When to Buy More than You Need: MLNX, CRAY, DEER

Trends, Observations, and Exclusive Opinion

Three ‘Buy on the Dips’ Considerations

MLNX: Co Tools Move Virtual Machine Migration Up 200%

CRAY: Co Expects Full-Year 2010 to be Profitable

DEER: Co Returns $0.18 cents per share in Q2

First up this morning we have Mellanox Technologies Ltd., (MLNX) http://www.mellanox.com/ currently trading in the $16.13 range with a 3-Month average daily trading volume of 557,191 shares. MLNX has a 52-week high of $27.48 set on 04-22-10 with current trailing twelve month revenues of $144+ million and a positive, corresponding diluted EPS of +$0.57. I really like those earnings. MLNX is primarily focused on end-to-end connectivity solutions for servers and storage that optimize data center performance. The Co’s virtual machine migration tools are a favorite among Fortune 500 companies. In layman’s terms (which are my terms), MLNX applications let information and platforms move from one server to another server with zero down time. Well, you get the drift. MLNX will be demonstrating its VM migration with vSphere vMotion on top of Mellanox ConnectX-2 EN 40 Gigabit Ethernet adapters during VMworld 2010 currently being held in San Francisco. The MLNX benchmark results using 40GbE show more than 200% improvement in migration time over 10GbE and a 10x performance improvement over 1GbE. The demonstrations will showcase MLNX’s ethernet performance in providing connectivity solutions to private and public cloud infrastructure. At almost $10 off its 52-week high and with those ttm earnings and a 200% improvement in migration times for customers, MLNX is a ‘Buy on the Dips’ consideration for me.  

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Next up this morning we have Cray Inc., (CRAY) http://www.cray.com/ currently trading in the $5.79 range on a 3-Month average daily trading volume of 345,073 shares. CRAY has a 52-week high of $8.85 set on 09-17-09 with current trailing twelve month revenues of $203+ million. CRAY makes and sells supercomputers to government agencies, academic institutions, and commercial enterprises. Earlier this month CRAY posted its Q2 numbers. CRAY lost $6.6 million in the second quarter as its revenue fell and that amounted to 19 cent loss per share. But CRSY management said it expects to record most of its projected $305 million to $325 million in revenue in the later part of the year. If that occurs, CRAY said it would post a full-year profit, but did not provide a specific estimate. "I remain very excited about our 2010 prospects, led by a number of significant wins and continued strength in custom engineering," CRAY president and CEO Peter Ungaro said in a statement. "While we still have a lot of work left to do, I'm confident we are on track to deliver a strong year." At $3 and change off its high, CRAY would also be a ‘Buy on the Dips’ consideration for me.

Finally this morning we have Deer Consumer Products Inc., (DEER) http://www.deerinc.com/ currently trading in the $7.99 range on a 3-Month average daily trading volume of 322,258 shares. DEER has a 52-week high of $18.97 set on 11-23-09 with current trailing twelve month revenues of $117+ million and a positive, corresponding diluted EPS of +%0.68. I like those earnings. DEER makes and sells home and kitchen electronic appliances in China. Earlier this month DEER said its net income jumped in the second quarter as revenue more than doubled for the Chinese home appliances company. DEER earned $6 million, or 18 cents per share, in the period ended June 30. That's up from earnings of $1.7 million, or 8 cents per share, in the same period last year. Nice Growth. Revenue soared to $34.5 million from $15.3 million. DEER credited the revenue increase to its aggressive expansion of sales in China and growing its market share in other regions, include South America, Asia, the Middle East and Europe. Domestic Chinese market sales rose from $1.7 million to $11.4 million. DEER said based on order placements and customer interest, it expects to have strong earnings growth momentum through the rest of the year. At $11 off its high, DEER is also a ‘Buy on the Dips’ consideration for me.

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