Two More Buys! Entr & Catm

Discussion in 'Stocks' started by stonedinvestor, Oct 26, 2010.

  1. Folks I can't help myself. I see two stocks I like enough to buy. The problem for us market timers is next week the Fed will begin his QE2 purchases and the market is set up to be greatly disappointed.

    The risk in not buying here is one or both will have a huge earnings report before next week. OR that the market embraces QE2 if it's big enough and framed the right way and we have a great race for performance from all the under performing hedge funds.

    The risk of buying now is one or both lays an egg at earnings and/or next week the market corrects in response to QE2.

    With Cardtronics we have the added risk of the company having missed earnings once before & Tom Harken has a bill in congress that probably won't go anywhere that keeps ATM's fixed at 50 cents and of course if rates were to raise.... I don't see any of that happening.

    It's a bit of a gamble but gambling is what we do.


    why buy: Folks the move from lap top to TV has begun. New TV's have instant facebook and youtube, NETFLIX etc... to get the downloaded movies to look good on the TV you need Entropic's chips.

    For years it seems technology companies have been talking about linking your TV, computer, digital video recorder, game console and other electronic gadgets together in a home network, allowing you to share content among devices.

    Now it can be done. Entropic Communications, a San Diego maker of semiconductors and software that power home networks, has finally begun to see home-network talk translate into big sales.

    The company's chips are primarily being used to allow consumers to access multiroom digital video recorder services offered by pay-TV providers such as Verizon, DirecTV and cable outfits. So the real niche here is watching your DVR in other rooms without buying two set top boxes.

    Entropic expects third-quarter sales of $60 million to $61 million -- up from $31 million from the same quarter a year earlier.

    A Bet On MoCA!

    Entropic helped to pioneer a technology standard for connecting devices via coaxial cable that already sits behind the walls in the majority of U.S. homes. It's called the Multimedia over Coax Alliance, or MoCA. This is akin to getting fiber into the home using existing copper wire-- it's huge. Everyone has coaxial in their walls in the big cities.

    Accdording to the company they have a 70% market share in this area-- MoCA appears to be the de facto standard now.

    "MoCA is going to completely dominate North America" said Lee Ratliff, a senior analyst with technology research firm iSuppli. "The big question is how many (chip suppliers) will there be three years from now. Broadcom has a history of marching into a new market and taking over everything."

    Ah, alas I own BRCM too but I see Broadcom making a play for Entropic soon. Wouldn't you?

    Ratliff noted that Entropic landed a major victory when DirecTV started using its chips this spring. Broadcom had designed a MoCA chip specifically for DirecTV, he said.

    "They decided to go with Entropic anyway. I don't know the reasoning behind the decision. But it tells me Entropic has legs," he said.

    One reason these home networks have been slow to take off is a lack of compelling video on the Internet besides porn, as well as limited bandwidth to handle high-quality, high definition video streams from the Web. Now, that's beginning to change.

    Consumers can get significantly higher download speeds these days from Internet providers, particularly the cable companies. Netflix, Best Buy, Blockbuster and others are offering movies and TV shows for download over the Internet -- the type of shows that consumers are most likely going to want to watch on a big-screen TV not a laptop!!!.

    "It's possible for consumers to get 20, 30, 50 megabits per second," download speeds, said Ratliff. "But without a home network, what do you do with it? Your PC can't make use of all that bandwidth, and it certainly can't move it around the home."

    In addition, television makers and retailers are betting big on Web- connected televisions this Christmas this is more business for Entropic.

    Wi-Fi doesn't always work reliably with big files. It is subject to interference because it operates over unlicensed wireless spectrum. When customers are watching a high-definition movie they paid to download or stream over the Web, they're not going to accept spotty connections, although, they do appear to accept lousy sound via music downloads from Apple. With film, however, and with a huge plasma TV there is no room for anything less than perfection. MoCa from Entropic is a bet on that trend.

    Stock #2 Cardtronics. CATM
    why buy: Largest non bank ATM provider.

    Cardtronics operates over 30,000 ATMs in the U.S., Puerto Rico, the U.K. and Mexico. Additionally, the company works with merchants like 7-Eleven, Costco, CVS, and other major retailers and gas stations.

    Last earnings report these guys did very well:

    Revenues increased 7% year over year to $133 million. Gross margin also improved, up 240 bps to 32.5%. These 2 factors lead to a 53% jump in EPS, to 26 cents. Analysts were looking for 19 cents, giving Cardtronics its fifth earnings surprise in the past 6 quarters. (like I said they did miss one)

    Additionally, management said they are confident about the new services Cardtronics offers and its future impact on the company's growth.

    Additionally I've run into some folks buying or recommending the name. In particular Fifth Third analysts & Zacks.

    If Cardtronics continues to meet earnings expectations, annual growth rates will be 53% this year and another 27% in 2011. That's pretty hot for a sort of financial play! Overall growth rate approx 40%.

    The PE now is 34 which is rich but the forward PE is just 13!!!! This is one of the easiest ways to buy a high growth story folks buy a high PE before it changes next year and the stock picks up value investors.... for now it's momentum.
    CATM's price-to-sales ratio is 0.8 times.

    Let's see how these two names work out before buying more. ANAD just missed the cut and entry into my portfolio today, watching that one.

    Other stocks on watch: ASYS // GBX // EPAY

    Goood Luck Everyone! ~ stoney
  2. daveyd72


    Love the info... Really like the ENTR story.

    Keep up the good work. I owe you a few drinks for the LYnas pick.

    Thanks for the ideas...

    Davey D
  3. From a technical standpoint CATM looks a little overbought. But ENTR looks ready for a nice quick pop. I think we should see at least a 20% return on ENTR at todays price of $8.50 by years end. I think I may put in an order to buy tommorrow. Thanks.
  4. Great Job Guys!

    You were absolutely correct! ENTR is $9.40 or something in the pre!

    Check the tape action yest on CATM too... a trained eye will see the truth.

    Guys I started covering ENTR a ways back at $9.72 and the news was allllll good.
    raised outlook Sept 13 @ I believe from memory $9.50!

    So here we are with a great cost basis right at the blast off point. This is going alot higher.

    ANAD almost tempted me but we must maintain some form of control. They report Nov 2-3 let's just read the report.

    Several stocks I felt tried to lure me yesterday. It was an interesting day, while the markets were negative a lot of the high beta stock I watch were going green and in a pretty big way; I almost felt market makers were trapping some folks for a correction.

    Since you guys have a good handle on which picks top buy first... maybe you can help me with a small problem I have-

    I may have pulled a big boo boo with MMR. If you look at the recent 5 day action right there a $1 lower in that cradle you can mark " stoney sells out of fear "

    I had a good size chunk bought recently where the price is presently and then since i wasn't aware entirely of the ebbs and flows of the runup, when the stock went down a buck I panicked that it might plunge further and I bailed. Next day up a buck. It's one of those moments you really don't want to have in multiple accounts.

    Now of course the double negative-- jump back in and down again! that would send me over the cliff-- or Stock takes off WITHOUT me! & I jump out of 3rd story window. I just don't see how I win here at the moment unless I jump back in AND it goes up... so that's the question: WHAT DO YOU THINK OF MMR? ~ stoney
  5. Taking a few late to the party lumps scaling in to ENTR this morning, but you're right, it does look promising for the future.

    MMR has had a decent run with anticipation of the drilling ban being lifted. Now that's happened, what else they got? Natty gas sucks wind and unless you see a substancial rise in that over the next 6-12 months I don't see much else here that would make me a buyer at these levels. Of course I've been wrong about just about everything lately, so maybe you should ignore my "opinion".

    Alert Alert ! WTF!

    BUY ENTR! I'm a bit put off by this big swing we were almost $9.40 now we are down!

    I guess because earnings were sort of in line but don't forget CC @ 4:30 and no future 4th Q guidance has been given yet! as well THEY ACTUALLY BEAT BY 1 CENT THIS IS BEING MIS REPORTED BY BARRONS AND OTHERS.

    This will take out $9.40 tomorrow or my name isn't stonedinvestor!!!!

    The company, which makes chips for connected home entertainment systems, posted revenue of $61.3 million, a bit ahead of the company forecast for $60 million to $61 million, with non-GAAP profits of 18 cents a share. The Street has been forecasting $63.3 million and 18 cents.

    ENTR, which in the regular session rose 42 cents, or 4.9%, to $9.01, in late trading is down 31 cents, or 3.4%, to $8.70.

    Although in line with analysts the co's own numbers were beaten. This qtr
    revenue increased 47 percent to 50 percent from the Company's revenue of $40.7 million in the second quarter, ended June 30, 2010. The Company's previous guidance for the third quarter was for revenue to range between $51 million and $53 million. They crushed that!

    "Entropic recorded its sixth consecutive quarter of revenue growth and posted record revenue and profitability for the quarter," said Patrick Henry, president and chief executive officer of Entropic Communications. "During the quarter we benefitted from increasing adoption of our MoCA home networking products by multiple Pay-TV service providers as well as a solid ramp in our solutions for the direct broadcast satellite market. We believe we are in the very early stages of a multi-year market expansion in the connected home entertainment market and are well positioned for continued revenue and earnings growth."

    Upgrades Coming I Hope!:

    MMR- I tend to agree their gas to oil ratio is a bit much towards gas, this is a specific well story and I can most likely do better elsewhere. It's just my history with selling on a low like that is that the stock goes much higher. ~stoney
  7. If you go to streetinsider it says ENTR beats by 1 cent. Whatever, a strong CC will get the upgrades flowing tomorrow. This feels HIGHLY manipulated. I don't believe this tape at all. We'll see.

    Lets firm up the watch list which has but 8 names presently:

    (1) JKS. Jinko was his namo! This is an extremely powerful solar name I've been envying for quite some time. one thing I do is stack up my buy ideas and then just do a simple profit margin and rev growth test. JKS topps out on my list so it's #1 despite it's unrelenting price compared to it's peer group.

    (2) ASYS- another solar play in a way, been trading sloppy around $17.00

    (3) ZAGG- I hate these guys. I read all the reviews and the public hates their product. Yet their protective covering is being pushed at Best Buy & they are selling.

    (4) EPAY-

    (5) 2 insurance names I'm kicking around- HIG & PGR

    (6) SGEN- Strong biotech name a LT winner.

    (7) ANAD-

    (8) MMR-
  8. WOW! ENTR getting hammered. Great buying opportunity? Where have I heard that before? Scooping up more below 8. Sure would have been a great short though. Dang!
  9. I don't know about that Caprtain we're only down 50 cents from purchase I'd rather be on the long side.

    Take a look at this stock RVSN.

    It's a classic example of how to write a confusing PR on earnings. GAARP non GAARP charges I challenge you to make heads or tails of that report. They guided in line for christs sake and it's up 11%. read the cash metrics and then read ENTR's again.

    What a complete joke. The company may have released some whispers about the next quarter because someone named Signal Hill is out with comments.I found this roaming the net but have NO confirmation on it-- tomorrow we should get clarity on all fronts. I expect to get this sell off right back.

    ENTR Entropic Comms ests raised for Q4 and FY11; still see upside to FY2011 ests; stock seems very inexpensive at these levels with $1.70 in cash; sell off unwarranted - Signal Hill (8.03 -0.98) -Update.....

    It's times like these that make you question the market. It doesn't help I have my big decision on AVNR tomorrow or Monday. Starting to feel a wee bit queezy which is never a good sign. In investing (like baseball) bad luck happens in bunches, so we really must have a strong rebound tomorrow or my name isn't stonedinvestor!!!!

    Ok off to the Vet dog walking funny... arthritis maybe. ~si
  10. daveyd72



    GREAT CALL on BW...

    I owe you more than drinks on that one. I'm not worried about ENTR still love the story. As long as the market doesn't pop ENTR should be a big winner.

    This week should be interesting. I think will see a big correction the later part of this week.

    Keep up the great work...

    Davey D
    #10     Oct 31, 2010