Tuesday, July 30, 2013

'No mas' stock suggestions, but our macro thoughts will continue ...

No more opinions on individual stocks

We will continue to post our thoughts from a macro standpoint.  However, we can no longer provide 'suggestions' regarding individual stocks, for a variety of reasons.  With FB skyrocketing the last few trading days, our batting average went from a nice 0.750 to a much less respectable 0.500. 

We cannot and will not provide our opinion regarding those names.  We do note that two of those companies reported Q2 numbers and both beat the Street's top and bottom-line estimates.  FB reported last week; and IACI posted its numbers on Tuesday afternoon.  BCOR is scheduled to report Q2 results on Thursday after the close. 

As usual, we are not aware if or when AVID will report or file its financial reports.  However, based on an 8-K filed by AVID on July 19, a few things have taken place: 

  • Karl Johnsen will no longer be AVID's VP of Finance, Chief Accounting Officer and Controller.  John Frederick, AVID's CFO, will take over as AVID's interim Principal Accounting Officer.
  • AVID also adopted the "Remediation Bonus Plan" which it hopes creates additional incentive for its employees to stay onboard as the Company tries to address its revenue recognition and quarterly and annual statement filing issues.
  • AVID also stated that as of the end of Jun '13, it has $56.1MM in cash and cash equivalents.  This is only slightly below the Jun '12 balance of $59.4MM, but much lower than $71.4MM in Sept. '12.  Then again, with revenue recognition being disputed, the Company's AR balance of previous years and quarters will likely be changed, impacting cash balances reported in those quarters and years.  As a reminder, the Company has stated that the timing of revenue recognition is in dispute, not the amount. 

ISM manufacturing and NFP estimates

In terms of macro indicators, first Q2 GDP growth estimate, ADP employment, initial jobless claims, ISM manufacturing, BLS' July employment report (which includes net change in NFP), and the personal income and outlays report for June will be released this week.

As usual, we have estimates for ISM manufacturing and July NFP.  We think July ISM manufacturing index will come in at 52.2, higher than June's 50.9, but below the 53.1 consensus.  For net change in July NFP, we estimate 110K; lower than the Street's 175K. 

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