Aug 27, 2010 10:04 AM PDT
AGYS: MAK Capital to Increase its stake to over 20%
CRMT: Q2 Revenues up 15% with $0.53 EPS
ANDE: 'Buy' Upgrade Given Today by BB&T Capital Markets
Gaining 3.32% this morning is S&P 600 company Agilysys Inc., (AGYS) http://www.agilysys.com/ currently trading in the $8.52 range. AGYS has a 52-week high of $8.83 set on 11-18-09 and it could top that by the end of todays session.
The huge dip on the charts below in early November was caused by a 9% drop in revenues for the AGYS Q2 2010 period. I believe that was an over-reaction. The same quarter, AGYS reported a positive $0.12 diluted EPS, a 20% sequential quarterly rise and that it was debt free with $48 million of cash on hand. AGYS lost $4.66 per share in Q2 2009. The stock has made a nice, steady climb to the $8 range.
The jump today came on news that AGYS's largest current shareholder of issued and outstanding shares (19.18%), private investment fund MAK Capital One LLC, the investment manager of both MAK Capital Fund and Paloma International L.P., intends on raising its stake to over 20% in AGYS (but not to exceed one-third). MAK clearly stated that it has no intention of seeking control of the AGYS. I believe MAK will support the stock throughout its $8 range and push it into the near-term (3 Mo) $9-$10 range. This is a 'Buy' stock for me.
AGYS generates revenues by selling its IT technology, including specifically-designed hospitality software solutions, to venues that require crowd-friendly controls for efficiency. For example; on November 4, AGYS sold its system to one of London's most prestigious hotels, the Connaught. The AGYS InfoGenesis product, combined with ResPak software can manage dining reservations and table management. The AGYS InfoGenesis system combines reporting and configuration capabilities with an easy-to-use touch-screen terminal application. The product manages any configuration of dining and bar operations.
Sign-up for Free to Receive Future Commentary on the IT Sector.
AGYS 3-Month AGYS 1-Month
Gaining 3.85% this morning is America's Car-Mart Inc., (CRMT) http://www.car-mart.com/ currently trading in the $24.00 range. CRMT easily topped its 3-Month average daily trading volume early in todays session. CRMT is approximately $1.70 off its 52-week high of $25.69 set on 10-23-09. I believe CRMT can make up the difference, and then some, in the near-term. This is a 'Buy' stock for me in the near-term. My first 'green light' is that CRMT returned $1.66 in diluted EPS (on $307 million in revenues) in its trailing twelve months. In the Automotive Sector, a car dealer returning a $1.66 EPS during the 'great recession' really says something.
My second green light for the near-term is that the stock has a 3 Mo floor between $21 and $23 and spikes into the $24 range. When wholesale used vehicle prices fell 0.9% in October from September, CRMT dipped but recovered. Strength.
Today, CRMT reported its Q2 numbers. Management reported a 61% higher profit of $6.3 million, or 53 cents a share, compared with $3.9 million, or 33 cents per share. Revenue increased 15% to $82.6 million, and sales at locations open more than one year rose 11.4%.
CMRT operates 96 automotive dealerships in eight states focused on the buy here/pay here segment of the used car market. The CRMT Q2 results beat analyst expectations of 42 cents by 11 cents. Another impressive stat is that saw a decrease in the number of people with accounts more than 30 days past due in the quarter when compared to a year ago.
CRMT 3-Month ANDE 3-Month
Gaining 4.63% this morning is S&P 600 company The Andersons, Inc., (ANDE) http://www.andersonsinc.com/ currently trading in $27.85 range. ANDE is a heavily traded SmallCap. ANDE is approximately $10 off its 52-week high of $37.56 set on 10-21-09. ANDE has trailing twelve month revenues of $2.88 billion. That's right, billion.
ANDE has a 6 Mo floor in the $20 range and in July, ANDE made a climb from $25 to $35. A nervous Q3 expectation dropped the stock in mid-October and a weak Q3 performance pushed the stock into the $24 range.
Today, ANDE got a significant upgrade from research house BB&T Capital Markets which lifted the stock from a 'Hold' to an outright 'Buy'. Although I didn't think the Q3 numbers were that bad, this is a 'Watch Closely' stock for me in the near-term.
On November 4, ANDE, a diversified agricultural and transportation company, said its Q3 profit fell 90% as fertilizer retailers kept inventories lean and its rail group suffered from double-digit declines in rail traffic amid the economic slump. ANDE earned almost $1.3 million, or 7 cents per share, for the quarter, down from $12.8 million, or 70 cents per share, during the same period last year. Revenue tumbled 34% to $601 million, from $905.7 million a year earlier.
With global transportation on the move again (and Warren Buffet's recent purchase in August of 1.6 million shares of Burlington Northern), I believe the ANDE rail group will make a comeback. The ANDE 'in service' freight fleet (24,000 cars and locomotives) Q3 numbers declined to 74.4% from 93.3% last year. As the numbers improve this quarter, which I believe they will, ANDE will regain its value and I will tie a 'buy' to the overall recovery.
If you'd like to know of any changes in our opinion of AGYS, CMRT or ANDE
(or if SCN officially recommends them as trades)
be sure to sign up for our free weekly newsletter today.
