June 5th, 2008
Written by Nilanjan Das
Of the S&P500 stocks, Gridstone covers 370 companies. We offer full coverage overlap in the Consumer Services and Nondurables (CSND), Consumer Durables, Technology, Telecom, Energy and Utilities sectors and majority overlap in Financial Services and Industrials sectors. We are not yet covering any stocks in the Materials and Health Care sectors. This note looks at the sectoral quarterly earnings trend since Sept-06 and YoY growth in diluted EPS since Sept-07 of the S&P500 companies in the Gridstone universe. read more…
May 12th, 2008
Written by Naveen Selvaraj
Rishabh Sinha co-authored the note.
Of the ~380 Tech companies that Gridstone Research covers, around 245 companies have announced their CY1Q08 earnings. We evaluated the earnings performance on two factors:
1. Beat-Miss ratio versus the Company’s guidance for revenue
2. YoY revenue growth achieved in CY1Q08 vs. CY4Q07
Exhibit I provides the Beat-Miss ratio across the three broad industry groups and the overall Tech sector. Software & Services(S&S) have expectedly outshone the other groups. read more…
April 2nd, 2008
Written by Shabbir Batterywala
Technology sector companies having exposure on auction-rate securities (ARS) are now faced with taking impairment charges on these investments. Though ARS were pitched as a higher yield alternative to cash, the once highly liquid investments have proved less so in recent months as there have been fewer bidders in the auctions that give the securities their liquidity. Low liquidity together with widening credit spreads have resulted in large mark-downs in the value of these securities.
We used Gridstone Research’s search feature to try and find out the possible list of companies that have exposure to ARS or how widespread are the investment in ARS by technology sector companies. The results show that majority of the companies in the technology sector have investments in ARS ranging from $5 - 200 M. Some of the prominent names in the list include PALM, PRGS, HRS, MCRS, CKFR, ADCT, TKLC, BBBB, and FCS. read more…
January 24th, 2008
Written by Nilanjan Das
Apple, while reporting a strong December quarter, disappointed the market with a weak March-08 guidance. Revenue guidance of $6.8 B for 2Q08 was lower than consensus estimate, and EPS guidance of ~$0.94 was 15% lower than the then estimate of $1.10. The Apple stock is now trading at a 14% low from its January 22 closing price.
We think that the season of disappointing guidance is not over. I pulled out the actual QE Dec-07 results and the management guidance & consensus numbers for the March-08 quarter from the Gridstone platform, for the companies who have reported on January 23. LSI, Symantec and eBAY are the big names where consensus EPS estimates for QE March-08 have been more aggressive than what the management now believe they can deliver during the next quarter. read more…
