Month: February 2019

Research – Great Lakes (GLDD) – Raising price target

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Thursday, February 21, 2019

Great Lakes Dredge & Dock (GLDD)

Another robust quarter. Selling under performing business.

Great Lakes Dredge
& Dock Corp is a provider of dredging services in the United States. The
Company operates in two operating segments namely Dredging and Environmental,
and Infrastructure.

Poe Fratt, Senior Research Analyst, Noble Capital Markets, Inc.

RATING: OUTPERFORM

  • Another quarter of strong execution. The dredging business finished the year with another robust quarter. Solid execution and restructuring benefits combined to drive strong dredging operating results. Adjusted dredging EBITDA of $33 million was well ahead of expectations in the $23 million range.Under performing Environmental & Infrastructure (E&I)
    business reclasssified as discontinued operation and sale is likely in
    mid-2019.
  • Improved execution and dredging market
    strength reinforces positive outlook.     2019 EBITDA estimate of $120.1 million reflects robust dredging market outlook, full year from Ellis Island hopper bar…


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Research – Gannett (GCI) – Fourth quarter results largely in line with expectations

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Thursday, February 21, 2019

Gannett Company (GCI)

Still finding ways to cut costs; generating a lot of cash.

Gannett Co., Inc.
operates as a news and information company. It operates in three segments:
Publishing, Digital, and Broadcasting. 

Michael Kupinski, DOR, Senior Research Analyst, Noble Capital Markets, Inc.

RATING: OUTPERFORM

  • Hits close to the mark. The company largely delivered on Q4 expectations despite weaker than expected Publishing revenue, which was down 14%. The consolidation of three production facilities in 2018, along with labor savings, and concentration on higher margin business, all contributed to the company’s ability to achieve our cash flow estimate. 
  • Okay, but, what about this year? We believe that the company has significant flexibility to manage costs again this year, through the benefit of recent voluntary staff cuts and the prospect of the consolida… 


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Research – Trovagene (TROV) – Data displays room for improvement

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Wednesday, February 20, 2019

Trovagene Inc. (TROV)

Room for improvement in early prostate cancer data.

TrovaGene Inc is a
US-based life science company which focuses on the development and
commercialization of a proprietary molecular genetic detection technology for
use in pharmaceutical development, clinical research and medical testing across
a variety of clinical disciplines, including oncology and virology. 

Ahu Demir, Ph.D., Biotechnology Research Analyst, Noble Capital Markets, Inc.

RATING: OUTPERFORM

  • ASCO GU Data
    Presentations.     The company presented early unfavorable data from the Phase 2 Study of Onvansertib in combination with abiraterone and prednisone in patients with metastatic castration-resistant prostate cancer at the Genitourinary Cancers Symposium on February 14.  The clinical benefit  in patients was determined by the prostate-specific antigen (PSA) level and reduction was observed only transiently.
  • Adjusted Dosing Schedule. We believe the adjustment in dosing schedule and levels is not uncommon in early stages of drug development, The company intends to open a second arm, reducing the dose cycle to 14 days from 21 days t…


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Research – Dyadic (DYAI) – SEC filing on track

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Wednesday, February 20, 2019

Dyadic International Inc. (DYAI)

SEC filing on track; pursuit towards Nasdaq Up-listing.

Dyadic International
Inc. is a biotechnology company developing a proprietary expression platform to
manufacture of biologic products. The company is employing C1 technology, part
of a fungi expression system, to produce variety of modalities of biologic
products, including vaccines, oncolytic viruses, monoclonal and bispecific
antibodies, as well as biosimilars.

Ahu Demir, Ph.D., Biotechnology Research Analyst, Noble Capital Markets, Inc.

RATING: OUTPERFORM

  • Now an SEC Filing company. Dyadic International announced the effectiveness of Form 10, filed with the Securities and Exchange Commission (SEC) on February 12, 2019. 
  • Nasdaq Uplisting. The company is pursuing to have its common stock listed on the NASDAQ Capital Markets Exchange. The SEC filing is a positive accomplishment moving towards the uplisting. Dyadic is required to maintain a mini…


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Research – DLH Holdings (DLHC) – Updating Estimates

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Tuesday, February 19, 2019

DLH Holdings (DLHC)

Call Confirms Solid Quarter, Moving Forward While Waiting on VA COMP.

DLH Holdings Corp is a provider of technology-enabled business process outsourcing and program management solutions in the United States. The company offer services to several government agencies which include the Department of veteran affairs, Department of health and human services, Department of defense and other government agencies. It operates primarily through prime contracts and also derives its revenue from agencies of the federal government, primarily as a prime contractor but also as a subcontractor to other Federal prime contractors.


Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

RATING: OUTPERFORM

  • Solid
    Operating Performance.     On the earnings call and in our 1×1 with management, the Company re-iterated the solid performance in 1Q19. DLH continues to garner additional value add business from its core VA and HHS customers.
  • VA COMP
    Waiting Game.     Nothing new on the VA COMP re-compete as its remains in a “quiet period.”  This contract represents nearly 40% of overall revenue. We believe DLH is well positioned to capture at least part of the contract in the re-compete. We continue to expect the re-compete to have minimal impact on DLH’s fiscal 2019 operating results…  


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Research – ProMIS Neurosciences (PMN:CA) – Initiation Report

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Friday, February 15, 2019

ProMIS Neurosciences (PMN:CA)

ProMIS Initiation Report.

ProMIS Neurosciences,
Inc., a development stage biotech company, discovers and develops precision
medicine therapeutics for the treatment of neurodegenerative diseases,
primarily Alzheimer’s disease (AD) and amyotrophic lateral sclerosis (ALS). Its
proprietary target discovery engine is based on the use of two complementary
techniques. 

Cosme Ordoñez, M.D., Ph. D.

, Life Sciences Analyst, Noble Capital Markets, Inc.

RATING: OUTPERFORM

  • Coverage initiation. We are initiating coverage on ProMIS Neurosciences, Inc. with an Outperform Rating and a $1.00 target price. 
  • A unique technology. ProMIS has developed a unique technology to identify disease specific conformational epitopes, which allows the Company to discover antibodies targeting neurodegenerative diseases such as Alzhei…


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Research – Kratos Defense (KTOS) – Industry Transaction Highlights

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Friday, February 15, 2019

Kratos Defense & Security (KTOS)

Recent industry transactions highlight value of unmanned systems.

Kratos Defense &
Security Solutions, Inc. provides engineering, information technology (IT)
services, and warfighter solutions primarily in the United States. It operates
in two segments, Kratos Government Solutions (KGS) and Public Safety and
Security (PSS). The KGS segment provides engineering, IT, and weapons systems
to federal, state, and local government agencies, primarily U.S. Department of
Defense.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to full report for rating 

  • Recent Industry
    Transactions.     Two recent acquisitions in the unmanned vehicle space highlight the value of the business. FLIR Systems announced two acquisitions over the last two weeks and while FLIR did not provide financials, our back of the envelope calculations suggest the acquisitions were made in excess of 5 times revenue, above the 4 multiple we have used to value Kratos’s unmanned business.
  • KTOS Unmanned System is a
    Game Changer.     As we have previously highlighted, the UAS business is a game changer for Kratos. We believe it is not a question of if but, rather, when the Company will begin to reap the fru…


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Research – ACCO Brands (ACCO) – Long -term strategy in play; difficult quarter

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Thursday February 14, 2019

ACCO Brands (ACCO)

A Tough Ending to a Difficult Year.

ACCO Brands
Corporation designs, manufactures, sources, markets, and sells office products,
academic supplies, and calendar products primarily in the United States,
Canada, Northern Europe, Brazil, Australia, and Mexico. It operates through
three segments: ACCO Brands North America, ACCO Brands EMEA, and ACCO Brands
International. 

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

RATING: OUTPERFORM

  • A Tough End to the Year. ACCO reported 4Q18 revenue of $529.3 million and adjusted net income of $42.9 million, or $0.41 per share, below our forecast of $558.1 million and $0.43, respectively, and consensus of $553 million and $0.43, respectively. For the full year, revenue came in at $1,941.2 million and adjusted EPS at $1.14.
  • A Confluence of Events. 2018 top line was impacted by reduced sales to North American wholesalers, reduced calendar sales and lower Australia and Mexico sales, among others. Margins were negatively impacted by unfavorable product and cust…


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Research – Cumulus Media (CMLS) – Raising price target

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Thursday, February 14, 2019

Cumulus Media (CMLS)

A win,win.

CUMULUS MEDIA, Inc. (NASDAQ: CMLS) is a leading audio-first media and entertainment company delivering premium content to over a quarter billion people every month — wherever and whenever they want it. CUMULUS MEDIA engages listeners with high-quality local programming through 428 owned-and-operated stations across 87 markets; delivers nationally-syndicated sports, news, talk, and entertainment programming from iconic brands including the NFL, the NCAA, the Masters, the Olympics, the GRAMMYS, the American Country Music Awards, and many other world-class partners across nearly 8,000 affiliated stations through Westwood One, the largest audio network in America; and inspires listeners through its rapidly growing network of original podcasts that are smart, entertaining and thought-provoking. CUMULUS MEDIA provides advertisers with local impact and national reach through on-air, digital, mobile, and voice-activated media solutions, as well as access to integrated digital marketing services, powerful influencers, and live event experiences. CUMULUS MEDIA is the only audio media company to provide marketers with local and national advertising performance guarantees.

Michael Kupinski, DOR, Senior Research Analyst, Noble Capital Markets, Inc.

RATING: OUTPERFORM

  • Strengthening its position. Two transactions were announced that will 1) reduce debt and 2) strengthen its market position. The company sold 6 stations for a combined price of $103.5 million, at an estimated 17 times cash flow. Separately, it swapped stations with Entercom (ETM: Not Rated) to have a developed radio cluster in Indianapolis. 
  • Moves viewed favorably. The company has a significant number of under penetrated markets. As such, swapping out of those markets for developed station clusters should increase total company margins. Furthermore, asset…


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Research – DLH Holdings (DLHC) – Solid 1Q19

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Thursday, February 14, 2019

DLH Holdings (DLHC)

10Q reveals solid 1Q19.

DLH Holdings Corp is
a provider of technology-enabled business process outsourcing and program
management solutions in the United States. The company offer services to
several government agencies which include the Department of veteran affairs,
Department of health and human services, Department of defense and other
government agencies.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

RATING: OUTPERFORM

  • Year Off to a Great Start. DLH Holdings filed its 10Q for the period ended 12/31/2018 last night. The filing reveals a solid start to the year. Revenue of $33.8M and diluted EPS of $0.13 was above our estimate of $32.5 million and $0.06, respectively, and beat consensus estimates of $32.1 million and $0.07, respectively.
  • Solid Execution. The 11.7% year-over-year revenue increase was due to an expansion of workload volumes on both the VA and HHS contracts. An improved quality of revenue drove gross margin up to 23.1% from 21.6%, while SG&…     


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Research – Albany International (AIN) – Quarterly results surpass expectations

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Wednesday, February 13, 2019

Albany International Corp. (AIN)

Grand finale to a stellar quarter.

Albany International
Corp. is a textiles and materials processing company. The Company operates
through two segments: Machine Clothing (MC) and Albany Engineered Composites
(AEC). Its MC segment supplies permeable and impermeable belts used in the
manufacture of paper, paperboard, nonwovens, fiber cement and various other
industrial applications. 

Christian Herbosa, Research Analyst, Noble Capital Markets, Inc.

RATING: Market Perform

  • Surpassed Guidance by Leaps and Bounds. AIN finished 2018 with full year revenue growth of 36% over 2017 in the AEC Segment and full year adjusted EBITDA of $212.1 in the MC segment. These results significantly exceeded the company’s original guidance ranges of 20%-30% revenue growth in AEC and adjusted EBITDA of $180-$195 in MC.
  • AEC Improves Efficiency Ahead of Schedule. During Q4, AIN achieved adjusted EBITDA margins of 17.9% in the AEC Segment nearly achieving the company’s 2020 target. These margins may continue to gradually improve…


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News – High-yield bonds: Trash or Treasure?

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The case for high-yield bond investing.

(Note: related companies are at base of the story and all the sources
listed in the “Balanced” section)

High-yield bonds, once thought of as appropriate only for sophisticated investors or bond investment houses, have become more commonplace in recent years with the spread of high-yield bond ETFs.  Through these ETFs, individual investors can have a diversified exposure to an investment class with characteristics of both bonds and equities.  But investing in high-yield bonds is not for the faint of heart.  High-yield bonds performed poorly in 2018 causing the spread between junk bonds and treasuries to widen.  This potential for higher return begs the question:

Is now a good time to invest in high-yield bonds?

Research – Great Panther Silver (GPL) – Beadell acquisition approved

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Tuesday, February 12, 2019

Great Panther Silver (GPL)

Shareholders Approve Great Panther Acquisition of Beadell Resources.

Great Panther Silver
Ltd is a precious metals mining and exploration company. It owns two mines
Topia and Guanajuato Mine Complex (GMC). The Topia operations produce silver,
gold, lead, and zinc whereas the GMC operation produces silver and gold.

Mark Reichman, Senior Research Analyst, Noble Capital Markets, Inc.

RATING: OUTPERFORM

  • Shareholders
    vote to approve.      Great Panther shareholders approved the company’s acquisition of Beadell Resources Limited (ASX: BDR) and a name change to Great Panther Mining Limited.  The transaction was also approved by BDR shareholders who will receive 0.0619 new GPL shares for each BDR share held on the anticipated February 25th record date.
  • Transaction
    terms.      With the issuance of new shares at an exchange ratio of 0.0619, Great Panther will be issuing 103.6 million new shares bringing the total number of shares issued and outstanding to ~273.0 million.  Upon com…


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