Too Late to Buy In? LEI, MRCY, CMRG

Trends, Observations, and Exclusive Opinion

LEI: Co Cancels March Agreement to sell 4 Million Shares

MRCY: New Product Expands Presence in Electronic Warfare

CMRG: A Very Smart Move for Retailer to Enter New Turf  

First Up this morning is Lucas Energy Inc., (LEI) http://www.lucasenergy.com/ currently trading in the $2.03 range. LEI has a 52-week high of $3.39 set on 06-21-10 with current trailing twelve month revenues of $1+ million. LEI is an independent oil and gas company in Texas. LEI has interests in approximately 12,500 gross acres of oil and gas leases in South Texas. LEI operates 30 producing wells. Last week LEI announced that its joint venture operating partner, Hilcorp Energy Company, has permitted the Hagen EF No.1H well in Gonzales County, Texas. LEI has a 15% carried (no capital cost to Lucas) working interest in this first well which is planned to be spudded by November 1, 2010. The permit is for a 4,500 foot lateral in the Eagle Ford formation. William A. Sawyer, President and CEO of LEI said, "The day has arrived that we are moving toward Eagle Ford production which should make a significant increase in the Company's production." A week earlier, LEI posted a Termination of a Material Definitive Agreement entered into on March 26 with WR Hambrecht under which the Company could sell up to 4,000,000 shares of common stock from time to time in an at-the-market public equity offering program. That’s not going to happen. LEI at half its 52-week high would be a ‘Buy on the Dips’ consideration for me.  

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Next up this morning we have Mercury Computer Systems Inc., (MRCY) http://www.mc.com/ currently trading in the $13.41. MRCY has a 52-week high of $14.33 set on 01-27-10 with current trailing twelve month revenues of $199+ million and a positive ttm diluted EPS of +$1.23. I really like those earnings. MRCY makes and sells real-time digital signal and image processing systems and software for embedded and other specialized computing markets. MRCY operates in two segments: Advanced Computing Solutions and Mercury Federal Systems. The ACS segment provides high-performance computing solutions, such as single board computers, digital signal processors, and integrated subsystems to the aerospace and defense, semiconductor, and telecommunications markets. The MFS segment focuses on services and support work with federal intelligence agencies and homeland security programs. In mid-Sept MRCY announced that it is bringing to market an open, standards-based solution for the Active Electronic Warfare domain. The MRCY product exploits the multi-plane capabilities and open standard characteristics of OpenVPX, implemented in a 6U form factor to deliver maximum flexibility and performance for both ground mobile and fixed ground platforms. “We are pleased to be able to expand our capabilities in the EW (electronic warfare) space,” said Randy Dean, VP Product Line Management. The need for these types of solutions is driven by conditions on the modern battlefield, where defeating enemy threats and protecting soldiers sometimes requires sophisticated capabilities. Active EW systems can be used to counter Improvised Explosive Devices (IEDs) and missiles that rely on radar-based targeting. With those ttm earnings and at $1.50 off its high, MRCY would be a ‘Buy on the Dips’ consideration for me.

Finally this morning we have Casual Male Retail Group Inc., (CMRG) http://www.casualmalexl.com/  currently trading in the $4.35 range. CMRG has a 52-week high of $4.49 set on 04-26-10 with current trailing twelve month revenues of $391+ million and a positive ttm diluted EPS of +$0.25. I like those earnings. CMRG operates as a specialty retailer of men’s apparel in the United States, Canada, and Europe. CMRG operates its stores under the Casual Male XL, Casual Male XL Outlets, Rochester Clothing, B & T Factory Direct, Shoes XL, and Living XL trade names. As of January 30, 2010, CMRG operated 395 Casual Male XL retail stores, 65 Casual Male XL outlet stores, and 19 Rochester Clothing stores. I like this move; Bon-Ton stores (NYSE: BONT) will provide CMRG’s men’s big and tall apparel through Bon-Ton’s website and, beginning in spring 2011, certain Bon-Ton stores. Smart. BONT operates 277 department stores in 23 states. Even within 30 cents of its high, CMRG is a short-term (6 Mo) ‘Buy’ consideration for me.

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