Dot Hill, Nvidia analyst conferences

"For every sad fly, there is a happy spider"

Two interesting things happened this week near me.

Dot Hill (HILL) barely met prior guidance for Q2, and investors were hoping a slew of new customers for Dot Hill's advanced storage systems would bring in results well above guidance. The stock took a major hit following the Thursday morning Dot Hill results release and analyst conference (my notes).

The main issue in the quarter was a particular customer, typically Dot Hill's second largest, bought fairly little in the quarter. This customer services large datacenter installations, and revenue variance each quarter is significant. Dot Hill believes the customers orders will resume.

In addition, July bookings have been strong, and 4 customers are likely to release major new Dot Hill based storage systems before the end of the year. Q2 was back-end loaded, so a fair amount of product went out at the end of the quarter that will book revenue in Q3.

So what did I do? I bought more HILL yesterday, basically buying back the shares I sold in March for $5.88 per share for just $3.51. Most of my shares I bought long ago for between $1 and $2 per share.

Of course Dot Hill management could be wrong, revenue and profits might not ramp in Q3 and Q4 and on into 2015. But I think it is likely they will, and Dot Hill will be far more valuable by mid 2015 than it is today. However, keep in mind that Dot Hill has disappointed in the past. Being a small-cap data storage provider is a difficult business.

The Nvidia Q2 conference seemed like it would provide no surprises until, near the end, an analyst asked about the bitcoin computing phenomena that had raised rival AMD's results in Q4 and Q1, but then hurt them when demand dropped off in Q2.

CEO Jen-Hsun Huang said why Nvidia GPU's were typically not used for bitcoin mining, or cryptocurrency in general. AMD's GPUs provide more performance per dollar. Mr. Huang argued extensively earlier in the conference (and in prior conferences) that because of its installed base and superior software, Nvidia GeForce GPU's are gamers' favorites. Maybe so, but it appears to be a well known fact in the computational community that if you want a lot of computation for your buck you want to go with AMD. The reality is that certain workloads do better with Nvidia's architecture, and certain workloads do better with AMD. I see this all the time, even within games, with some games getting better benchmarks with AMD, others doing better with Nvidia, assuming the same pricing range.

Vertex, Alexion, Gilead, Dot Hill and Mylan

And another story published at Seeking Alpha:

Vertex Price and Prospects Compared to Alexion

In addition to Vertex Pharmaceuticals (VRTX) and Alexion (ALXN), I discuss the controversy over Gilead's (GILD) pricing of its Hepatitis C cures. Vertex and Alexion are far more sensitive to the pricing issue than Gilead. However, Gilead already is overweight in my portfolio. I continue to consider Alexion and Vertex among my top choices if I add another stock to my list.

Mylan (MYL) and Dot Hill (HILL) both reported Q2 results and held analyst conferences this morning. Both disappointed the market. I remain long on both. Dot Hill in particular looks ready to ramp revenue nicely in the second half, but fell prey to traders who time horizon ranges from a microsecond to a few days.

My notes on today's conferences:

Dot Hill Analyst Conference & Results

Mylan Analyst Conference & Results

Regeneron, Dot Hill, Mylan and Nvidia to report this week

This is probably the last intense week of earnings season for me. I still have a bit of cash in my portfolio, and like to try to wait until the end of the season before deploying cash, or not, or even raising more by selling some stock.

First up Regeneron (REGN) Tuesday morning, the conference begins at 5:30 AM my (Pacific) time, so I might wait to listen to the recording. In any case my notes will eventually appear at Regeneron Q2 Analyst Conference Notes. I started a very small position in REGN in June, so this will be my first conference as a stockholder. I'll be looking to see how revenue is ramping, but most of the value is still in the pipeline, so any news on that will be of great interest.

I'll be listening to supercomputer manufacturer SGI on Wednesday, but I don't expect much from them. But you never know. If the stock is cheap enough and they show signs of improving, I would consider buying back in. My notes will be at SGI Q2 analyst conference.

Thursday is the busy day. Starting with Mylan (MYL) at 7:00 AM PT, notes at Mylan Q2 2014 analyst conference. Mylan is a generic drug maker. I'll be looking for a report on biosimilars, but mainly the question is how did overall revenue come in, and what were costs and resulting earnings. I think 5 years down the road I will be happy to have started a position this year, but I don't see where a short term pop could come from.

Dot Hill (HILL) is at 8:00 AM PT. This little-known company makes data storage equipment that is rebranded by an increasing number of storage companies. It is my largest small cap holding, so I am keenly interested. At this point it is mainly a question of how much their end customers ramp sales, which is hard to predict. The stock price did extremely well in 2013, and I think will be up again significantly by early 2015, but predicting quarter to quarter sales and profits and stock price is difficult. Dot HIll Q2 2014 analyst conference.

Nvidia is the only company in this lot that has a recognizable brand name. I don't own any NVDA but I have in the past. Nvidia has great graphics engineers and a plan to capitalize on graphics computing both on mobile devices and on the cloud computers that service them. I own stock in rivals AMD and Marvell (MRVL). I would certainly considering owning NVDA at some price point, and will be watching for its cloud computing progress in this normally seasonally slow fiscal quarter, which includes July. Nvidia Q2 2014 analyst conference.

Of course many more companies report this weak, and I enjoy getting other financial writer's reports, and hearing the opinions of others in the investment community. While I will read articles from any source, I generally find that Seeking Alpha, which I write for, is consistently more helpful to me than other sites. I also read the SEC documents of a company before investing; only fools don't.

This week: Amgen, Vertex, Akamai ...

It's another heavy week of earnings reports for me.

First, some links to some of my summaries of analyst conferences held last week:

Celgene (CELG) reported strong earnings growth of 17% y/y on July 24. I am bullish on Celgene, given its potential to expand Revlimid revenue and its pipeline, but it is not cheap right now on a trailing earnings basis.

Alexion Pharmaceuticals (ALXN) had earnings up 56% y/y. I like Alexion's model, but again a lot of future earnings growth is already built into the present price.

Agenus (AGEN) is a small-cap, development-stage company focussed on immunology, including Check Point Modulators (CPMs). In the quarter Agenus reported good Phase 2 trial results and is looking to partner with larger companies to further develop these therapies. They already have a deal with Merck to create new CPMs, and one with GSK for a component for a malaria vaccine. Watch this company.

Altera (ALTR) had a good quarter with revenue up 17% from year earlier. I believe that FPGAs (Field Programmable Gate Arrays) will continue to outgrow the overall semiconductor market, but put my money on rival Xilinx. Should have bet on Altera first; my intention was to buy both, and I still probably will.

The most interesting reports coming up this week (links are to pages where you can review past analyst conferences, if you like, and also linked to placeholder pages you can bookmark to get my summaries after the conferences take place):

Vertex Pharmaceuticals (VRTX), as follows know, is my least favorite Nasdaq 100 biotechnology stock to invest in, not because they aren't doing wonders in their therapeutic field, but because the stock price builds in way to much success compared to other companies. But maybe Vertex will return to profitability some time this year.

Amgen (AMGN) is well-established biotechnology company. I'll be watching revenue and earnings, as well as pipeline development. At some point Amgen may run into generic "biosimilar" competition for some of its therapies. There will probably be some analyst questions about that, and I would like to here the answers.

Akamai (AKAM) accelerates the Internet. Again, a great company, but I would need a lower price point to convince me to buy back in.

Microchip (MCHP) is a semiconductor stock with a reliable dividend and continuing growth potential. It is a core of my portfolio, but I would not call it cheap at today's price.

I own CELG, AGEN, AMGN and MCHP, and reserve the right to sell them or buy more of any of them at any time.

I do not own ALXN, ALTR, AKAM, or VRTX, but reserve the right to buy them at any time, which would be highly dependent on pricing.

I am an investor, researcher and financial writer. The above express my opinion, and does not constitute financial advise.

AMD, what to look for

Another post published at Seeking Alpha:

3 More Reasons to Stay Long AMD

This would not be the best article for someone who knows nothing about Advanced Micro Devices. But so much has been written about AMD. There have been rumors of an inventory issue (too much of it) with high-end GPU cards. That is supposed to be the result of the end of the Bitcoin mania. So now gamers can actually buy high-end AMD GPU cards at reasonable prices. If there is some excess inventory, it will work out of the system quickly. The only real problem would be if people just plain stop buying high-end graphics cards, which does not seem likely.

There is the PC unit decline (or not) issue, and the ancient market share, AMD vs. Intel issue.

And we are all waiting to see if there will really be a AMD chip in some new mass market device beyond PCs and gaming consoles.

Which will all come out when AMD reports Q2 results on July 17. As usual, I will read and listen to the presentation and put up my notes (at AMD analyst conference summaries). But if you are thinking of investing in AMD, you should listen yourself (the link will be at AMD calendar). Why give the professionals an edge?

Good luck. Keep in mind I am always looking for the long-run value; I don't try to predict stock prices in the short run.

I own AMD stock; I am a business writer, not an investment advisor.

Agenus, Inovio, Dendreon, Dot Hill, Microchip, Hansen analyst conference notes

Top of the list, published at Seeking Alpha:

Agenus Platforms Provide Many Shots on Commercialization Goal

My notes on recent quarter results and analyst conferences:

Inovio

Dendreon

Dot Hill

Microchip

Hansen Medical

Regeneron

I had been working on the Agenus article for some time. I came up with a value of AGEN stock much higher than the current value, but I believe I was fair about it. If anything, I held back because I was a bit shocked at how valuable the company should be. If I were a billionaire I would buy the whole thing at the current market capitalization, if I could. Of course an attempt like that would send the price soaring.

I own some of all the above stocks except Regeneron. I really should pick up some REGN, despite the high P/E ratio, but my cash only goes so far.

I bought some more Mylan (MYL) stock on May 9, but now I have enough of it. Can't say what Mylan will do in the short run, but in the long run they look to do great.

Now that earnings season is slowing down, I hope to write more analysis, and I hope Seeking Alpha will continue to publish my longer pieces.

Adept Technology, TTM Technologies, and Regeneron Analyst Call Notes

I have posted my notes on the following quarter results and analyst conference calls:

Adept Technology (ADEP) Q4 2013 analyst call notes

TTM Technologies (TTMI) Q4 2013 analyst call notes

Regeneron (REGN) Q4 2013 analyst call notes

I own shares of TTMI. I do not own shares of REGN but may buy shares at any time.

I disposed of my remaining shares of ADEP yesterday. This is not a reflection of the company or its management. They have turned the company around and are set up to sell significantly more industrial robots as time passes. It is purely a valuation call: too high, too fast for me. I may buy ADEP shares again at any price point should I feel that is warranted.

Amgen analyst call report available

I am running a bit behind, but just finished:

Amgen (AMGN) analyst conference call report

My general impression was positive. Moving the needle at Amgen is a big deal, but they have a big pipeline, with a lot of data from Phase III trials coming out this year. That should mean revenue ramps in 2015. Lots of Phase II and Phase I trials underway as well.

For a long-term investor it looks like a no-brainer. However, I don't currently hold AMGN. It is one of several biotechnology stocks on my short list for my next investment round, some time after earnings season ends.

Cantel Medical (CMN) update

In retrospect, one of my luckiest stock picks has been Cantel Medical (CMN) a manufacturer of sterilization and infection control equipment.

Yesterday the stock hit a record high after the market digested its morning report on its fiscal Q4, and the analyst conference. Hansen is still a small cap, so it is not well-covered by Wall Street, sell-side analysts. I've been covering it since before I bought it in 2009.

My Seeking Alpha article on it is:

Cantel Medical: Proven Aggressive Growth and Stock Returns [September 27, 2013]

My summary of Q4 is: Cantel Medical (CMN) Q4 2013 results and analyst call

For earlier analyst conference summaries and stories see Cantel Medical (CMN) Analysis and News

I own stock in CMN. Because it grew so quickly, at one point it violated one of my portfolio rules (not too much of any one stock) and I sold a portion of my original stake. I has split twice since I bought it. It pays a small dividend.

For those who wonder about how Seeking Alpha works, I would share that contributors get paid per page view. Hence, if you are writing mainly for pay, you want to cover large cap stocks that have a lot of shareholders, and especially stocks that are constantly in the news, like Apple and Facebook. There is basically no pay for covering small caps like Cantel. I made $3.60 on my last Cantel article. Hence, small cap stocks tend to be under-covered at Seeking Alpha, just as they are elsewhere. Another issue is pump and dump. Because they are thinly traded, small caps are subject to attempts to pump and dump them.

Seeking Alpha articles also can warn you about overpriced stocks. Often in the feedback you can read a contrarian view, which at least should discourage hasty decision making.

But for that very reason, small-cap stocks also are more likely to harbor undiscovered value than large-caps.

I am a long-term investor and write for long-term investors. I think  the vast majority of writers on Seeking Alpha are honest, but even honest writers (including me) can get over-excited about a stock. Never buy a stock without first, at minimum, reading the recent SEC documents and running the numbers yourself. That is true of large cap stocks as well. Look for value. Don't try to be a momentum player unless you are an insider. Never fully trust anyone. And above all:

Keep diversified!

TTM Technologies (TTM) Q2 analyst call notes

I've posted notes on the TTM Technologies (TTMI) Q2 2013 analyst conference

I own TTMI stock, but have not been recommending it for a while. It has been digesting an acquisition, giving it a presence in the Asian printed circuit board (PCB) market, in addition to its North American operations.

Things seem to be going pretty well. Debt is being paid down even as investments are being made in advanced PCB technologies. Demand is picking up, and profit margins are improving. I would peg $16 as a reasonable stock price.

I'll write a longer analysis for Seeking Alpha, but I have quite a backlog at this point.

Keep diversified!

Celgene analyst conference call notes

I have posted my notes on today's Celgene (CELG) analyst conference call:

Celgene (CELG) Q2 analyst call

The key takeaway was updated 2013 guidance.

I'll also be taking notes on Biogen Idec and Gilead today. I have a Xilinx article in the Seeking Alpha queue that needs some links to be added. I will probably write about Celgene next, then Akamai, Biogen, Gilead, and Intel and Altera updates, if I have time.

Red Hat (RHT) Q1 2013 results and conference notes

Despite being on vacation, I took notes on the Red Hat conference:

RHT (Red Hat) analyst conference notes, Q1 2013

Adobe Fiscal Q2 2013 Analyst Conference Notes

My notes on the latest Adobe (ADBE) results and conference can be found here:

Adobe Fiscal Q2 2013 Analyst Conference Notes

It is still hard to tell at this point how the shift to selling Adobe prodocts as subscriptions rather than in iterations (CS6 following CS5, etc.) by download or disks will work out. Revenues are not climbing, and profits are down, but this was expected even if the shift to subscriptions is successful. Management sounds confident, and seem to be executing to plan. No money down, pay later plans are the American dream, so it will likely work out but for investors it is a waiting game.

Cantel Medical Analyst Call (CMN)

I have posted my notes on today's Cantel Medical (CMN) analyst conference call here:

Cantel Medical fiscal third quarter 2013

Cantel had a good, but not spectacular, quarter.

I own stock in CMN. I have watched them expand revenue in the healthcare infection-prevention market for several years now. I see no reason Cantel should not continue to do well these next few years and see a gradual but significant rise in the stock price.

I hope to post a longer analysis at Seeking Alpha sometime today or tormorrow.

Marvell Technology (MRVL) Q1 results & conference notes

Marvell Technology Group (MRVL) reported results on Thursday, May 23 that were at the high end of prior guidance. You can see my notes on the analyst conference at Marvell analyst conference, fiscal Q1 2014.

The most significant point is that new products that have been a couple of years in development should start ramping revenues in the second half. While no specific guidance was given for Q3 or Q4, the guidance for Q2 was revenue between $770 million and $800 million, which would be a significant sequential increase.

I own stock in Marvell.

Dendreon Restructuring Call

Mitchell H. Gold, MD, Dendreon's CEO, led a analyst conference call to discuss restructuring plans. This follows the month-earlier announcement that Provenge sales were ramping slower than expected.

About 500 employees are being laid off, out of about 2000. Restructuring costs are estimated at $21 million, including $5 million in non-cash stock-based compensation.. Savings from restructuring are estimated at $120 million per year. Most of these employees were in training to be ready to meet the (previously expected) demand ramp. Presumably if demand accelerated again they would have to be rehired, and the savings would not accrue.

For most mid to long term investors the key question is long term demand. Revenues for August were reported at $22 million, up 16% from July, which would put July around $19 million. Given a similar $3 million ramp in September, Q3 income would be $66 million, but management stood by its refusal to guide on revenue other than to say that it expects it to ramp slowly quarter by quarter in the immediate future. $66 million is up 32% sequentially from $50 million in Q2, which would be tremendous had expectations not been raised so high earlier in the year.

Approval of Provenge in Europe was painted as a 2013 event, so no revenue help there is likely until 2014.

Analysts' questions went every which way at management's statement that $500 million in annual revenues, or $125 million per quarter, would get Dendreon to cash-flow break even (but not to GAAP profits). They also believe they have enough cash to reach that point. They had $674 million in cash at the end of next quarter, and $600 million on August 31. Cash use should decline now that the 3 Provenge facilities have been certified by the FDA.

Aside from restructuring, the major effort is in sales. The good news is that the reported time for reimbursement for Provenge has dropped to around 30 days, from prior reports of 60 days or more. That means medical organizations with cash flow issues could treat twice as many patients with the same amount of capital. Also, a concerted effort to make sure prescribers understand the Provenge label and reimbursement availability has been made and is ongoing. We will see if this all has an affect if management keeps reporting revenues on a monthly basis.

Management still believes that the $90,000 per patient price is not an obstacle, and that other prostate cancer drugs will not prevent Provenge from being prescribed within its label, since it is very safe, with almost no side effects, and the course of therapy is much quicker than for most cancer drugs.

There seems to be little fodder for short term momentum plays up or down right now. A lot of risk has been incorporated into the current stock price. A slow revenue ramp with flattening in 2012 would probably keep the price in a range. A faster ramp and better evidence that end demand really can ramp well above $500 million per year would justify a higher stock price, maybe substantially higher, but that could take several quarters to see.

Disclaimer: I have been long Dendreon since 2005, but buy and sell according to my analysis of prospects versus the market capitalization. I added Dendreon shares in August 2011 and last sold shares in April of 2010. I have no plans to buy or sell Dendreon in the near term.

See also: Dendreon Press Releases

Dendreon, Hansen Medical, Onyx Conference Calls

Yesterday I posted summaries for three analyst conferences reporting Q2 results. The most dramatic result was the swoon in Dendreon's stock price. It is a busy day, so all I can do right now is provide links to my summaries:

Dendreon (DNDN) Q2 2011 analyst conference call summary

Onyx Pharmaceutical (ONXX) Q2 2011 analyst conference call summary

Hansen Medical (HNSN) Q2 2011 analyst conference call summary

Akamai in Value Range Again

Akamai (AKAM), the internet content acceleration company, has been showing downward momentum since a peak at . It plunged after its Q2 earnings announcement on Wednesay. So why did I add to my Akamai position today?

Akamai has always been a good company. Its stock price, however, has been subjected to fits of mania and depression practically since its IPO in 1999, during the peak of the Bubble. When the recession hit in 2008 all the air went out and I was able to buy Akamai at bargain basement rates [$17.56/share]. Then the excitement returned, pushing Akamai up to valuations that just did not make sense considering where most other technology stock prices were. It was at $54 per share in December of 2010. I had sold part of my stake [at $44.80, nowhere near perfect, but not bad] by then. You might argue that I should have sold it all, but I tend to be as cautious selling stocks as I am buying them.

What is going on? Akamai has been growing revenues and profits. The question is, how fast can we expect growth to be in the future. Wednesday management said that Internet traffic this spring did not grow as fast as they expected, so they don't want to project as much growth for the rest of 2011 as they had in the past. [See my notes on the Akamai Q2 conference call for numbers and details]

I think the downward momentum has gone too far. That does not mean the stock price can't go lower, but it means I believe buying the stock at today's price is a good long-term investment. It might even be a good short term investment.

There are good, growing, well-managed technology stocks out there that have cheaper valuations (by P/E, etc.) than Akamai, but then I own several of them too. Akamai brings diversification to my portfolio. I believe I understand what Akamai does, how it makes it money, and what the competition is [See my extensive Akamai writings].

Internet traffic will continue to grow, and it will continue to become more complicated. Companies that depend on the internet need help with content delivery acceleration, with serving the fractured mobile device market, and with security. Akamai has managed to stay ahead of the competition for over a decade now. A slow quarter for internet traffic growth does not signal the end of Akamai. To me it signals a buying opportunity.

Do your research, think for yourself, and keep diversified!

See also Akamai Investor page

Adobe (ADBE) Analyst Conference Call Summary Available

I have posted my summary of the Adobe Q2 fiscal 2011 analyst conference call.

Lots of interesting stuff happening at Adobe, reflecting the rapid evolution of Internet and cellular delivery of information. HTML 5 is a space to watch.

Applied Materials Rocks Q2

Applied Materials, the semiconductor capital equipment maker, reported stronger than expected revenues and earnings for its second quarter of fiscal 2011 ending May1. The stock traded down on Friday based on management's cautious guidance for the remainder of 2011.

Prior guidance had been for Q2 sequentially flat to up 5% from Q1 revenues of $2.69 billion, with non-GAAP EPS of $0.34 to $0.38. Instead revenues came in at $2.86 billion, up 7% sequentially from $2.69 billion, and up 25% from $2.30 billion in the year-earlier quarter. Non-GAAP EPS was at the high end of guidance, $0.38.

Prior guidance on full fiscal 2011 revenues was over $11 billion and non-GAAP EPS was over $1.50. Management now said that is the high end of a range that depends on demand in Q3 and Q4.

The dividend is now 8 cents per quarter, 32 cents per year. There is a lot of room for growth given EPS, but acquiring Varian Semiconductor will eat up much of Applied's $4.6 billion cash and investment balance. Once Varian is digested the dividend could start growing again. At Friday's closing stock price the current dividend is a healthy 2.35%.

Within the semiconductor equipment and servicing industry Applied Materials serves a variety of segments. Variations in the demand cycles in segments and sub-segments account both for the stellar quarter and for the cautious guidance. The solar power division set a record, but revenues exceeded new orders as there are questions about end demand in Europe. Orders exceeded sales in the largest segment, silicon semiconductor manufacturing equipment, but the orders are mostly in new process modes (40 nm and under), driven by mobile end market demand. Large panel display capacity is plentiful, so most orders are to make small panels for smartphones and tablets.

My own view is that there is mainly upside. The Varian Semiconductor acquisition will make Applied very close to a full service provider for foundries. Despite uneveness, we are still in a global economic ramp with billions of consumers set to acquire smartphones in the next 3 years (600 million in China alone). Everyone wants devices that do more with less power, and the only way to get that is with new semiconductor manufacturing capabilities. It does not matter who wins the smartphone race; everyone needs the kind of semiconductor solutions Applied Materials provides.

For more details about Q2 results, including questions by analysts, see my Applied Materials Q2 2011 Analyst Call summary.

I own Applied Materials (AMAT) stock. See also the Applied Materials web site.

See also: http://www.appliedmaterials.com/