Aug 27, 2010 10:04 AM PDT
Trends, Observations, and Exclusive Opinion
Three SmallCaps Test the Waters
RUTH: Test-Market Could Turn Into a New Co-Wide Revenue Stream
RVSN: Co Seeks to Buy-Back 5% of Voting Shares
BMTI: Co Raises Approximately $45 Million in Public Offering
First up this morning we have S&P SmallCap 600 company Ruth’s Hospitality Group Inc., (RUTH) http://www.rhgi.com/ currently trading in the $4.65 range on a 3-Month average daily trading volume of 384,802 shares. RUTH has a 52-week high of $6.60 set on 04-26-10 with current trailing twelve month revenues of $344+ million and a positive, corresponding diluted EPS of +$0.19. I like those earnings. As of December 27, 2009, RUTH owned or operated 152 restaurants, including 64 company-owned Ruth’s Chris Steak House Company restaurants, 66 Ruth’s Chris Steak House franchise restaurants, 19 company-owned Mitchell’s Fish Markets, and 3 company-owned Mitchell’s Steakhouse restaurants. In Mid-June, in a test-market move which I really admire, RUTH announced that its Nashville location will start catering events. This could be a new revenue stream for RUTH if it works. I like innovation and new revenue streams and ttm earnings; RUTH at nearly $2 off its high is a short-term (6 Mo) ‘Buy’ consideration for me. RUTH will hold its Q2 ’10 earnings call this Friday at 8:30 am EST.
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Next up this morning we have Radvision Limited (RVSN) http://www.radvision.com/ currently trading in the $7 range. RVSN has a 52-week high of $9.61 set on 09-18-09 with current trailing twelve month revenues of $83+ million. RVSN said yesterday the Co is commencing a self tender offer to purchase 5.0% of its voting power (currently, 976,212 RVSN shares) for $7.30 per share, net to the seller in cash, less any required withholding taxes and without interest. In connection with the offer, RVSN has scheduled an Extraordinary General Meeting of Shareholders on Tuesday, August 31, 2010 for the purpose of ratifying and approving the offer. As of July 26, 2010, there were 19,524,230 RVSN shares issued and outstanding (excluding 2,991,993 RADVISION shares held as treasury shares). As a result, if RVSN purchases 976,212 RVSN shares in the offer (the number of RVSN shares currently expected to be purchased in the offer), it would hold 3,968,205 RVSN shares in treasury, representing approximately 17.62% of the issued RVSN shares (this includes the 2,991,993 RVSN shares held in treasury on the date of the commencement of the offer). RVSN makes and sells products and technologies for videoconferencing and video telephony, as well as for converged voice, video, and data over Internet Protocol (IP) and 3G networks. RVSN is a ‘Watch Closely’ stock for me. Companies sometime consolidate voting power for a number of reasons and it would be interesting to know why management is making this particular move.
Speaking of offerings, finally this morning we have BioMimetic Therapeutics Inc., (BMTI) http://www.biomimetics.com/ currently trading in the $8.82 range on a 3-Month average daily trading volume of 168,662 shares. BMTI has a 52-week high of $15.81 set on 10-15-09. Last week BMTI said it generated about $45 million in proceeds after expenses from the sale of about 5.6 million shares in a public offering. BMTI, which makes medical devices for musculoskeletal injuries, said underwriters exercised their option to buy about 642,000 additional shares. BMTI sold the stock at $8.50 per share and will use the proceeds from the offering for general corporate purposes and to develop and support its product pipeline. That includes the Augment Bone Graft, a synthetic material for bone fusing with the goal of stimulating a permanent connection between broken bones. At a little more than half its 52-week high, newly capitalized BMTI is a ‘Buy on the Dips’ consideration for me.
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