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Three Momentum Plays for Today
IPAR: Major Brand Fragrance Licenses Pay Off During the Holidays
SBGI: Can the Broadcast Group Keep BigCap Time Warner in Line?
ISLN: The Practical Use of its Massive Data Storage Becomes Clear
Gaining 9.33% this morning is Inter Parfums Inc., (IPAR) http://www.interparfumsinc.com/ currently trading in the $11.72 range. IPAR easily topped its 3-Month average daily trading volume this morning. IPAR is chasing its 52-week high of $13.48 set on 10-22-09 and just might catch it as retail numbers roll out through the holidays. I like this stock. IPAR is a 'Watch Closely' stock for me in the near-term (3 Mo). IPAR has trailing twelve month revenues of $396 million and during the 'great recession' returned a corresponding, positive diluted EPS of $0.74.
IPAR has a 3-Month floor at $11 with enough support at $12 to make its value spikes realistic as the next threshold. Can it beat its 52-week high in the next three weeks? Yes. IPAR has enough recognized brands under license to post some significant holiday numbers and move into the $13.50 range. I'm just not confident there's any real money to be made buying in right now. The dye is cast for this holiday market. In the short-term (6 Mo), if IPAR can hold a $12 floor, that would be a 'buy' signal for me.
IPAR was given an upgrade on November 24 by research house Caris & Company from 'Above Average' to outright 'Buy'. This is a good company. The upgrade was given following the IPAR Q3 numbers released the day before. IPAR earned $0.24 for the quarter, up 4 cents from Q3 2008. Earnings were helped by a pretax foreign currency gain of $900,000 million for hedging activities and bottom-line cost cutting measures increasing its gross margins by 57%.
IPAR sales declined 5% during Q3 2009 to $117.5 million. For FY 2009, the Company expects earnings of 74 cents per share. IPAR guidance for 2010 forecasts net sales of $440 million and net income approximately $23.5 million, or $0.78 per diluted share (IPAR guidance assumes the dollar remains at current levels).
Jean Madar, Chairman and CEO of IPAR recently said, "Our 2010 guidance is based in a somewhat improved economic climate, and does not include any non-recurring foreign currency hedge gains as we had in 2009".
IPAR sells products under the Burberry, Lanvin, Van Cleef & Arpels, Paul Smith, S.T. Dupont, Quiksilver/Roxy, Christian Lacroix, and Nickel brands and also sells fragrance products under trademarks owned by the company or pursuant to license or other agreements with the owners of the Gap, Banana Republic, New York & Company, Brooks Brothers, bebe, and Jordache trademarks.
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IPAR -1Year IPAR 1-Month
Gaining .6.58% this morning is Sinclair Broadcast Group Inc, (SBGI) http://www.sbgi.net/ currently trading in the $3.58 range. SBGI is a very heavily traded SmallCap. SBGI has a 52-week high of $5.29 on trailing twelve month revenues of $669 million. There is a 3-Month floor on SBGI at $3 and support at $3.50 pushing its toward $4. The mid-October anomaly at $5 (on news) convinces me buyers will come in at that level if news warrants it. This is a near-term 'Watch Closely' for me at its current price. There's a dollar or two to be made here in the next three months if the Time Warner deal works out. Can SBGI keep Time Warner costs down? Yes. SNGI has strength in its size.
TIME WARNER
Apparently Time Warner Cable is asking the public for help as it tries to curtail increases in the programming fees it has to pay to carry cable channels and broadcast stations on its systems. The nation's second-largest cable TV operator unveiled an advertising campaign last week asking cable subscribers to vote online on whether it should "roll over" or "get tough" in negotiations over the fees. Time Warner Cable said it would use the results of the survey in upcoming contract renewal talks.
Deals expiring this year include those with The Weather Channel; certain News Corp. Fox stations and FX cable channel; several Sinclair Broadcast Group Inc.'s TV stations; and some cable channels of Scripps Networks Interactive Inc., which owns Food Network and HGTV.
Barry Faber, general counsel of SBIG said TV stations charge a "bargain" compared with cable channels that don't get the same amount of viewers, such as ESPN, TNT, TBS and USA. Cable operators have "misallocated the money they spend to acquire programming by paying more for programming that's not as popular," he said. It's the old: you want the 'A' act, you'll have to book the 'D' act. SBIG owns 58 stations in 35 markets, including San Antonio, Texas, Tampa, Fla., and Las Vegas. The SBIG television group is affiliated with all major networks and reaches approximately 22% of all U.S. television households.
I like the fact that SBIG retired a bunch of costly debt in November through a tender offer, buying up 3% convertible notes 4.875% convertible notes and SBIG posted a 75% profit increase in Q3 giving shareholders a $0.19 EPS. Local advertising was down 13% but SBIG was also cost cutting the bottom-line at the same. For Q4 guidance, SBIG management said it expects net broadcast revenue to fall 11% to 13% from a year ago, totaling $143.3 million to $146.3 million. For the full year, the company forecast net broadcast revenue to drop 14% to 15%, to $544.1 million to $547.1 million.
SBGI 3-Month ISLN 3-Month
Gaining 12.31% this morning is Isilon Systems Inc., (ISLN) http://www.isilon.com/ currently trading in the $6.02 range. ISLN easily surpassed its 3-Month average daily trading volume this morning of 250,885 shares. ISLN Insiders and Institutions own nearly 2/3rds of the outstanding shares and I believe they will support the stock as it closes in on its 52-week high of $7.18 set on 10-19-09. This also a near-term 'Watch Closely' stock for me. ISLN has a 3-Month floor at $5.50 with support at $6 and spikes into the $7 range. If it does regain its high in the next 3 months, look for a new $6.50 floor.
ISLN makes network attached storage systems for storing and managing file-based data, including video, audio, digital images, computer models, PDF files, scanned images, reference information, test and simulation data, and other file-based information, as well as other unstructured data worldwide. Isilon IQ capacity nearly boggles the mind.
On November 18, ISLN deployed its IQ product as the primary repository for the Oklahoma Medical Research Foundation; increasing operational efficiency and decreasing costs in an effort to identify genetic precursors to diseases such as Alzheimer's, Lupus and Sjogren's Syndrome.
The ISLN IQ 72000X and 72NL scale-out NAS products bring a 10 Petabyte product to market. Recently, Sam Grocott, senior director of ISLN product management said, "With the new 72000X and 72NL, Isilon offers a vastly different approach - get more, pay less and enable business growth." In late October, LiveOffice, the largest provider of hosted email archiving solutions, deployed Isilon IQ to reduce storage infrastructure costs, including initial system purchase costs and operational expenditures on management, power and cooling by 75%.
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