Research – Orion Group (ORN) –

Thursday, May 9, 2019

Orion Group Holdings (ORN)

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Orion Group Holdings Inc is a US-based company which provides solutions in marine construction, design and specialty services both on and off the water in the continental US, Alaska, Canada, and the Caribbean Basin.

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

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Research – Townsquare Media (TSQ) – Digital business flourishes

Wednesday, May 8, 2019

Townsquare Media (TSQ)

Will The Company Get The Investor Respect It Deserves?

Townsquare Media Inc is an entertainment and media company offering digital marketing solutions in the United States and Canada. It owns and operates radio stations, social media properties focusing the small and mid-cap companies. Services offered to the clients include live events, local advertising, digital advertising, e-commerce offerings, few others. 

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

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  • Q1 exceeds expectations. Revenues of $93.7 million in line with our $93 million estimate on the strength of its Digital businesses. Operating cash flow (adj. EBITDA), however, was better than our estimates at $19.5 million (versus our $17.8 million est.) and above its previous guidance of $17.5 million to $18.5 million. The results reflected the absence of its Music Festival business, which is treated as discontinued operations.  
  • Digital a big piece of the company. Its Digital business, which grew a strong 20% plus in the latest quarter, now represents approximately 33% of total company revenues. This total sets Townsquare apart from its peers that average digital revenu… 


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Research – Vectrus (VEC) – First quarter 2019 update

Wednesday, May 8, 2019

Vectrus Inc. (VEC)

Can Vectrus Reach Its $2.5 Billion Revenue Goal?

Vectrus Inc is a U.S.-based company that provides services to the U.S. government. The company generates nearly all its revenue from the United States Department of Defense. The company offerings are categorized into three types.

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

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  • 1Q19 Results. Vectrus reported above expected revenue of $325.9 million in the first quarter, but EPS of $0.62 ($0.69 adjusted) was below expectations. We had forecast $321 million and $0.77, respectively. Vectrus saw particular strength in its European and Middle Eastern
    markets, which more than offset a weaker U.S. Higher expenses were behind the
    EPS miss.
  • Backlog Remain Strong. The Company ended the quarter with $1.1 billion of funded backlog, up 60% sequentially. Book-to-bill in 1Q19 was 2.0x. Pr… 




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Research – electroCore (ECOR) – Initiation of Coverage

Wednesday, May 8, 2019

electroCore (ECOR)

Small Piece of Migraine Market Could be a Big Deal.

electrocore Inc is a commercial-stage bioelectronic medicine company with a platform for non-invasive vagus nerve stimulation therapy initially focused on neurology and rheumatology. Its product gammaCore is FDA-cleared for the acute treatment of pain associated with migraine and episodic cluster headache in adults.

 

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

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  • Market Opportunity. Upon establishment of reimbursement coverage, we expect to see a ramp up in revenue and further adoption in the market in H219. We believe potential approval in prevention of migraine and acute migraine treatment in adolescents to be a potential value generator, and the migraine indication to be the dominant market for electroCore.
  • Protraction in Commercialization. electroCore is engaging in multiple key aspects to foster commercialization by expanding the sales force, reimbursement coverage, as well as promotional and educational programs. We believe electroCor… 





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News – Cell Cycle Regulators as Cancer Therapeutics

The Importance of CDKs (Cyclin-dependent kinases)

(Note: companies that could be impacted by the content of this article are listed at the base of the story (desktop version). This article uses third-party references to provide a bullish, bearish and balanced point of view; sources listed in the “Balanced” section) 

Cell proliferation is a tightly regulated
process by the cell cycle machinery in normal tissues, while dysregulated
cellular proliferation and aberrant proliferation is a hallmark of cancer. Cyclin-dependent
kinases (CDKs) are critical regulatory enzymes that drive cell cycle
transitions, control cell division and proliferation. Many of the key concepts
of CDK biology were discovered over 20 years ago through the study of yeast
.
In 2001,
Doctor Leland H. Hartwell, R. Timothy
Hunt and Paul M. Nurse were awarded the
Nobel Prize
for their discoveries of “key regulators
of the cell cycle”.

There are currently >20 members of the CDK family. The cyclin D/cyclin-dependent kinases 4 and 6 (CDK4/6) are regulators of cell cycle and signal through cell cycle pathway involving p16, an endogenous suppressor of CDK4/6, cyclin D1, the regulatory subunit of CDK4/6, and retinoblastoma (Rb) protein, a tumor suppressor. Controlled phosphorylation and deactivation of the Rb protein by the CDK4/6 complex is crucial for the normal cell cycle progression. Unhindered activity of CDK4/6 pathway can result in alterations of cyclin-dependent kinases stimulating cell cycle pathway and cell proliferation in cancer cells. Selective CDK4/6 inhibitors “turn off” these kinases and dephosphorylation of Rb, resulting in a block of cell-cycle progression preventing the proliferation of cancer cells. 

Figure 1. Immune Mechanism in
Response to CDK4/6 Inhibitors

Source: AACR 2018

Research – Dyadic (DYAI) – Another licensing agreement

Wednesday, May 8, 2019

Dyadic International (DYAI)

What Does Another Licensing Agreement Mean?

Dyadic International Inc. is a biotechnology company developing a proprietary C1 expression platform to express and manufacture biologic products. The C1 technology is part of a fungi expression system, which utilizes inexpensive substrates yielding a high level of production. Dyadic is currently improving and optimizing the production of biological products in a C1 expression system.

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

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  • Second Sub-licensing Deal. Following a sub-licensing deal with Luina Bio announced on April 29, the company announced a second sub-licensing agreement with biotech company Alphazyme. Alphazyme produces molecular biology enzymes for the molecular tool industry including, custom DNA and RNA molecules, genomic medicines and genetic testing. Dyadic’s C1 technology platform meets Alphazyme’s requirements for high quality, low cost production of enzymes on an industrial scale.
  • Terms of the Deal. Dyadic will be granted an equity stake in Alphazyme,
    and is entitled to receive milestone payments and royalties upon the
    commercialization of C1 expressed Alphaz…


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Research – Entravision (EVC) – Update on full year 2018 results

Wednesday, May 8, 2019

Entravision Communications (EVC)

Oh, What A Relief It Is.

Entravision Communications Corporation is a diversified Spanish-language media company utilizing a combination of television and radio operations to reach Hispanic consumers across the United States, as well as the border markets of Mexico. 


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

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  • In line Q4. Fourth quarter cash flow of $20.7 million was in line with our $21.4 million estimate, on lighter than expected revenues at $82.1 million (versus our $87.1 million estimate). The $5 million revenue variance was all from the company’s Digital media business and reflected a management decision to focus on profitable revenue growth. 
  • No material accounting issues. The company explains away the late quarterly filing and the non material nature of the new auditors findings. The company appears wil… 


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Research – KeyW (KEYW) – First quarter 2019 results

Wednesday, May 8, 2019

KeyW Holding Corporation (KEYW)

Does First Quarter Miss Matter?

KEYW Holding is a provider of mission-critical cybersecurity, cybersuperiority, and geospatial intelligence solutions to U.S. government defense, intelligence, and national security agencies. Its solution includes collection, processing, analysis, and dissemination of intelligence information in cyberspace and geospace domains. 



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

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  • 1Q19 Results. KeyW reported revenue of $113.8 million, adjusted EBITDA of $8.8 million, and a GAAP net loss of $0.08 per share. We were at $122 million, $10.4 million, and a net loss of $0.03 per share, respectively. Revenues were anticipated to decline due to the ending of the flight services contract but a push out of certain product revenue caused the miss. Notably, these product revenues are expected to be captured in the second and third quarters.
  • Business Development. First quarter awards were $87 million, with the bulk, 79%, from new business and base growth. Quarter-end backlog was flat at $1.1 billion. Trailing twelve month win rate remained relatively unchanged at 48%. The Company continues to expect several of the $100 million opportunities to be awarded over the next several quarters…



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Research – DLH Holdings (DLHC) – Second quarter 2019 Review

Wednesday, May 8, 2019

DLH Holdings Corp. (DLHC)

Are Acquisitions on the Horizon?

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.

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  • Reports 2Q19 Results. Revenue for the quarter came in at $33.8M, down slightly year-over-year, and below our $35 million estimate. EBITDA came in at $2.9 million and EPS $0.10. We were at $3.25 million and $0.13. Gross margin of 23.9% was ahead of our 23.1%, while operating margin of 6.9% was modestly below our 7.3% estimate.
  • Quarterly Highlights. The y-o-y revenue decline was due primarily to the timing of workload volume on HHS contracts. The improvement in direct expense relates to decreased professional service and travel cos…


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Research – TherapeuticsMD (TXMD) – First quarter 2019 earnings update

Tuesday, May 7, 2019

TherapeuticsMD (TXMD)

Will Revenue Trends From Imvexxy be Recognized?

TherapeuticsMD Inc is a major drug manufacturing with a focus on creating and commercializing products targeted exclusively for women. The company intends to commercialize advanced hormone therapy pharmaceutical products. 

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

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  • Solid Imvexxy
    Revenue Growth. 
    Net revenue generated by Imvexxy reached $2.0 million in Q1 2019 (+122%) compared to $0.9 in the fourth quarter of 2018 with sustained growth in prescription and refill rates; approximately 31,200 prescriptions in April 2019 (47,500 prescriptions in Q4 2018). In our view, increasing market share of Imvexxy will be meaningful to eradicate skepticism on commercialization.
  • Bijuva Launch to Follow
    with Annovera. 
    Annovera is set to launch in Q3 2019, following Bijuva’s launch in April 2019. We continue to highlight the market and cost synergies of Bijuva and Imvexxy, and also no…






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Research – Ducommun (DCO) – First quarter 2019 review

Tuesday, May 7, 2019

Ducommun Incorporated (DCO)

Commercial Aerospace Still a Positive…For Now.

Ducommun Inc is a leading global provider of engineering & manufacturing services for high-performance products & high-cost-of failure applications used primarily in the aerospace and defense, industrial, medical & other industries. 

 

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

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  • Commercial Aerospace Drives Top
    Line Beat. 
    First quarter revenue was 14.7% higher than last year at $172.6
     million, meaningfully beating our expectations of $160 million. Commercial aerospace applications, namely the Boeing 737 platform, drove the year-over-year revenue increase contributing an additional $15.7 million more than in Q1 2018.
  • Margin Enhancement Across the
    Board. 
    Gross, adjusted EBITDA, and operating profit margins of 20.7%, 12.6%, and 3.5% were all a meaningful improvement over last year’s first quarter margins of 17.8%, 9.6%, and 3.5%, respectively. This enhanced profitability can largely be attribut… 


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Research – Endeavour Silver (EXK) – Rating lowered to Market Perform

Tuesday, May 7, 2019

Endeavour Silver Corporation (EXK)

Challenging Times; Investment Rating Lowered to Market Perform.

Endeavour Silver Corp is a precious metal mining company. The company is primarily engaged in silver mining and owns three high-grade, underground, silver-gold mines in Mexico. Its other business activities include acquisition, exploration, development, extraction, processing, refining and reclamation.

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

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  • Weaker than expected first quarter.  Endeavour reported a first quarter loss of $13.3 million, or ($0.10) per share, compared to earnings of $2.3 million, or $0.02 per share, during the prior year period.  We had forecasted a loss of $780 thousand, or ($0.01) per share.  The variance to our estimate is attributed to increased costs associated with continued challenges at the Guanacevi mine and underperformance at the Bolanitos and El Compas mines.  All-in sustaining costs increased 36.6% due to lower production and higher cash operating costs, inventory write-downs, employee severance payments, exploration and general and administrative expenses.
  • Lowering estimates.  We now forecast a 2019 loss of ($0.18) per share and EBITDA of $8.6 million, compared to our prior estimates of $0.04 per share and EBITDA of $36.6 million, respectively.  Additionally, we have low… 




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Research – Genie Energy (GNE) – Increasing estimates; strong results

Tuesday, May 7, 2019

Genie Energy Ltd. (GNE)

Acquisitions boost results. Can this be duplicated?

Genie Energy Ltd through its subsidiaries operates as a retail energy provider; and an oil and gas exploration company. It operates through three segments: Genie Retail Energy; Afek Oil and Gas, Ltd.; and Genie Oil and Gas. The company resells electricity and natural gas to residential and small business customers primarily in the Eastern and Midwestern United States and offers energy brokerage and advisory services.

Mike Heim, Senior Research Analyst, Noble Capital Markets, Inc.

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  • Genie Energy reports higher
    adjusted EBITDA fueled by acquisitions.  
     Genie energy reported 2019 first-quarter adjusted EBITDA of $10.4 million versus $8.6 million for the same period last year.  Improved results reflect the positive contribution of new operations in Finland, the acquisition of Prism Solar, and a new municipal aggregation agreement.  Higher results came despite weather headwinds that decreased natural gas sales. 
  • Customer growth was impressive. Customer growth was strong with meters rising 6.9% year over year and 23.5% quarter over quarter.  The company’s churn rate dropped to 5.3% versus 7.6% in the first quarter last year and 7.1% in the mos…



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