Aug 27, 2010 10:04 AM PDT
Trends, Charts and Exclusive Opinion
Three Stocks that are Flying High Today
HPJ: Supplier Meeting of 150 Vendors and New NASDAQ Listing
ICGE: Investment Sales; Repurchase of Co Shares; and an Acquisition
SHFL: Gaming Provider to Release Q4 09 Earnings after Close Today
Gaining 5.43% this morning is Hong Kong Highpower Technology Inc., (HPJ) http://www.haopengbattery.com/ currently trading in the $9.28 range. HPJ is a heavily traded SmallCap with a 3-Month average daily trading volume of 436,788 shares. HPJ is approximately 55 cents away from its 52-week high of $9.82 set on 01-11-10. HPJ has trailing twelve month revenues of $65 million with a positive, corresponding diluted EPS of $0.30. HPJ is widely held by institutions.
HPJ staged an end of the summer 09 jump from $2 to its current $9 level primarily because of its trading start at NASDAQ on Dec 12 where it took off on its wider exposure to investors. HPJ had been trading on the AMEX. HPJ has a 3-Month ‘proven’ floor of $2 with strong support at $4 and good support at $6 with its spike its spike into the $9 signaling a new floor will establish itself once the stock has stopped gaining in value.
No telling when that will be. HPJ is a near-term (3 Mo) ‘Watch Closely’ for me. This could be missing the ship (at this price), but I would like to see it level off before it becomes a ‘buy’ consideration and perhaps catch it with a solid bottom before it rises into the next tier of $10-15. HPJ can do it. The HPJ Q3 09 earnings report boasted a diluted EPS of $0.18, an 800% increase y-o-y, and 157% increase over Q2 sequentially. Q3 generated gross margins of 25% on net sales of $21.1 million, an 8% increase y-o-y and Q3 gross profits rising 49% y-o-y and 70% sequentially over Q2.
On Jan 4, HPJ, which makes and sells nickel-metal and lithium-ion rechargeable batteries, hosted a supplier conference that drew more than 150 suppliers. “Maintaining outstanding supplier relationships has been a key part of our success in 2009,” said George Pan, CEO of HPJ. The ‘buzz’ at the meeting was about green power for electric vehicles, large-scale energy storage devices, and integrated power systems. HPJ is the second largest net exporter of Ni-MH batteries in China.
HPJ 1-Year HPJ 3-Month
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Gaining 4.79% this morning is Internet Capital Group Inc., (ICGE) http://www.internetcapital.com/ currently trading in the $7 range. ICGE has a 3-Month average daily trading volume of 256,730 shares. ICGE is widely held by institutions. ICGE has a 52-week high of $8.62 set on 09-29-09 with trailing twelve month revenues of $86 million. ICGE has a 3-Month floor at $6.50 with some support at $7 and spikes into the $8 range. ICGE is a near-term ‘Buy’ for me based solely on management. The recent activity at ICGE suggests both confidence and clarity of enacting a course of action. I believe management has the smarts to increase ICGE share value into the $10 range and possibly beyond.
On Jan 7, ICGE sold approximately 773,000 shares of Blackboard Inc., for $35 million. Management isn’t ‘married’ to its investments. ICGE also sold $7 million worth of the same company in Q4 09. ICGE still has approximately 846,654 shares of Blackboard, of which 750,000 are subject to certain hedging arrangements. ICGE management intends to sell them eventually, subject to market conditions and its need for cash.
In the ICGE SEC filing, management noted that it had repurchased 400,000 shares of its stock at $5.79 per share during Q4 09 and they expect to receive $8 million in income tax refunds this year because of an audit of its tax returns for 2005 through 2007 and the passage of the Worker, Homeownership and Business Assistance Act of 2009, which allows corporate taxpayers to carry back net operating losses from 2008 and 2009 for up to five years. So what are they going to do with all the capital? Buy.
On Jan 4, management announced it had acquired GovDelivery, Inc., a leading platform provider of government-to-citizen digital communication solutions (H1N1 updates and the like). ICGE paid $19.7 million for 89% ownership of GovDelivery. GovDelivery experienced a revenue growth of approximately 40% during 2009. As an Internet venture capital firm, I think ICGE management has it right.
ICGE 1-Year ICGE 3-Month
Gaining 3.21% this morning is S&P SmallCap 600 company Shuffle Master Inc. (SHFL) http://www.shufflemaster.com/ currently trading in the $9.01 range. SHFL has a 3-Month average daily trading volume of 306,786 shares. SHFL is approximately 90 cents of its 52-week high of $9.90 set on 09-15-09 and if all goes right in its Q4 09 Earnings report to be released after market today, it could top that in after market trading. A broad market, positive Tick wouldn’t hurt either. SHFL is widely held by institutions and has trailing twelve month revenues of $178 million.
SHFL is a gaming provider with four segments: Utility, Proprietary Table Games, Electronic Table Systems and Electronic Gaming Machines. When the global gaming sector dried up during the recession, perhaps peaking in March 09, SHFL had dropped to $2. It has, in tandem with the sector, made an impressive comeback. SHFL now has a 3-Month floor at $7.50 with very strong support at $8 and good support at $8.50. SHFL did return a dime to shareholders at the end of its Q3 period around Sept 9 and in Nov, Deutsche Securities did initiate coverage with a ‘Buy’. But as an investor, I’d place my money on the return of the sector as a whole. Regardless of todays numbers, SHFL is a short-term (6 Mo) ‘Buy’ for me at this price. With Macau coming around, MGM back in play and the recent Wynn postings, I think the sector will continue to rebound and SHLF right along with it.
SHFL 1-Year SHFL 3-Month
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