Aug 27, 2010 10:04 AM PDT
Trends, Observations, and Exclusive Opinion
Three SmallCaps Producing Earnings for Shareholders
MKTX: Q2 Record Revenues, +$0.18 EPS, and Regulatory Positioning
ZAGG: Big-Box Marketing Witnessed First Hand: Impressive
AUDC: Strong Q2 and New Board Controller Expansion
First up this morning we have MarketAxess Holdings Inc., (MKTX) http://www.marketaxess.com/ currently trading in the $13.22 range on a 3-Month average daily trading volume of 159,691 shares. MKTX has a 52-week high of $17.44 set on 04-15-10 with current trailing twelve month revenues of $124+ million and a positive, corresponding diluted EPS of +$0.52. I really like those earnings. MKTX is the operator of a leading electronic trading platform for U.S. and European high-grade corporate bonds, emerging markets bonds and other types of fixed-income securities. Yesterday MKTX released its Q2 ’10 numbers. "We are pleased to report another quarter of record revenues and earnings and the strongest quarterly free cash flow generation in the firm's history," said Richard M. McVey, chairman and CEO of MKTX. "In addition to the strong current results, we are actively engaged in the regulatory reform process and look forward to participating as a swap execution facility in the new e-trading market structure." Great timing for MKTX. For Q2 ’10 MKTX reported record revenues of $35.3 million, up 36.7% over Q2 ’09 and net income of $7.2 million, up 124.9% over Q2 ’09. Q2 ’10 produced +$0.18 per share on a diluted basis. MKTX knows how to generate revenues and +earnings for its shareholders and fitting in seemingly perfect with exchange desires for swaps and derivatives in the new financial reform bill, MKTX is a long-term (1 Yr) ‘Buy’ consideration for me.
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Next up we have ZAGG Inc., (ZAGG) http://www.zagg.com/ currently trading in the $3.17 range on a 3-Month average daily trading volume of 210,528 shares. ZAGG has a 52-week high of $7.49 set on 08-13-09 with current trailing twelve month revenues of $39+ million and a positive, corresponding diluted EPS of +$0.13. I like those earnings. ZAGG makes and sells coverings under the invisibleSHIELD, ZAGGaudio, and ZAGGskins brand names. ZAGG offers approximately 4,000 precision pre-cut designs of its products, through online channels, big-box retailers, electronics specialty stores, resellers, college bookstores, Mac stores, and mall kiosks. I was standing in line at a Best Buy store this week and low and behold, for all the waiting consumers playing on a big screen TV to amuse them while they wait, a very long infomercial on ZAGG plastic coverings. It was incidentally, a very well done advertisement. What great exposure to its core market. Last week ZAGG management said it had completed independent testing to determine whether their protective skins products help improve antenna concerns associated with the Apple iPhone 4. Based on conclusions from internal tests, independent lab tests and research with consumers in the wireless industry, both the invisibleSHIELD and ZAGGskins help prevent loss of signal strength that has been attributed to placing the hand over the antennas on the lower left-hand corner of the phone. Said Brian Packer, VP of Marketing for ZAGG, “Nobody wants to hide that amazing device behind a bulky case just to save the signal, and by using the invisibleSHIELD or ZAGGskins, they don’t need to.” ZAGG is a short-term (6 Mo) ‘Buy’ consideration for me. ZAGG will release its 2010 Q2 results after the close of trading on Tuesday, August 10, 2010.
Finally this morning we have AudioCodes Limited (AUDC) http://www.audiocodes.com/ currently trading in the $2.72 range on a 3-Month average daily trading volume of 102,969 shares. AUDC has a 52-week high of $4.39 set on 04-26-10 with current trailing twelve month revenues of $131+ million and a positive, corresponding diluted EPS of +$0.07. AUDC just posted its Q2 ’10 numbers: Revenues were $36.5 million compared to $34.8 million Q1 ’10 and $30.4 million for Q2 ’09. GAPP net income in Q2 ’10 was $2.1 million, or $0.05 per share, compared to GAAP net income of $1.7 million, or $0.04 per share in Q1 ’10, and a GAAP net loss of $1.1 million, or ($0.03) per share, for Q2 ’09. Nice turnaround. AUDC is a provider of Voice over IP (VoIP) technologies and Voice Network products. Earlier this week, AUDC announced the expansion of its Enterprise Session Border Controller (E-SBC) capabilities for the Mediant 1000 and Mediant 3000 platforms. With this expansion of E-SBC for its Mediant platforms, AudioCodes is seeking to address the needs of those users who want a combined solution of sophisticated Media Gateways with a cutting-edge Session Border Controller, as well as those users who want stand-alone Session Border Controllers. Give the customers what they need. At approximately $1.50 off its high, AUDC is also a short-term ‘Buy’ consideration for me.
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