Research – Comtech Telecommunications (CMTL) – Deeper dive in 2Q19 results

Tuesday, March 12, 2019

Comtech Telecommunications (CMTL)

A Deeper Dive into 2Q19; Shares “On Sale” Following Recent Decline?

Comtech Telecommunications Corp. engages in the design, development, production, and marketing of products, systems, and services for advanced communications solutions in the United States and internationally. It operates in three segments: Telecommunications Transmission, Mobile Data Communications, and RF Microwave Amplifiers. 

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

Refer to full report for price target, fundamental analysis and rating.

  • Solid Quarter, But Stock Reacts Poorly. Comtech reported solid 2Q19 results, as we highlighted in our March 7, 2019 report. In spite of the operating results, the shares dropped over 14% on the news before recovering somewhat off the intraday lows.  
  • A Reaction to Two Large Contracts. We believe the stock weakness can be tied to the delay in two large contracts CMTL is pursuing: BFT-2 and troposcatter. Both, multi-hundred million dollar potential awards. While in neither case have final awar… 




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Research – Euroseas (ESEA) – Lowering Price Target

Tuesday, March 12, 2019

Euroseas Ltd. (ESEA)

Attractive pure play container company.

Euroseas Ltd.
provides ocean-going transportation services worldwide. The company owns and
operates containerships that transport dry and refrigerated containerized
cargoes, including manufactured products and perishables; and drybulk carriers
that transport iron ore, coal, grains, bauxite, phosphate, and fertilizers. 

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

Refer to full report for price target, fundamental analysis and rating.

  • Second quarter after EDRY spin-off
    down sequentially due to weaker container market. 
    Excluding drydock expenses, adjusted EBITDA was $1.6 million
    below our estimate of $1.8 million and below 3Q2018 adjusted EBITDA of $1.9
    million, mainly due to lower time equivalent (TCE) rates. Versus our estimate,
    lower TCE rates (-$416/day) and higher management fees (+$80/day) more than
    offset lower opex costs (-$300/day) and G&A expenses ($150/day).
  • Adjusting 2019 EBITDA estimate to
    reflect lower rates/downtime. Slight market improvement expected this year. 
    To incorporate 4Q2018 results and the new contract fixtures,
    our new 2019 EBITDA estimate is $8.7 million (from $9.6 million). While rates
    early in the year have been expected to be lower, we expec
    … 






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Research – Aurania Resources (ARU:CA) – New drilling has commenced, Funding secured

Monday, March 11, 2019

Aurania Resources Ltd. (ARU:CA)

With New Funding Secured, the Drill is Turning.

Aurania Resources Ltd. is a Canada-based junior mining exploration company engaged in the identification, evaluation, acquisition, and exploration of mineral property interests, with a focus on precious metals and copper. Its flagship asset, The Lost Cities-Cutucu Project, is in southeastern Ecuador in the Province of Morona-Santiago. The company also has several minor projects in Switzerland.

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

Refer to full report for price target, fundamental analysis and rating.  

  • Drilling
    has commenced at Crunchy Hill.
      Aurania began scout
    drilling at its first target, Crunchy Hill, on March 3
    rd
    The plan is to drill 5 to 8 holes, with each hole taking 5 to 7 days to
    complete.  Drilling will follow on the company’s 10 other epithermal
    gold-silver targets.  Results will be released after several holes have
    been completed.  It generally takes a week to send samples to the
    laboratory and three weeks to receive results.
  • Rights
    offering raised ~C$5.25 million.
      Aurania Resources
    issued 1,946,172 new common shares associated with its recent rights
    offering.  The offering raised gross proceeds of ~C$5.25
    million.   Following the offering, there were 34,882,738 common
    shares outstanding.  Aurania intends to use the net proceeds to fund
    exploration, including scout drilling, payment of concession fees and gen…







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Research – Great Lakes Dredge (GLDD) – Investor Meeting Highlights

Monday, March 11, 2019

Great Lakes Dredge & Dock (GLDD)

Investor meetings confirm positive outlook.

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.

Refer to full report for price target, fundamental analysis and rating.

  • Investor Meetings Confirm Positive Outlook. Late last week, we hosted investor meeting with GLDD’s senior management team, CEO Lasse Petterson and CFO Mark Marinko. The meetings were well received and investor interest remains high. 
  • Listed below were the topics that were covered over several meetings. Update on Environmental & Infrastructure
    (E&I) limited. Recent Award Should Help Sales Pr





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News – Green New Deal: Environment Savior or Economy Destroyer?

Do the costs of fighting climate change outweigh the benefits?

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

The Green New Deal (GND) is a congressional resolution proposed by Democratic Congresswoman Alexandria Ocasio-Cortez and Democratic Senator Edward Markey.  It calls for a cut in greenhouse-gas emissions to net zero over 10 years while at the same time guaranteeing family-sustaining jobs, high-quality health care, and affordable housing.  It is supported by several prominent Democratic senators and presidential candidates such as Cory Booker, Kirsten Gillibrand, Kamala Harris, Amy Klobuchar, and Elizabeth Warren.  While the resolution is unlikely to pass and is legally unbinding, it does raise questions about the trade-offs between protecting the environment and supporting economic growth.

Research – McClatchy (MNI) – Outlook for 2019

Friday, March 8, 2019

The McClatchy Company (MNI)

Why meeting expectation really doesn’t matter.

The McClatchy Co is
the third-largest newspaper publisher in the United States, operating 30
dailies and approximately 50 nondaily publications in 29 markets nationwide. 

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

Refer to full report for price target, fundamental analysis and rating.

  • Q4 results were largely in line. After adjusting for one week less in this period and real
    estate sales in the prior year quarter, the company met expectations, with cash
    flow down 8.2%, in line with its previous cash flow guidance of down 8% to down
    12%. The bright spot was that Digital only advertising increased a healthy 10%,
    an acceleration from the rate of growth in the year earlier quarter. 
  • Crossing into the Digital divide. Management stated that it expects
    digital only advertising to surpass newspaper print advertising in 2019, which
    should help moderate revenue trends. In addition, management expects additional
    saving in operating expenses, bene





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Research – Trovagene (TROV) – 2018 full year update

Friday, March 8, 2019

Trovagene Inc. (TROV)

Focus on upcoming catalyst, 2018 earnings review and early 2019 developments.

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.

Refer to full report for price target, fundamental analysis and rating.  

  • Progressing clinical programs. The company continues to focus on
    advancement of its clinical programs. We have seen two clinical trials readouts
    up to date 1) from Phase 1b/2 acute myeloid leukemia (AML) study-
    demonstrating favorable clinical benefit (80% disease control rate) among 12
    acute myeloid leukemia (AML) patients and 2) from Phase 1/2 metastatic
    castration resistant prostate cancer (mCRPC) program- leading to dosing
    adjustments to extend drug exposure and clinical benefit in mCRPC patients.
  • Upcoming catalysts.  We are expecting to see a few key value generating
    events 1) further data readouts from Phase 1b/2 acute myeloid leukemia
    (AML) program at American Association for Cancer Research (AACR) annual
    meeting, 2) data readout f





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News – Do We Need to Prepare for War in Space?

Space Force: Necessary to Maintain U.S. Strategic Dominance?

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

On February 19
th President Trump called for the creation of “Space Force,” a new U.S. Department of Defense branch. To reside as part of the Air Force, Space Force would control U.S. military operations in space. Space Policy Directive 4 directs the Defense Secretary to write a legislative proposal for Congress to set up the Space Force and create a civilian undersecretary of the Air Force for space. The Directive also re-commits the Trump Administration goal of creating Space Command, which would be a separate branch of the U.S. military. According to the Defense Intelligence Agency’s (DIA) Challenges to Security in Space, space-based capabilities provide integral support to military, commercial, and civilian applications. As longstanding technological and cost barriers to space have fallen, more countries and commercial firms are participating in satellite construction, space launch, space exploration, and human spaceflight.

The DIA report goes on to say, “Chinese and Russian military doctrines indicate that they view space as important to modern warfare and view counterspace capabilities as a means to reduce U.S. and allied military effectiveness.” Both reorganized their militaries in 2015, emphasizing the importance of space operations. Both have developed robust and capable space services, including space-based intelligence, surveillance, and reconnaissance. Both states are developing jamming and cyberspace capabilities, directed energy weapons, on-orbit capabilities, and ground-based antisatellite missiles that can achieve a range of reversible to nonreversible effects. Other nations, including North Korea and Iran, as well as non-state organizations, have develop and/or are developing similar capabilities.

Research – Eagle Shipping (EGLE) – Long-term outlook positive

Thursday, March 07, 2019

Eagle Bulk Shipping Inc. (EGLE)

Focusing on strategic execution and positive long-term outlook.

Eagle Bulk Shipping
Inc. is a US-based drybulk owner-operator focused on the Supramax/Ultramax
mid-size asset class, which ranges from 50,000 and 65,000 deadweight tons in
size; these vessels are equipped with onboard cranes allowing for the
self-loading and unloading of cargoes, a feature which distinguishes them from
the larger classes of drybulk vessels and provides for greatly enhanced
flexibility and versatility- both with respect to cargo diversity and port
accessibility. 

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

Refer to full report for price target, fundamental analysis and rating.

  • Another solid quarter of
    outperformance…
     4Q2018 EBITDA of $23.5 million was below our estimate,
    but well above 3Q2018 EBITDA of $20.2 million. The negative variance to our
    estimate was driven by slightly lower TCE rates and higher opex, which more
    than offset more available days due to higher chartered in capacity.
  • …but adjusting
    estimates to reflect current market outlook and higher downtime associated with
    the expanded scrubber program.
     We are lowering our 2019 EBITDA estimate to $83.6
    million from $91.9 million even though rate outpe



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Research – Comtech (CMTL) – Exceeds 2Q quarterly expectations

Thursday, March 7, 2019

Comtech Telecommunications (CMTL)

Exceeds 2Q Expectations, Raises Full Year, With Potential Upside. Another Acquisition?

Comtech Telecommunications Corp. engages in the design, development, production, and marketing of products, systems, and services for advanced communications solutions in the United States and internationally. It operates in three segments: Telecommunications Transmission, Mobile Data Communications, and RF Microwave Amplifiers. 

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

Refer to full report for price target, fundamental analysis and rating.  

  • Strong 2Q19 Operating Results. Net sales jumped 22.7% to $164.1 million, with Adjusted EBITDA of $23.2 million,  up 60.0%. GAAP EPS came in at $0.32 and adjusted EPS was $0.40. 2Q19 results exceed our, and management’s, expectations. Business momentum remains strong and the pipeline of opportunities continues to increase.
  • FY2019 Targets Raised. Full year FY2019 revenue expectations now in the $645-$660 million range and Adjusted EBITDA in the $85-$89 million range. Compares to prior guidance of $625-$640 million and $84-$88 million, respectively. Notably, resu


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Research – Kratos Defense (KTOS) – Drone prospect takes flight

Thursday, March 7, 2019

Kratos Defense & Security Solutions, Inc. (KTOS)

The Curtain Drops as the Valkyrie Takes Flight.

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).

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

Refer to full report for price target, fundamental analysis and rating.

  • Ride of the Valkyrie. Yesterday,
    the XQ-58A Valkyrie completed its inaugural flight, a significant milestone in
    the program. According to the Air Force, the aircraft behaved as expected and
    completed 76 minutes of flight time. The Air Force plans a total of five test
    flights over two phases.
  • Disruptive Technology with
    Potential Huge Impact for Kratos.
     The
    tactical drones market is anticipated to be significantly larger than the $6.2
    billion target drone market. With yesterday’s flight, Kratos is on its way of
    capitalizing on this huge opportunity





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News – DNA Data Storage: The Future of Informatics

Soon, you might have your favorite video or family photo stored on living DNA instead of magnetic tape/silicon chip.

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

At present, the world is generating data at a much faster rate
than what it takes to store it. The digital data universe is made up of things
like images and videos on cellphones uploaded to YouTube, health records stored
in hospital cloud systems, banking data accessed from ATMs, and many other
forms of digital data. The size of the world’s digital data universe is doubling
every two years, according to a recent study by International Data Corp., a
Massachusetts-based market intelligence company. It is thought that current
technologies such as magnetic tapes and silicon chips will not be enough to
store the constantly expanding digital data universe.

There is an imminent need for a new, higher-density, less-costly,
more-stable data storage solution. Because digital data is generated at a much
faster pace than it could be stored, the world is running a data storage deficit
equivalent to an estimated 7.5 zettabytes or 7.5 trillion gigabytes. This
deficit corresponds to approximately 2 billion large hard drives worth of data
or 260 billion iPhones. In 2025, pundits estimate that the world will generate
160 zettabytes of digital data. Experts believe the deficit will continue to
grow until a new technological solution emerge, which is much needed as all
silicon chips could be consumed by 2040.

The potential use of DNA to store digital data is very appealing. Scientists
have long touted DNA’s potential as an ideal storage medium for digital
data/information. The question is, can DNA replace magnetic tapes and
silicon chips as the preferred data storage system? DNA is dense (a single gram
of DNA can hold roughly a zettabyte), easy to replicate, and according to
experts, it could be stable for more than 100,000 years. Nowadays, scientists
have been able to encode all kinds of digital information into DNA sequences
including the novel “War and Peace”, Deep Purple’s “Smoke on the Water” video, and
a galloping horse GIF-film. However, to replace existing silicon-chip or
magnetic-tape technologies, DNA-based systems will have to become significantly
less costly and more predictable to read, write, and package.

DNA is the data storage system selected by nature, chosen by
evolution to carry the genetic information which encodes life. It is for this
reason scientists believe it could be utilized to readily store other types of
data such as videos, audio, text and others. Computational scientists use the
numbers 1 and 0 as a binary code for all the data stored in computer chips. In
a similar fashion, scientists could use the four main chemical compounds in DNA
— cytosine, adenine, thymine and guanine (C, A, T, G), as a code to store
digital information.

Given that DNA is relatively dense compared to other materials, a
large amount of data could be stored into a microscopic size molecule.
Moreover, DNA is far more durable than magnetic-tapes and silicon-chips, which
deteriorate in a few decades. Storing digital data into DNA nucleotide sequences
requires the synthesis and preservation of DNA molecules in an adequate
environment, which scientists believe could be accomplish with existing
technologies.

Research – Genco Shipping (GNK) – 4Q18 Results Surprise

Wednesday, March 06, 2019

Genco Shipping & Trading Limited (GNK)

4Q2018 results above expectations and positioned for rough weather ahead.

Genco Shipping &
Trading Limited, incorporated on September 27, 2004, transports iron ore, coal,
grain, steel products and other drybulk cargoes along shipping routes through
the ownership and operation of drybulk carrier vessels. The Company is engaged
in the ocean transportation of drybulk cargoes around the world through the
ownership and operation of drybulk carrier vessels. 

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

Refer to full report for price target, fundamental analysis and rating.

  • 4Q2018 EBITDA ahead
    of expectations.
     4Q2018 EBITDA of $42.4 million was ahead of
    expectations due to higher TCE rates. Adjusted 4Q2018 EPS of $0.39 was the
    fifth profitable quarter in the last six years.
  • Adjusting
    estimates to reflect 1Q2019 forward cover, market volatility and
    updated dry dock schedule.
     To include forward booking data, asset sales and
    updated dry dock info, movi…




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