infonetics, the Content Security Gateway Appliance market is expected to grow from $1.2 billion in 2009 to $1.9 billion in 2011).
BCSI designs and sells proxy appliances and related software and services that optimize and secure the delivery of business applications and other information to distributed users over a wide area network (WAN) or the public Internet/Web.
At $19.20, BCSI is below its 52-week high of $21.12 set on 07-28-09 and far above its 52-week low of $6.96 set on 12-05-08. At $19.20, BCSI is ahead of both its 50-day and 200-day moving averages. BCSI has trailing twelve month revenues of $444 million. BCSI is widely held by institutions. Its shares out versus float ratio is at parity; very stable.
Also gaining a significant amount today on earnings news is retailer Kirkland's Inc., (KIRK) http://www.kirklands.com/ which topped an 11.33% ($1.42) jump this morning in early trading. KIRK is currently selling for $13.95 a share with a new market cap of $274 million. KIRK has a 3-Month average daily trading volume of 621,740 shares and it flew by 876,399 shares within hours of the open.
It great to once again see some retailers with good numbers (70% of GDP is based on consumer buying power). And even though retailers are often getting good numbers these days based on bottom-line cost expenses, I still find it hopeful thing.
KIRK management said today it made a profit in Q2 by lower freight expenses and occupancy costs. KIRK has been closing mall-based stores as leases expire.
KIRK earned $3.4 million, or 17 cents per share, in the 13 weeks ended August 1. In the same period last year, it lost $1.7 million, or 9 cents per share. KIRK's revenue was a wash at $87.7 million, with 34 fewer stores on average than a year ago. Same-store sales, (stores opened at least a year) rose 6.1 percent. Its off-mall stores sales increased 6.3% while sales in mall stores rose 5.5%.
Guidance
KIRK management raised its full-year financial forecast based on a better-than-expected first half of the year. KIRK now expects 2009 earnings to come in significantly above the $10.1 million it earned in fiscal 2008. KIRK management also said they expect sales to be equal to or moderately below year-ago levels.
KIRK is a specialty retailer of home decor in the United States. As of January 31, 2009, it operated 299 stores in 34 states.
At $13.95, KIRK is below its 52-week high of $15.74 set on 08-04-09 and above its 52-week low of $1.58 set on 10-10-08. Quite a comeback. At $13.95, KIRK is ahead of both its 50-day and 200-day moving averages. KIRK has trailing twelve month revenues of $390 million and a trailing twelve month diluted EPS of $0.78. KIRK is widely held by insiders and by institutions. Its shares out versus float ratio is near-parity although I would like to see more shares in the public float.
As the BioTech goes; so goes its components and gaining over 13.17% ($0.27) on no official news this morning is Cerus Corp., (CERS) http://www.cerus.com/ which is currently trading in the $2.30 range on the Nasdaq. CERS has a new market cap of $74 million. CERS has a 3-Month average daily trading volume of 942,422 shares and had nearly quadrupled that in early trading topping 3,616894 shares traded today.
Last Thursday, CERS management said the Company plans to sell 6 million units of stock and warrants for portions of shares to certain investors for approximately $13.2 million in a registered direct offering. After expenses, CERS intends on using $12.2 million for working capital and general corporate purposes. Investors have agreed to buy the units based on one share of the company's stock and a warrant to purchase 0.4 of a share for $2.20 each.
Investors saw this as a weakness and shares dropped to the $2.20 level even though the day before, CERS management had also announced that Swiss regulators had approved the use of certain components of the CERS Intercept Blood System (which is used to help inactivate blood-borne pathogens in donated blood). As BioTech buyers continue the trend of supporting the sector by purchasing shares; CERS has benefited.
Buyers have revisited the recent Swiss approval and have laid their money down on the significance that the CERS Intercept Blood System is designed to deactivate pathogens including viruses, bacteria and parasites in blood that is going to be used in transfusions.
There are a lot of blood transfusions in the world everyday and this is the primary product of CERS. Any regulatory thumbs up can only bolster CERS revenues.
At $2.30, CERS is less than half its 52-week high of $5.02 set on 09-23-08 and is above its 52-week low of $0.55 set on 12-17-08. At $2.30, CERS is ahead of both its 50-day and 200-day moving averages. Its shares out versus float ratio is at parity.
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