Thursday, July 24, 2008

Vasco Data Securities Reports Better Than Expected 2nd Quarter Earnings

Vasco Data Securities surprised Wall Street with a solid quarter lifting the stock almost 18% on over 8 times average volume. Here is what the big whig had to say about the quarter...

"We are pleased with the progress we saw in the business in Q2," stated
T. Kendall Hunt, Chairman & CEO. "Not only did we report a record level of
revenues for a quarter, but we also increased our deferred revenues and saw
a strong order flow throughout the quarter. The current order flow
reinforces our belief that our growth rates over 2007 will accelerate in
the second half of the year. We are, however, reducing our revenue guidance
for two primary reasons. One is to more fully consider the impact of our
business strategies where a larger portion of our business activity relates
to recurring software revenue, which may be deferred and recognized in
future periods. The second is to reflect a more conservative outlook for
the full year given the uncertainty of the world economies."

Net income for the second quarter ended June 30, 2008 was $7.5 million, or $0.20 per share, up 9% from $6.9 million, or $0.18 per share in the same period last year and exceeded the $0.15 predicted by the analysts.

Revenue grew by 9% to $35.4 million for the second quarter from $32.4 million in the corresponding period of the previous year, and topped Street analysts consensus estimate of $34.20 million.

Net income for the first six months of 2008 increased to $12.4 million, or $0.32 per share on revenues of $64.3 million from $11.8 million or $0.31 per share on revenues of $58.8 million in the year-ago period.

Here are a few more of the highlights from the quarter...

    Operational and Other Highlights:
-- VASCO won 516 new customers in Q2 2008 (79 new banks and 437 new
enterprise security customers). For the first six months of 2008,
VASCO won 1,107 new customers (150 banks and 957 enterprise security
-- Banco Itau (Brazil) secures more than 1.6 million end users with VACMAN
Controller/Digipass GO3
-- Independent Bankers' Bank (U.S.) secures online banking with VACMAN
Controller/Digipass GO6
-- Mizuho Bank (Japan), Intesa Sanpaolo (Italy) and Banco Itau (Brazil)
receive VASCO's Market Vision Award
-- Digipass integrated into SonicWall SSL-VPN
-- VASCO opens subsidiary in Mumbai India
-- VASCO expands US Channel Partner Program
-- VASCO ranks 5th in Fortune Small Business Top 100 and 14th in
BusinessWeek's Hot Growth Companies top 50.

Congratulations to all the longs... I still think that this is a great long term investment as the world turns more and more to online banking and security. Don't forget that Vasco Data Securities just jump up almost 17% on a day that all the major averages tumbled.

Thursday, July 17, 2008

Google Misses By 9 Cents... Big Deal

Today Google reported numbers that most companies would kill for. Revenues grew 39% year over year, but this still wasn't enough to keep the bears at bay. Analysts were looking for Earnings Per Share of $4.72 Google came in at $4.63. Revenues for Google's 2nd Quarter 2008 came in at 5.37 Billion, analysts were looking for 5.4 Billion. Of course, the knee jerk reaction to this created a sell off in after hours where Google (goog) fell about 7%.

Giving Google's already decent P/E ratio this earnings report has created a fabulous buying opportunity. There P/E ratio is currently 37, but after today's earnings report it will be closer to 32 based on a price of $490 per share! To put that into perspective Yahoo is trading at a 30 P/E ratio and Apple is trading at a 35 P/E ratio. Not to mention Google is sitting on 12.7 Billion in cash! That number alone is more than a lot of companies are even worth and Google can afford to just watch it collect interest.

Do your children a favor and go out and buy some Google stock while it is on sale. That is unless you think that Google, the Internet, Advertising and Youtube are just going to disappear. Just check out these slides below from the 2nd Quarter Earnings Report...

Tuesday, July 15, 2008

Evergreen Solar Announces The Biggest Contract In Its History

Evergreen Solar (ESLR) shares rose nearly 11.5% today as they announced a 1.2 Billion, yes with a "B" contract with the German company IBC Solar. I am sure some of you have never heard of IBC Solar so here are the quick facts. They where established in 1982 and have installed solar panels in more than 50,000 locations!

Of course this is great for Evergreen Solar which has been beaten down along with the market and since its offering of new notes this contract raises their backlog to almost 3 Billion with only 5 customers! This contract further extends through 2013 which gives ESLR even more earnings visibility. Here is what the big wigs had to say...

“We are very pleased to begin this significant long term relationship with IBC SOLAR, the largest PV distributor in the world”, said Richard M. Feldt, Evergreen Solar's chairman, president and chief executive officer. “This contract represents the single largest contract in the history of our company and is one of the largest contracts ever between a panel manufacturer and a distributor.”

“Quality comes first at IBC SOLAR”, said Udo M√∂hrstedt, President and CEO of IBC SOLAR. “Our aim is to make the use of solar energy easy and competitive for our customers. Evergreen’s solar panels are one of the highest quality products in the industry. By adding Evergreen to our product portfolio, we can meet the growing demand of our customers.”

This news comes as The Michigan Economic Growth Authority Tuesday approved a 10-year, 100 percent high-tech employment tax credit for Evergreen Solar (ESLR). Valued at $1.8 million this will help with their new Midland, Michigan plant. Not only this, but the City of Midland will give Evergreen Solar a $3.9 million property tax credit.

This company is on a roll this year, but watch out they are just about to report their earnings on Thursday July 17th, so be careful if you are just starting to build a position into this stock. There is no doubt that Evergreen Solar is a great Long Term Investment, but a earnings miss here would obviously hurt the stock in the short term. As always average into this one as it is very volatile. It looks like though that any time you can pick up ESLR for under $10 at this point would be a great time to buy more. Certainly don't wait too long before jumping into the water, the analyst have really been waking up and smelling the money on this one. The simple fact that Evergreen Solar is only a 1.24 Billion Dollar is has almost 3 billion is sales backlog! This stock is prime for a serious breakout if earnings don't disappoint and this stock is still undiscovered by mainstream wallstreet.

Wednesday, July 2, 2008

It's A Bear Market, What To Do Now?

Today the Dow Jones Industrial Average and the Nasdaq officially hit bear market territory. A bear market simply means that an average is 20% below its all time high. That's right both the Dow and the Nasdaq have hit these lows on the same day as oil climbs to new heights! So what should you do with your money that you have invested in the stock market. Well, it is really quite simple... You should do little or nothing. No one ever made a profit selling at the bottom and anyone that has an outlook of more than a couple years should be adding to their positions not selling them at the worse point possible! You should be selling when the times are good and buying when the times are bad, it is just that simple.

Sure the economy is in the tank and oil is crippling business and consumers alike, but it won't last forever. A lot of the rise in oil has to do with a weak dollar which was caused by the federal reserve lowering interest rate to help stimulate the economy. Don't get me wrong, the Federal Reserve did the right thing, they were just a little late to the party. A lot of speculators have been pumping up oil prices too, which only makes things that much worse. The public will only take it so long, before they demand action. The oil bubble will then weaken and will in turn make the markets skyrocket back upwards. Take a look at a 20 year chart of the Dow Jones Industrial Average below...

As you can see we have had corrections like this before, but the general long time trend has always been up. So let's say this time is different and oil continues to ride high. Well you should have protection, which means you should have alternative energy stocks in your portfolio. You know that with these outrageous energy cost, solar, wind and geothermal plays become all the more economically viable. Focus on the future of the world and not the past, just look at how investors did with Google, and they are just getting started! With a Democrat (most likely) coming into office you can bet that there will be some major government subsidies for all these alternative energy plays as well!

So whatever you do, don't get caught up in the selling panic and liquidate your portfolio. Even if the market continues to go down a bit more, or we even see a sell off that triggers the capitulation that everyone loves to see. We are very near the bottom and we are also very near the economic reign of terror by George W. Bush. I think history will look back at this as one of the greatest buying opportunities... Just do your research, don't buy all at once and you should do fine. Your kids will thank you...