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The Conference Board's Consumer Confidence Index fell unexpectedly to 47.7 in October versus analysts predictions of 53.1 and the major markets seem to ignore the news and persist in their four-day see-saw indecision. SmallCap stocks UCTT, QUIK, APAC and VICL all posted early gains on positive, individual news and expectations.
Q3 Earnings Reported, Q3 Earnings Expected Today
'Outperform' Coverage Initiated and a Flu Vaccine Maker Fights Back
Gaining over 26% this morning is Ultra Clean Holdings Inc., (UCTT) http://www.uct.com/ currently trading in the $6.38 range. UCTT shot past its 3-Month average daily trading volume of 166,120 shares early in the session. At that price, UCTT is 87 cents off its 52 week high of $7.25 set on 10-14-09. UCTT has made a steady advance since August (see the chart below) and yesterday's after market Q3 2009 results helped pushed the stock this morning. I like UCTT because its business is 'key' to the re-emerging semiconductor business.
UCTT Q3 numbers included: Revenues of 41.3 million, an increase of 78% from Q2 09, but a decrease of 31% from the same period a year ago. Gross margin for Q3 09 was 7.9%, compared to a loss of 3.7% for Q2 09, and 9.1% for the same period a year ago.
UCTT is on the comeback trail. Even with a 7 cent loss in Q3 09, that loss is small compared to the 66 cent loss in Q2 09. UCTT even managed to decrease its debt in the Q2-Q3 sequential quarters. And there was Q4 guidance to boot yesterday- management said, "... Our revenue guidance for the fourth quarter is $58 million to $63 million, with earnings per share in the range of $0.01 to $0.06." This is a 'Buy' stock for me at this point. With the improving semiconductor industry, equipment and assemblies to produce chips and wafers are a necessity in the production chain.
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UCTT QUIK
Gaining 5.8% this morning is QuickLogic Corp., (QUIK) http://www.quicklogic.com/ currently trading in the $3.10 range. At that price, QUIK is 29 cents off its 52-week high of $3.39 set on 10-20-09. QUIK easily topped its 3-Month average daily trading volume this morning. I think $3 is the bottom here and $3.25 the new near-term threshold. QUIK is going to release its Q3 2009 numbers today after market and if there is at least a hint of good news, my estimation is that the stock will beat its 52-week high and set a new mark.
QUIK has a niche going as a developer of computing products: Power Savings. Last week, QUIK said released samples of its ArticLink II VX2, low-power platform that uses up to 80% lower power than a standard backlit LCD while providing a TV-quality picture. The platform reduces processor duty-cycle to further extend battery life.
And the market for that niche? Smartphones, multimedia phones, feature phones, mobile internet devices, netbooks, smartbooks, mobile TV devices, and portable navigation devices. Lower battery usage equals more speed when an application increases demand.
Forget day-trading this stock. It's a 'Buy' at its threshold and then a near-term watch closely.
APAC VITL
Gaining 5.7% this morning is APAC Customer Services Inc., (APAC) http://www.apaccustomerservices.com/ currently trading in the $6.88 range. At that price, APAC is 14 cents off its 52-week high of $7.02 set on 10-15-09. APAC is a very heavily traded SmallCap and has great support. If you look at the chart, you'll see its climb from $5 at the beginning of August. I don't think it's through climbing. APAC has trailing twelve month revenues of $263 million and during the 'Great Recession' managed to produce a trailing twelve month diluted EPS of $0.49.
Today's value jump came as research house William Blair initiated coverage with an 'Outperform' rating. I too, think it will outperform the market. APAC has 13 'Care' centers in the U.S. and abroad and in addition to handling customer service for everything from hotels to entertainment, APAC has a strong foothold in the medical and dental industries and a HealthCare bill should only increase its value.
Gaining 8.68% this morning is Vical Inc., (VICL) http://www.vical.com/ currently trading in the $3.62 range. VICL has a 3-Month average daily trading volume of 1,298,510 shares. Lots of interest in VICL. If you look at the chart, it is a classic 'Mountain Peak' with an August ascent to over $5 in early September and then; down it came. Can it comeback? Yes.
VICL released two publications yesterday (essentially white papers) in a special issue of Vaccine, highlighting data on the VICL anti-flu drug Vaxfectin. Today's jump in stock price is based on the findings in those papers and the performance of the drug.
VICL has a deal with the U.S. Navy to develop a swine flu vaccine and is in Phase I clinical trials for a potential vaccine. In September, VICL management said the company swine flu vaccine prompted "robust" immune responses in 100% of animals infected with distinct strains of the virus. The current Phase I clinical trials involve human subjects. I can't recommend this stock solely on its H1N1 product, but VICL also has products in Phase I status that treat breast or prostate, colorectal, ovarian, or non-small cell lung cancer; melanoma; or carcinomas of the upper GI tract, colon, kidney, or bladder. That puts it on my 'Watch Closely' list as other trails proceed through their paces.
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