Stocks Under $10 With David Peltier
Better-Than-Expected Earnings
We had four model portfolio companies report earnings Thursday morning. On the surface, there were no negative surprises and each stock has opened higher along with the broader market averages.Here is a review of the numbers from Imax (IMAX:Nasdaq) and Stereotaxis (STXS:Nasdaq), whose conference calls just ended. We're not taking any action in this Alert.
First, Imax delivered third-quarter results that exceeded consensus analyst estimates. The company earned 2 cents a share, which was a penny ahead of expectations. Revenue grew 33% from the previous year to $43.6 million, also coming in ahead of the consensus estimate.
The main driver this quarter was Imax's expanding theater network, as revenue from systems and joint-venture sharing both doubled year over year. While the company posted strong box office figures this quarter, results were actually down slightly from the previous year as they faced a difficult comparison with the success of last year's "The Dark Knight."
Additionally, management said that it has reached an agreement with Wachovia for a new $75 million, four-year secured credit facility. This replaces an existing $40 million credit line that was set to expire in October 2010. Imax will also retire any remaining senior notes by the end of the year.
In all, this was another solid, profitable quarter for the company. The stock was recently trading around $10.85 this morning, and even though we have an almost 300% gain in our model portfolio position, we continue to believe that Imax can trade up toward the low teens over the coming quarters.
Second, Stereotaxis delivered better-than-expected results before the opening bell. The company lost 14 cents a share in the third quarter, which was 4 cents ahead of the consensus analyst estimate. Revenue grew 25% year over year to $13.3 million, and also exceeded expectations.
It's also important to note that capital orders for the quarter were $6.3 million, up from $5 million in the second quarter. Additionally, Stereotaxis continued to make progress with regard to reducing its operating expenses, as management continues to move the company down the path toward breakeven.
Given Stereotaxis' strong order backlog and growing recurring revenue stream, we continue to believe that the company is well-positioned heading into 2010. As a result, we are maintaining our One rating, with the stock recently trading around $4.02.
Regards,
David Peltier & the TSC Research Team
David welcomes your questions on Stocks Under $10. Please
email David with your questions at
Recent Actions
Today's sharp market pullback offers a good opportunity to add shares to this well positioned model portfolio name.
11/27/09 - 10:32 AM ESTTwo model portfolio names are in the news today amid chatter on an obesity-drug study and a takeout rumor.
11/23/09 - 12:28 PM ESTAdding to our position and upgrading our rating as we believe the company will rebound in the current period.
11/20/09 - 10:58 AM ESTWeekly Roundups
We focused on researching new names for the model portfolio this week and used Friday's pullback to add shares to one holding.
11/27/09 - 02:17 PM ESTPlease note that any trading ideas suggested in the Product prior to June 9, 2009 were recommended by Mr. Frank Curzio.
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TheStreet.com Stocks Under $10 portfolio is a model portfolio of stocks chosen by the authors in accordance with their stated investment strategy. Your actual results may differ from results reported for the model portfolio for many reasons, including, without limitation: (i) performance results for the model portfolio do not reflect actual trading commissions that you may incur; (ii) performance results for the model portfolio do not account for the impact, if any, of certain market factors, such as lack of liquidity, that may affect your results; (iii) the stocks chosen for the model portfolio may be volatile, and although the "purchase" or "sale" of a security in the model portfolio will not be effected in the model portfolio until confirmation that the email alert has been sent to all subscribers, delivery delays and other factors may cause the price you obtain to differ substantially from the price at the time the alert was sent; and (iv) the prices of stocks in the model portfolio at the point in time you begin subscribing to TheStreet.com Stocks Under $10 may be higher than such prices at the time such stocks were chosen for inclusion in the model portfolio.
Past results are not necessarily indicative of future performance.| Dow Jones | S&P 500 | NASDAQ | 10-Year Note | |
|---|---|---|---|---|
| 10,309.92 | 1,091.49 | 2,138.44 | 32.31 |
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