Aug 27, 2010 10:04 AM PDT
RSTI: Returns 18 Cent Earnings on Decreasing Sales
MEND: Increases FY 2010 Guidance on Record Q2 Revenues
SNTS: Posts 30% Increase in Y-O-Y Revenues
Gaining as much as 13.68% this morning is Rofin-Sinar Technologies Inc., (RSTI) http://www.rofin.com/ currently trading in the $24.62 range. RSTI easily topped its 3-Month average daily trading volume of 164,220 early in today's session. RSTI is $1.40 off its 52-week high of $26 set on 08-25-09. RSTI has trailing twelve month revenues of $413 million and a trailing twelve month EPS of $0.82 during the 'great recession'. Impressive.
The chart below shows dramatic peaks and troughs for RSTI. $22 seems to be the floor, but RSTI is constantly reaching for the $25 threshold. This is a 'Buy' stock for me in the near-term. I believe it will top its 52-week high near-term (3 Mo) and can hold that $25 level in the short-term (6 Mo).
The RSTI Q4 2009 released yesterday posted a number of balance sheet decreases, but there is broad institutional support for the company and that 82 cent return. RSTI net sales for Q4 totaled $90.5, a 41%, or $63.8 million, decrease from Q4 2008.
RSTI is in the industrial laser business (from circuit-boards to automobiles) and is primarily involved in OEM manufacturing. As production comes on line during the recovery, RSTI revenues will increase. RSTI is also a global company and its balance sheet has struggled with the dollar gaining strength over the Euro as currencies experience the 'yo-yo' effect of re-establishing stability in the capital markets.
RSTI management noted in its Q4 report that, '... the strengthening of the US dollar, mainly against the Euro, resulted in a decrease in net sales of $3.2 million in the fourth quarter.' RSTI management can bring their books into order to compensate.
RSTI bottom-line SG&A decreased in Q4 and R&D costs also declined. Good news. RSTI sales in its two primary revenue streams did drop significantly in Q4, but the Company did manage to return 18 cents diluted EPS to its shareholders. Net income for the twelve month period ended September 30, 2009 totaled $9.2 million, with a diluted EPS of $0.31 (based upon a weighted average of 29.2 million common shares out).
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RSTI
Gaining as much as 13.82% this morning is Micrus Endovascular Corp., (MEND) http://www.micruscorp.com/ currently trading in the $13.32 range. MEND easily beat its average trading volume early this morning. MEND is a half a dollar off its 52-week high. The chart seems to suggest that $12 is the floor for MEND, but it keeps testing that $13.50 level. In the near-term, I believe MEND can top its 52-week high and find that floor at $13.50. This is a 'Buy' stock for me.
MEND released its Q2 2010 numbers this morning before the market and they were impressive. Neurovascular revenues from the United States increased 15% to a record $11.2 million in Q2 and increased 16% to $21.3 million in the first six months. Revenues from Europe increased 5% (or 8% in constant currencies) to $6.4 million in Q2 and increased 9% (or 18% in constant currencies) to $12.7 million in the first six months. MEND revenues from its Asia Pacific market decreased $0.5 million to $2.8 million in Q2, but increased 18% to $6.5 million in the first six months of FY 2010. MEND Q2 diluted EPS were $0.22.
"Our year-to-date neurovascular sales increase of 16% in the highly competitive U.S. market and 18% in constant currencies in Europe is extremely rewarding. Our growth was fueled by new products such as DeltaPaq and our ability to sell into new accounts. We continued to make significant progress toward full-year profitability by effectively managing operating expenses while growing revenues and we have $24.3 million in total cash after our third consecutive quarter of positive cash flow from operations," said John Kilcoyne, Chairman and CEO of MEND. Good management is always a key component to buying into a stock for me.
Increased FY 2010 Revenue Guidance.
MEND management today raised expectations for total revenues for fiscal 2010 to be in the range of $84 million to $87 million. This compares with prior guidance for total revenues to be in the range of $82 million to $86 million.
On September 4, MEND coverage was initiated with an 'Outperform' rating by Robert W. Baird and Co. analyst Lawrence Neibor who noted that MEND, "... is the largest company focused entirely on the neurological market, and its sales are growing much faster than the overall market." MEND develops and sells products intended to treat vascular problems in the brain. Another 'Buy' component for me on niche market-share.
MEND SNTS
Gaining 10.46% this morning is Santarus Inc., (SNTS) http://www.santarus.com/ currently trading in the $3.59 range. SNTS is $.30 off its 52-week high of $3.89 set on 10-12-09. SNTS handily surpassed its average daily trading volume early in today's session. I believe the floor for SNTS is $3.20. I also believe that it will top its 52-week in the near-term. The stock has made some attempts at setting a new threshold at $3.40. I believe it can in the near-term. This is also 'Buy' stock for me.
SNTS released its Q3 2009 earnings yesterday and after the market and the Bio-Pharma Company posted: Increases, Increases, Increases. SNTS reported a 30% y-o-y increase in product-related revenues with total a $39.5 million increase over Q3 2008 revenues of $32.2 million. Net income was $5.3 million or $0.09 per share, a significant increase over Q3 2008's loss of $4 million or $0.08 per share.
The SNTS brand Zegerid had approximate total prescriptions of 294,000 in Q3 09 (a 6.3% increase over Q3 08) and its Glumetza brand had approximate total prescriptions of 74,000 in Q3 09 (a 9.2% increase over Q2 09).
For the First Nine Months of FY 2009: SNTS reported net income of $7.6 million, or $0.13 per share compared with a net loss of $8.4 million, or $0.16 per share, for the first nine months of 2008. Nice turnaround. SNTS also increased its cash positions to $61.8 million, compared with $52.0 million as of December 31, 2008.
GUIDANCE
SNTS management raised its 2009 financial guidance yesterday and now expect net income for the year of at least $10 million (prior guidance was Breakeven or $1 million) with total revenues reaching at least $150 million. "Our decision to increase financial guidance was due to our strong third quarter financial performance, including Zegerid and Glumetza revenue growth, our expectation for lower overall expenses, and the signing of our licensing agreement for Europe," said Gerald T. Proehl, president and CEO of SNTS.
If Merck receives FDA approval of its New Drug Application (NDA) for over the counter Zegerid, SNTS will earn a $20 million regulatory milestone which will be posted on the SNTS books for FY 2009. Other SNTS alliances include: GlaxoSmithKline; to develop, manufacture, and commercialize prescription and OTC products in approximately 100 countries. 'Buy'.
If you'd like to know of any changes in our opinion of RSTI, MEND or SNTS
(or if SCN officially recommends them as trades)
