Big deal: DELL, EMC TO EXPAND LINE . ROBERT WEISMAN 114 words 13 January 2006 Computer giant Dell Inc. plans to expand its alliance with Hopkinton's EMC Corp. in the data storage equipment business, Kevin B. Rollins, Dell's president, said yesterday after addressing Boston College's Chief Executives Club. Rollins, a former Boston-based management consultant for Bain Inc., said Dell and EMC agreed last month to roll out a new line of cobranded storage products this summer across a broad range of markets. The two companies have been offering cobranded storage gear only in the midrange market, although Dell also resells high-end EMC products. EMC last fall said the Dell partnership represented 11 percent of its revenues. IMO: this is what the analysts expecting for. Dell expand its data storage with EMC will bring EMC tremedous revenue in 2006. Check back my previous research on EMC and you will find that investors are waiting for this badly. Finally Dell agree to expand the business with EMC.
EMC on the bottom now, two days flat price move with large volume showing the MM is building its position here. With all the good news from analysts and contracts, we will see EMC move higher since next week. http://www.forbes.com/2006/01/13/he...echnology-0113markets07.html?partner=yahootix EMC (nyse: EMC - news - people ) also remains one of the analyst's top picks. "A multiple drop of 9 points in 2005 should put EMC in a position to finally capture most of its earnings growth, with the multiple, for the first time in the last three years, finally below EMC's normalized earning growth, yielding stock appreciation of at least 20%," the analyst noted.
Hillman's focus on the long term means watching for trends. He likes computer storage and data management companies because of increasing regulatory pressure to store and recall original data. His favorite is EMC (nyse: EMC - news - people ), with its 20% market share. "To compete in this space you really need secure, end-to-end solutions," Hillman says. "EMC has had a few years' lead on every competitor." Hardware. Health care. Homebuilders. Mark Hillman pinpoints undervalued companies in a variety of industries that his firm believes will become leaders in the long run. Same as my pick. EMC: Hardware, Healthcare: HLTH, Homebuilders: CHB, FLE. http://www.forbes.com/2006/01/18/hi...rl_0118streettalklander.html?partner=yahootix
RES: my target is around $40-50, oilfield equipment companies on average traded around $50. RES is a very solid company with wide business moat. When oil price goes up, RES up. When oil price down, RES stable. RES is not like those pure oil stocks, such as ABLE, GEOI, NGAS which are sensitive to oil price and risky. RES is relative stable and less volatility. I picked RES when it was $23. You can not find a better oilfield company better than it.
In TUES here. Technical favor trade. With the holidays come and gone, retailers have passed their biggest rush of the year. What remains is often overstocked and out of style. Last week, the top-performing stock pickers at Marketocracy bought shares of Tuesday Morning, which sells closeout merchandise, gifts and housewares, in its retail stores. Tuesday Morning at $20.66 per share, or 13.9-times earnings, is trading at its cheapest levels of the year. The company's early January announcement that its fourth-quarter same-store sales were down 5.3% and its earnings per share were down 4.5% to 84 cents per share didn't help matters much. But on that news, the stock price only dipped below $20 for one day before snapping back--showing strong resistance. With resistance on bad news and with the closeout-merchandise season starting, the M100 opened a sizable new position in the stock.
TUES Morningstar Rating 5 stars (Strong Buy) 01-18-2006 Stock Price As of 12-06-2005 $26.04 Fair Value Estimate $28.00 Consider Buying $21.60 Consider Selling $35.10 Here is the analyst report from MorningStar, share with you guys. The reason I pick TUES is majorly from TA chart. With 10% short interest, and $20 level showing strong support, I believe stock price will rebounce from here. I do not have a target at this point, but definately around $28 "Tuesday Morning is the sole national closeout retailer of first-quality, brand-name home furnishings. The company has built up a large, upscale customer base through its unique strategy of offering attractive items at compelling prices in stores that are open only during periodic three- to five-week sale events. While Tuesday Morning's stores consistently offer the same merchandise categories, limited quantities of each product are available at each sale, creating a "treasure hunt" environment. In addition, Tuesday Morning's long operating history and strong balance sheet make it the closeout retailer of choice for many of its suppliers. We think that the company's brand name recognition, loyal shoppers, and close supplier relationships provide it with a narrow economic moat. Tuesday Morning's unique business model goes beyond just its value prices and sales events. By keeping stores closed during the slow January and July selling periods and between sales events, locating them in strip malls and other low-rent areas, and using Spartan fixtures, the company keeps operating costs extremely low. Tuesday Morning's financial results are evidence of this strategy's success. Over the past five years, annual sales growth has averaged 13%, as the company has expanded its store base at a 12% average annual rate. Tuesday Morning believes the United States can support at least 1,000 of its stores. Although we expect sales growth to slow in the near term due to a weak market for home furnishings, we think the unique store format presents the company with plenty of room to expand its store base and continue growing the top line at a decent pace. The main risk is that Tuesday Morning may have problems sourcing enough quality items to sell at compelling prices as it grows. Many manufacturers are improving their inventory management, leaving them with fewer goods to sell to closeout retailers at rock-bottom prices. Growth in comparable-store sales, or comps (sales at stores open at least a year), has declined significantly from the double-digit rates of a few years ago, which could indicate that the company is having a tougher time finding first-quality goods to sell. If this trend continues, it could pressure Tuesday Morning's margins, as well as force it to increasingly offer lesser-known brands, which could hurt customer loyalty. In addition, the company's plans to accelerate store openings in the Northeast could pressure margins, thanks to higher store operating costs such as rent and labor in that region. Valuation Our $28 per share fair value estimate is based on a discounted cash-flow analysis. We expect sales growth to average about 9% per year for the next five years, driven by about 70 annual new store openings. We expect comps to be down slightly in 2005 and 2006, based on the weak current market for home furnishings, before recovering to low-single-digit levels. We expect operating margins to be challenging over the next couple of years as comps declines leave the company with less sales revenue to spread over its fixed costs. In the longer term, we anticipate that the operating margin will improve modestly, primarily based on continued gross margin improvements resulting from the company's recently implemented distribution and inventory-allocation systems. Risk The biggest risk facing Tuesday Morning is that as it continues to grow, it will become more difficult to find quality brand-name merchandise to sell at compelling values--while still generating attractive profit margins. Many manufacturers have improved their inventory management, leaving them with fewer goods to unload at rock-bottom prices. "
Focus on CHB and TUES today. Both stocks are TA rebounce play. TUES has a perfect rebounce chart from its yearly bottom $21. TUES is so cheap now that we cannot miss it. CHB open at $15.23 this morning showing a good start.
Start to load shares. Our economy is still good, unemployment is low, corporations on average earning is mild. oil price will calm down. Iran's problem will be solved soon and oil speculators will soon stop pushing the price up. Today's 200 points cut is not the stock market overvalued, but just the traders want it to. Several good stocks you can think about to load at today's bloody battle field: MPS, NDN, CHB, EMC, SCS, TUES, VECO, BMC, IM, LUV, BRO,CC Among these stocks, I prefer EMC, TUES, LUV and CHB
TUES has strong balance sheet with P/E between 14 and forward P/E 13. PEG ratio less than one. Small debt with high institutional holding. The more important number is the thin outstanding share with cheap price. Average 10 days volume is double than last average 3 months volume showing a strong buy side action. With this higher volume, the stock price was on the up trend. This is why I pick TUES. TUES is a solid company with its bottom support @ $20 level. Analysts raised TUES target to a mean $27 target.
TUES Bull/Bear comments Bulls say Tuesday Morning faces little direct competition, as the company is the sole national closeout retailer of upscale home furnishings and related items. Tuesday Morning's no-frills store environment keeps store opening and operating costs low, contributing to the company's impressive first-year returns on new stores. The company's loyal, established customer base keeps advertising costs low (it mainly advertises through mailings to existing customers) and provides a barrier to entry for new competitors. Tuesday Morning's recent investments in distribution and merchandise allocation systems should help drive continued profit margin improvements. Tuesday Morning should benefit from the continuation of the cocooning effect, as consumers spend more money on their homes. Bears Say Tuesday Morning's increased focus on opening stores in the Northeast could lead to higher store operating costs, due to higher rents and labor costs. Rising interest rates may hamper sales growth, as fewer consumers purchase new homes or remodel their existing homes with the proceeds of mortgage refinancings. My target of TUES is above $27.