Finish Line Inc., (FINL) Institutional Support, Upgrades for: IXYS Corp., (IXYS) and Bronco Drilling (BRNC)

While new U.S. home sales posted a lukewarm 0.7% increase last month, oil dropped to $66 a barrel in the last two days and a slight drop in August durable goods, mainly due to a drop in demand for commercial aircraft, set the broad market tone this morning of 'unsure,' unclear,' and 'mixed,' SmallCap stocks Finish Line Inc., (FINL), IXYS Corp., (IXYS) and Bronco Drilling Company Inc., (BRNC) all received strong institutional support after weak Q2 numbers and some new analyst upgrades.

Gaining 11.08% ($1.03) this morning is S&P SmallCap 600 company Finish Line Inc., (FINL) http://www.finishline.com/ currently trading on the Nasdaq in the $10.33 range. FINL has a new market cap of $566 million. FINL has a 3-Month average daily trading volume of 760,242 shares and it easily surpassed that volume an hour into today's trading session.

FINL reported late yesterday that it lost $874,000 in Q2 2010. The loss was, in technical terms, a result of FINL bailing out of the 'Man Alive' street wear stores in July. That hit the bottom-line fundamentals hard. 

FINL management said the Company sustained a loss of 2 cents a share for Q2 2010 ending August 29. The 2 cent loss compared with a profit of $13.1 million, or 24 cents per share, a year earlier. FINL said it made an operating profit of 21 cents per share but lost 23 cents per share on the discontinued Man Alive business. FINL revenue fell 11.4% to $298.7 million, from $337 million a year ago. Operating results equaled Wall Street expectations, but revenues were off $6.9 million from the $305.6 million analysts were expecting. A key retail measure: FINL management also said stores open at least a year suffered a 9.9% loss.

FINL shares dropped 12 cents at the close of yesterdays' regular session and then plummeted 21 cents in after market trading. FINL is widely and mostly owned by institutional investors and with FINL management scheduled for an Earnings Conference Call this morning (available at the FINL site), its clear to me that institutions bought up stock this morning believing the Man Alive deal was over, the bad Q2 news was 'out there' and the stock took its losses in yesterdays' regular and after market trading.

FINL operates as a mall-based specialty retailer in the U.S. FINL sells the Finish Line brand name in the retail of men's, women's, and children's athletic, lifestyle, and outdoor footwear. As of July 3, 2009, FINL operated 684 Finish Line stores in 47 states. FINL has a large online and catalog presence.

At $10.33, FINL is just off its 52-week high of $11.06 set on 09-25-08 and is far above its 52-week low of $3.42 set on 11-21-08. At $10.33, FINL is ahead of both its 50-day and 200-day moving averages. FINL has trailing twelve month revenues of $1.2 billion and I think it's important note, that while last years' recessionary pressure may prove to be one of the worst in recorded retail history, FINL managed a trailing twelve month diluted EPS of $0.04. FINL lived to fight another day. FINL shares out versus float ratio is at parity. Very stable.

Gaining 10.54% ($0.80) this morning is IXYS Corp., (IXYS) http://www.ixys.com/ currently trading in the $8.39 range on the Nasdaq. IXYS has a new market cap of $258 million. IXYS has a 3-Month average daily trading volume of 159,608 shares and it topped that volume in the first two hours of this morning's session.

IXYS got a nice endorsement this morning from research house Needham lifting the stock out of the 'Hold' category and putting it into the 'Buy' column.

The upgrade comes on the heels of the September 17, IXYS announcement that it completed the acquisition of two key business units of Leadis Technology (NASDAQ: LDIS). IXYS is in the power semiconductor business and the two LDIS units focus on LED drivers LCD display drivers.

IXYS will pay approximately $4 million in current and deferred funds in exchange for the combined business units, including the respective units' products, intellectual property, technologies and key employees. The LCD drivers are incorporated in the smart-phone handsets of Nokia and Sony Ericsson. The LED driver is a new design and will improve IXYS' time to market, potentially generating greater market share. Both the LCD and LED drivers are at a 'ready' stage to be implemented with the IXYS current product line and will be extremely important introducing new IXYS products in the small display (cell phones, PDAs, digital cameras), middle display backlighting (GPS units, laptops) and large display backlighting (LCD TV screens, computer screens) markets.

IXYS specializes in the development, manufacture, and marketing of power semiconductors, advanced mixed signal integrated circuits (ICs), application specific integrated circuits (ASICs), and systems and radio frequency semiconductors. IXYS power semiconductors are used primarily in controlling energy in motor drives; power conversion, including uninterruptible power supplies and switch mode power supplies; and medical electronics. IXYS sells its products in the U.S., Canada, Europe, the Middle East, and the Pacific Rim.

At $8.39, IXYS is below its 52-week high of $11 set on 06-17-09 and is above its 52-week low of $4.58 set on 11-21-08. At $8.39, IXYS is ahead of its 50-day moving average and behind its 200-day moving average ($8.60). IXYS is widely held by institutions. Its shares out versus float ratio is near-parity.

Gaining 11.66% ($0.75) this morning is Bronco Drilling Company Inc., (BRNC) http://www.broncodrill.com/ currently trading in the $7.05 range on the Nasdaq. BRNC has a new market cap of $192 million. BRNC has a 3-Month average daily trading volume of 218,357 shares and it handily doubled that volume two hours into today's session. 

BRNC got an uplifting upgrade this morning from research house Jefferies & Co., pulling BRNC from the 'Underperform' category to the 'Hold' column. The upgrade follows the September 21, BRNC announcement that it had entered into a joint venture and revolving credit agreement. BRNC entered into a joint venture with Carso Infraestructure Construccionto to provide oil and gas drilling and workover services in Mexico and Latin America through the Company's formerly wholly-owned subsidiary, Bronco Drilling MX.

BRNC sold 60% of its ownership interest in Bronco MX to Carso Infraestructure Construccionto for approximately $30 million in cash. BRNC will also contribute three additional drilling rigs currently drilling in Mexico to the joint venture.

BRNC has also entered into a $75 million revolving credit facility with Banco Inbursa S.A., Institucion de Banca Multiple, Grupo Financiero Inbursa and a portion of the new proceeds was used to retire all of the indebtedness that was outstanding under the BRNC existing credit facility. The remainder of the revolving credit facility will be used for working capital and general corporate purposes. Cash, retired revolving debt and a new partner; nice move.

BRNC provides contract land drilling and workover services to oil and natural gas exploration and production companies in the U.S. and Mexico. As of February 28, 2009, BRNC owned a fleet of 56 land drilling rigs operated in Oklahoma, Texas, Colorado, Utah, North Dakota, Louisiana, and Mexico; owned a fleet of 61 workover rigs operated in Oklahoma, Texas, Kansas, Colorado, Louisiana, and New Mexico; and owned a fleet of 63 trucks and related transportation equipment to transport drilling rigs to and from drilling sites. BRNC is headquartered in Edmond, Oklahoma.

At $7.05, BRNC is below its 52-week high of $12.06 set on 09-25-08 and is above its 52-week low of $3.34 set on 05-13-09. At $7.05, BRNC is ahead of both its 50-day and 200-day moving averages. BRNC has trailing twelve month revenues of $227 million. BRNC is widely held by insiders and institutions. Its shares out versus float ratio (27m/19m) is close enough not to raise any red flags about stability.

Sign-up for Free to Receive Future Commentary and Trading Alerts on FINL, IXYS and BRNC