Applied Materials, Dendreon, and Hansen Medical

Just a few notes today on three of the companies I own or follow.

Applied Materials (AMAT) had a bang-up quarter, reporting on May 15. Management has been predicting market share gain because of new tools for the semiconductor industry, some based on Applied's deeper abilities in materials processing science. Revenue was $2.35 billion, up 7% sequentially from $2.19 billion and 19% from $1.97 billion in the year-earlier quarter. GAAP EPS (diluted earnings per share) were $0.21, flat sequentially from $0.21 and up from negative $0.11 year-earlier. Non-GAAP EPS was $0.28.

Applied is on two separate cycles: the semiconductor process upgrade cycle (for instance, right now the transition from 28 nm processes to 20 nm processes) and the end-device demand cycle, which tends to follow global economic ups and downs. Long-term investors have to learn to ignore the cyclical nature, or use it to buy AMAT when it is cheap. As I write it is at $20.19, cheap if EPS keeps growing. Pays a divident of $0.10 per quarter too, working out to just under 2% per year at the current price. Applied is waiting for regulatory approval to combine with Tokyo Electron. If the merger goes well they could crush the competition. For more see my Applied Materials Q2 2014 notes.

Dendreon (DNDN) continues to make progress despite its woes. Early Phase II data in its study for its vaccine for urothelial cancer is encouraging. But unless the final Phase II data is extremely strong, we still have a large, expensive, slow Phase III trial to attempt to gain regulatory approval. In the meantime everything depends on how management reduces the cash burn. Some data due to be presented later this month may also encourage more patients and doctors to prescribe Provenge; any increase in revenue would be helpful. There is a lot of short interest in this stock as shorts bet that Provenge sales will plunge (something they've been predicting for 2 years) and the company will go bankrupt before European sales of Dendreon ramp up in Q1 2015. For more see my Dendreon Q1 2014 notes.

Hansen Medical's (HNSN) stock price has been on a downward tear since it hit  52-week high of $2.89 on February 11. It sank to $1.10 on May 12 and now has had a dead-cat bounce, probably short covering, back up to $1.31 as I speak. Hansen Medical has two catheter-cased robots, one for electrophysiology and one for vascular surgery, that are much praised but seldom sold. With a market cap of $146 million and Q1 sales of $3.7 million, you can see why it is a highly speculative, venture-capital type of bet to make. Still, there is always next quarter; they claim the sales pipeline is strong, it is just hard to get hospitals to actually commit to new capital equipment purchases. I think the questioning of Intuitive Surgical's robots has not helped. For more see my Hansen Medical Q2 2014 notes.

I own all three stocks (but not Intuitive Surgical). I reserver the right to buy more, or to sell my shares, at any time. I am an investor and financial journalist.