Archive for June, 2009

Buzz Stock of the Day – SMTC Corp. (SMTX)

Tuesday, June 30th, 2009

Shares of SMTC Corp. (Nasdaq: SMTX) were up more than 25 percent on 2500-times the Ontario-based company’s three-month average volume today.

SMTC Corp. reported a first quarter net loss of $2.5 million on revenue of $48.5 million, compared to a net loss of $100,000 on revenues of more than $55 million in the year ago period. “Virtually all our customers were affected by the global recession as end market demand and inventory reductions impacted their first quarter production requirements.” Caldwell said SMTC has “undertook action to significantly reduce our cost structure, eliminate excess capacity and shift production to lower cost geographies.” Gross profit for the first quarter of 2009 decreased by $1.6 million, or 36.4%, to $2.8 million when compared to the same period in 2008. Raw materials sales for the quarter was up $500,000 over the first quarter of 2008.

According to Yahoo Finance, SMTC Corp. generated $3.8 million in EBITDA on $235.9 million in the trailing 12-month period. The company has about $445,000 of cash in the bank, and about $21 million of debt.

SMTC generated about $4.2 million in operating cash flow for the trailing 12-month period.

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Buzz Stock of the Day- Broadwind Energy (BWEN)

Friday, June 26th, 2009

Shares of Broadwind Energy, Inc. (Nasdaq: BWEN) were up more than 35 percent today.

Earlier this week, the Naperville-based wind energy company announced a realignment of its management team to advance its business development, international and technology efforts.

“Our new management structure provides the framework for pursuing international business opportunities so that we can better serve our customers, enhance our supply chain and develop additional synergies among our subsidiary companies,” said CEO J. Cameron Drecoll in a statement.

Among the recent changes were the appointment of former Chief Operations Officer, Lars Moller to President, Technology and International, a position in which he will focus his efforts on Broadwind Energy’s technology leadership and international expansion; Jess Collins who was named Group President for three Broadwind subsidiary companies – Tower Tech Systems, RBA and Badger Transport; and Don Naab, who has been named Group President for Broadwind’s Brad Foote Gear Works and EMS subsidiary companies.

Despite a first quarter net loss of $7.2 million, or 7 cents a share, Broadwind reported revenue of $53.1 million, up 51 percent over the same period last year.

A recent article stated that Broadwind, which is a maker of turbine gearing, stands to see substantial growth if the sector finds the legs so many politicians pushing.

Shares of BWEN are up more than 200 percent in the past three months.

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Buzz Stock of the Day – Crosstex Energy, Inc. (XTXI)

Wednesday, June 24th, 2009

Shares of Crosstex Energy, Inc. (Nasdaq: XTXI) were up more than 22 percent today.

Earlier this month, the Dallas-based natural gas transportation and processing company announced an agreement to sell its assets in Mississippi, Alabama and South Texas for $220 million to Southcross Energy LLC. Crosstex’s assets in Mississippi and ALabama consist of about 780 miles of intrastate gathering and transmission pipelines. The South Texas assets consist of about 1,400 miles of intrastate gathering and transmission pipelines.

Proceeds from the sale will be used to pay down more than $200 of the partnership’s debt. This will satisfy the targets for debt reductions in Sept. 2009 and Dec. 2009 established in recent amendments to its debt facilities, Crosstex said in a statement.

“The sale of our Mississippi, Alabama and South Texas assets enables us to strengthen our balance sheet as we pursue our strategy to increase liquidity, reduce leverage and improve profitability,” said Crosstex president and CEO, Barry E. Davis in a news release. “We continue to focus on the growth of our strategic assets in North Texas and Louisiana, as well as our treating business, and remain committed to being a premier provider of midstream energy services.”

More than 92 percent of Motley Fool’s CAPS members believe the stock will outperform the S&P 500 this year.

The Energy Information Administration, in its Annual Energy Outlook 2004, estimates that natural gas demand in the United States could be 31.41 Tcf by the year 2025. That is an increase of 38 percent over 2002 demand levels.

The EIA expects residential energy demand to increase 25 percent between 2002 and 2025. Residential use of natural gas is expected to increase by 1.5 percent per year from 2002 to 2010 and 0.9 percent from 2010 to 2025, increasing 25.5 percent from 2002 to 2025. Residential natural gas consumption accounts for 22 percent of all consumption in the U.S.

Probably the most important long term driver of natural gas demand in the residential sector is future residential heating applications. Between 1991 and 1999, 66 percent of new homes, and 57 percent of multifamily buildings constructed used natural gas heating. In 2003, 70 percent of new single family homes constructed used natural gas. While these new homes being built are generally increasing in size, the increasing efficiency of natural gas furnaces used to heat them compensates for the increased square footage to be heated. In general, however, the increase in the number of new homes using natural gas for heat over the next 20 years is expected to provide a strong driver for residential natural gas demand.

Buzz Stock of the Day – Alvarion (ALVR)

Tuesday, June 23rd, 2009

Shares of Alvarion Ltd. (Nasdaq: ALVR) were up nearly 10 percent today after the Israeli provider of wireless broadband technology and services announced it was chosen to deploy a nationwide mobile wireless data network in Italy.

“This contract confirms Alvarion’s Mobile WiMAX solution as the most advanced solution in the market, and our leading position as a long-term partner for WiMAX,” said Alvarion’s CEO, Tzvika Friedman.

Given Italy`s 58 million highly-dense population, WiMAX is the most economical and high-performance technology to deliver 4G broadband to businesses and residential subscribers in a wide geographic area, according to Reuters. Alvarion`s 4Motion is an advanced and field-proven solution for delivering innovative WiMAX services for a range of broadband applications in rural, suburban and urban environments.

Lawrence M. Harris, an analyst with CL King & Associates, said in a note to investors the value of the deal is more than $20 million over the next two to three years. “The Aria announcement does not change our near-term forecast for Alvarion, but adds to our confidence in the company’s outlook,” wrote the analyst, who rates Alvarion “accumulate” with a target price of $5.

On June 17, the company said it signed a deal worth more than $100 million over five years with U.S. rural broadband wireless operator Open Range Communications Inc.

Buzz Stock of the Day – Specialty Underwriters Alliance (SUAI)

Monday, June 22nd, 2009

Shares of Specialty Underwriters Alliance, Inc. (Nasdaq: SUAI) were up more than 57 percent today after news that insurer Tower Group, Inc. (Nasdaq: TWGP) agreed to buy Specialty Underwriters Alliance for about $107 million in stock.

The Chicago-based property and casualty insurer will be able to better leverage its distribution network and gain new access to Tower’s A- rating by A.M. Best Co., Tower Group said.

“We are pleased to join forces with Tower, which has a strong track record in acquisitions and providing meaningful value to shareholders,” said Specialty Underwriters’ president and CEO, Courtney Smith. “After a careful review of our strategic alternatives, our board has concluded that this transaction provides our shareholders with the best opportunity to enhance shareholders’ value. In addition, our affiliation with Tower will allow us to improve our profitability and take advantage of the current market opportunities by accessing Tower’s A- rating by A.M. Best Company and strong capitalization.”

For 2010, including the effects of the Specialty Underwriters transaction, Tower projects its diluted earnings per share to be in a range between $3.50 and $3.70 per diluted share.

Both Tower and Specialty Underwriters will host a conference call at 10 a.m. EST on Tuesday, June 23, 2009 to discuss the transaction.

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