Aug 27, 2010 10:04 AM PDT
Trends, Observations, and Exclusive Opinion
Three SmallCaps Moving Forward on Product Lines
LMAT: Medical Device Maker Always Generating Earnings
JAKK: Toymaker Lands Spielberg’s 2011 Movie ‘Real Steal’
SWIR: Road Runner Mobile Customers Can Now Get 6 Mbps
First up this morning we have LeMaitre Vascular Inc., (LMAT) http://www.lemaitre.com/ currently trading in the $5.59 range. LMAT has trailing twelve month revenues of $53+ million and a positive, corresponding diluted EPS of +$0.28. LMAT makes and sells devices and implants for the treatment of peripheral vascular disease. LMAT endovascular products include: LeverEdge, a contrast injector for injection of contrast media into blood vessels; TAArget thoracic stent graft for use in the endovascular repair of thoracic aortic aneurysm and dissection; the UnBalloon non-occlusive modeling catheter for improvement in the seal of aortic stent grafts; and VascuTape radiopaque tape for improvement in the precision of vascular and endovascular procedures. LMAT reported its Q2 ’10 numbers this week with record quarterly sales of $14.2 million and Q2 ‘10 sales increasing 12% over Q2 ’09. Geographically, organic sales growth was 23% in the Americas and 5% internationally. Net income in Q2’010 was $1.5mm, or $0.09 per diluted share versus $925,000, or $0.06 per diluted share in Q2 ‘09. LMAT also increased its share repurchase program to $5 million and raised its sales and operating income guidance for 2010. LMAT produces earnings for its shareholders and I really like that. At its current price, even at its high, LMAT is a long-term (1 Yr) ‘Buy’ consideration for me.
-----------------------------------------------------------------------
Sign-Up for Free to Receive Our Complete Opinions, Detailed Analysis, and Timely Trading Alerts on LMAT, JAKK, and SWIR.
-----------------------------------------------------------------------
Next up we have S&P SmallCap 600 company JAKKS Pacific Inc., (JAKK) http://www.jakkspacific.com/ currently trading in the $15.71 range on a 3-Month average daily trading volume of 237,409 shares. JAKK has a 52-week high of $16.74 set on 05-18-10 with current trailing twelve month revenues of $750+ million and a positive, corresponding diluted EPS of +$1.08. I really like those earnings. Last week JAKK had two significant pieces of news. The first was a master toy licensing agreement with DreamWorks Studios to manufacture, distribute and market a line of toys based on the live-action feature film, “Real Steel” from director Shawn Levy and starring Hugh Jackman. The agreement, brokered by licensing agent Striker Entertainment, includes action figures, accessories, playsets, role play, youth electronics, novelties, games and puzzles, Halloween costumes and more. JAKKS expects to launch the Real Steel product line in Fall 2011 to coincide with the film’s November premiere in theaters nationwide. “Real Steel,” from DreamWorks Studios’ partners Stacey Snider and Steven Spielberg, is currently shooting principal photography in Detroit and will be released in theaters by Touchstone Pictures. “In this action-packed, futuristic drama, 2,000-pound robots replace human boxers,” said John Blaney, SVP of Marketing at JAKK. “The robot boxers are incredibly intricate and physically astounding, and we believe they will translate extremely well to action toys.” Secondly last week, JAKK reported Q2 net income totaled $3 million, or 11 cents per share. Excluding a one-time benefit payment to the estate of Jack Friedman, net income was 17 cents per share. Friedman stepped down as co-CEO April 1 and died in May. JAKK lost a lot of money in Q2 on a number of charges for goodwill impairment, recall costs and other items that resulted in a 3 cent loss per share. Not bad at all, all things considered. JAKK management reaffirmed full-year guidance for earnings of $1.10 to $1.20 per share on revenue of $660 million to $670 million. At approximately $1 off its high and with all the accounting ‘extras’ paid, JAKK is a short-term (6 Mo) ‘Buy’ consideration for me.
Finally this morning we have Sierra Wireless Inc., (SWIR) http://www.sierrawireless.com/ currently trading in the $7.58 range on a 3-Month average daily trading volume of 182,420 shares. Earlier this month SWIR announced a new dual mode mobile hotspot device, IntelliGo that is now available on the Time Warner Cable 4G network with Road Runner Mobile. IntelliGo enables any device with Wi-Fi connectivity, and up to five devices simultaneously, to connect to the Time Warner Cable 4G Mobile Network and a nationwide 3G network for internet access on the go. While on the Time Warner Cable 4G network, customers using Road Runner Mobile can get internet speeds up to 6 Mbps (megabits per second). More recently SWIR posted its Q2 ’10 numbers with record quarterly revenue of $159.1 million, up 18% (a record) compared to Q2 ’09 and a GAPP loss of $8.6 million, or loss per share of -$0.28, compared to a net loss of $5.9 million, or loss per share of -$0.19, in Q2’09. Non-GAAP diluted earnings per share were a +$0.14. The SWIR record revenue was driven by strong demand for both its Machine-to-Machine ("M2M") and Mobile Computing products Q2 ’10. M2M revenue increased to $83.6 million, up 53% compared to $54.6 million in Q2 ’09. With the IntelliGo launch, SWIR is a short-term ‘Buy’ consideration for me.
If you'd like to receive our complete opinions, detailed analysis, and timely trading alerts on LMAT, JAKK, and SWIR, be sure to Sign-Up for the SCN Newsletter today! It's FREE.
