Posts for Ticker ‘ICGE’

Many Major Tech, Media, Telecom Hitting New 52-Week Lows

With about 20 minutes to go into the close and on one ugly day, we have the DJIA down nearly 300 points, the NASDAQ down almost 40 points, and even the S&P 500 down over 35 points.  We have been commenting about the recession for some time now and this is going from the good to the bad to the fugly.  Of course financials, REIT’s, retail, and other classic sectors had more than their fair share of 52-week lows.  But Telecom, Media, and Tech reached these critical 52-week lows and these are looking horrible. 

The markets are hostage to the ratings agencies now.  Here is what happens when you look at "VALUE INVESTING" in technology:

Alliance Data (ADS), Answers (ANSW), ATMI Inc. (ATMI), BigBand Networks (BBND), British Sky ADR’s (BSY), CA inc. (CA), CBS Corp. (CBS), Century Tel (CTL), Cincinatti Bell (CBB)…

Cisco Systems (CSCO) is a new entrant, this was surprising but those teen prices were in 2006.

Cogent (COGT), Cohu Inc. (COHU), Computer Science (CSC), Compuware (CPWR), DireTV (DTV),
Echostar (DISH).. unsure because of reorg…, Emulex (ELX), Epicor Software (EPIC), General Electric (GE), Getty Images (GYI), Gluu Mobile (GLUU), Hungarian Telecom (HTC), Internet Capital Group (ICGE), Interactive Intelligence (ININ), J2 Global (JCOM), ML Internet HOLDRs (HHH), ML Telecom HOLDRs (TTH), PlanetOut (LGBT), Liberty Media (LINTA), Loral Space (LORL), Live Nation (LYV), Sourcefire (FIRE), Flextronics (FLEX), Monster Worldwide (MNST)….

Motorola (MOT), Martha Stewart (MSO), Mattson Tech (MTSN), Network Appliance (NTAP), Orbitz Worldwide (OWW), Plantronics (PLT), Powershares Dynamic Media (PBS), Qwest Communications (Q), RCN Corp. (RCNI), RF Micro Devices (RFMD), Riverbed Tech (RVBD), Savvis (SVVS), Sprint Nextel (S), SiRF Tech (SIRF), Stamps.com (STMP), Time Warner (TWX), Trimble Navigation (TRMB), Veeco Inst. (VECO), Vishay (VSH), Voltera Semiconductor (VLTR), Xinhua Finance Media (XFML) ,

Yahoo! (YHOO) ouch.

This is almost enough to make many people cry.  The VIX is trading at 27.34 and is up 2.96 points but we aren’t even at 30 yet meaning that massive critical oversold and true panic levels haven’t yet been reached.

Jon C. Ogg
January 17, 2008

Posted on: January 17, 2008 – 3:51 pm in HI/LOW, Media, Technology Companies, Telecom, , , , , , , , , , , , , , , , , , ,

Safeguard Scientifics CEO Interview: “Small Cap Value Stock” (SFE, CLRT, CMGI, ICGE)

Stock Tickers: SFE, CLRT, CMGI, ICGE

Late last week, 24/7 Wall St. got the chance to interview Peter J. Boni, President & CEO of Safeguard Scientifics, Inc. (SFE-NYSE).  Mr. Boni has been President & CEO of the company for roughly 22 months, and it may be worth noting that at the end of August 2005 the shares of Safeguard have risen from $1.62 at the end of that time to its current price of $2.68.  I did get a chance to discuss many issues with the company, and the first and foremost issue is worth noting:

Part of our interest in interviewing Safeguard was because of the recent interest in CMGI Inc. (CMGI-NASDAQ) and other incubators.  QUESTION: So without taking away from your own company in a comparison, what is the difference and do you have plans to transform into more of an operating company that also has an incubator?  If not, is this something you would consider?

For starters, we did not spend too much time discussing the merits of other incubators and other holding company investment vehicles.  But Mr. Boni did want to be clear about the incubator term being very much in the past when the investment climate was in the tech bubble days; and now they are operating solely as a holding company with gains on investments being the primary goal for each investment.  Safeguard has a 50-year history and has been a public company for close to 20 years.  The focus is entirely on investment opportunities in information technology and in life sciences.  Without being able to predict returns, the “Goals” were fairly clear: look for opportunities that are in the 3X to 5X returns that come from a liquidity event, with a longer-term outlook, staying diversified, and by looking at opportunity stages that are between the first round stage and the private equity stage.  The company also has a managerial structure that compensates managers based on the company’s market capitalization of the company, and the long-term vision is to try to make the company a $1 Billion company in the coming years. 

Outside of the differences and similarities, we did have numerous questions for the operations and holdings.  Some questions of course could not be answered because they would be too ‘prediction-oriented,’ but you will see in the comments later that many of the areas were covered.

ADDITIONAL QUESTIONS: What sort of investment activities are you currently focusing on, and does the company have any plans to raise cash or leverage the balance sheet any more?  What is the current value carried on the books of the cash and the public company shares you own? How much more value do you ‘guestimate’ as the private companies?  Would the company consider any special or one-time dividends or other shareholder friendly initiatives? What do you think the company can do to garner more research following from traditional boutique brokerage firms?  What do you identify as your largest opportunities and what are your longer-term goals?

The company previously had 40 portfolio companies that it scaled downto 10, and currently has 16 portfolio companies with shares ofClarient, Inc. (CLRT-NASDAQ) being the one current public holding.  Theother 15 investment holdings are mixed between InformationTechnology and in Life Sciences, although there is quite a bit ofconvergence between the two areas.  Four of these are majority held andtwelve of these are minority investments. In these arenas Safeguardreally tries to limit extra risks where the applications and goals arenot really known.

CONTINUE ON PAGE 2…..

Read More »

Posted on: June 25, 2007 – 7:55 am in Biotech, Internet, Interview, , , ,

CMGI Profit Taking Is Logical, But The Story Is Still Alive (CMGI, ICGE, SFE)

CMGI Inc. (CMGI-NASDAQ) is down another 5% in trading today, yet it really is acting like it is just follow-on profit taking and more of a buyers-strike than it does anything overly ominous to the long-term focus of the company.

After a 66% run from the quarter before and going into earnings, it actually makes sense that the stock has pulled back.  The sharp drop immediately after the news seemed a bit harsh, but the after-event trading activity has confirmed the action.  It is always hard to sell someone who sees a drop in their shares that"this is good and orderly" because a drop is a drop, but that looks tobe the case.  What may have added fuel to the fire is that this marks the third consecutive day where the Dow Jones Industrial Average has seen triple digit declines.  We all know how strong the market has been right before that.

Forbes gave all the positive summary of its own, and you can go through our notes over conference call.  Now that company is continuing to press its ModusLink image and brand, things are slowly getting better even after two large customer losses over the last two quarters.  The hidden call option is the @Ventures IV investment fund dedicated to clean energy and renewable energy.  The company has made some interesting investments in the sector and these may have significantly higher values down the road if alternative energy continues to gather steam like it has.  Here was our full preview discussing what was expected ahead of earnings.

In the last two days, Internet Capital Group (ICGE) is down mostly today by 3.7% and Safeguard Scientifics (SFE) is down almost 6%.

Jon C. Ogg
June 7, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: June 7, 2007 – 1:40 pm in Alternative Energy, Internet, , ,

CMGI: Last Look Ahead of Earnings (June 5, 2007) (CMGI)

If you are an investor in CMGI Inc. (CMGI-NASDAQ), you know the earnings are this afternoon after the close and you know every small cap low stock price trader is going to be watching this one closely.

Here was our full earnings preview from last week and nothing much has changed, although there a couple more add-on pieces.  WR Hambrecht, the only street analyst with estimates has a $0.02 EPS target on revenues of $259.5 million. This quarter will still have much of the H-P business in it, but we only really know what the company is targeting for year-end: up to $1.10 Billion in revenues, 12% to 14% gross margin, 7% SG&A, and 5% to 7% operating margins.

Last week the company’s @Ventures unit made a $3 million investment into Powerit Holdings Inc. as the leader in a $7.1 million Series A financing.  Powerit Holding’s US subsidiary, Powerit Solutions, provides energy demand response and demand control solutions for industrial and commercial companies. These easy-to-integrate, proprietary solutions enable major cost savings on electricity bills with no impact to productivity or quality, as demonstrated with hundreds of installations of the technology to date.

There is also some ongoing talk of a reverse stock split, but honestly betting on splits in the modern world has become as much of a coin toss as the real impact to shareholders.  We’ll have an answer as to how the company did here momentarily.  With an hour to go to earnings, CMGI is up 1% at $2.52 on the day.  Inthe last trading week shares traded as low as $2.35 and as high as$2.60.

If this does very well and gets more street attention, then the two stocks to watch for copy cat strategies are Internet Capital Group (ICGE-NASDAQ) and Safeguard Scientifics (SFE-NYSE).  Neither company has been rekindled in the same manner or to the same degree as CMGI, and traders and companies alike look for opportunities that worked well for one company that could be applied to another.

Jon C. Ogg
June 5, 2007

Jon ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: June 5, 2007 – 2:20 pm in Alternative Energy, Earnings, Internet, Software, , ,

CMGI Earnings Preview For June 5, 2007 (CMGI, ICGE, SFE)

CMGI, Inc. (CMGI-NASDAQ) has an important few days ahead itself.  The company is reporting earnings next week (Tuesday June 5, 2007, after the close) and every single investor who has purchased shares any point since January 2005 prior to Wednesday’s close actually appears to be in the money.  If we go back to the bubble years there are painful memories and broken dreams, but since we started giving this one more focused attention back on February 22, 2005 shares up 66%.  Short sellers increased their bets against all of the incubators in May 2007 against CMGI, Internet Capital Group (ICGE-NASDAQ) and Safeguard Scientifics (SFE-NYSE).

The past is the past, and the future is up to the company.  The new and improved ‘operating company’ of CMGI is really a supply chain management outfit called ModusLink, plus it still has its @Ventures incubator arm.  @Ventures’ incubator investments are split between Internet and digital company stakes and alternative energy stakes, and lately it has been focusing on and funding more on the alternative energy sector.  Enough on that.

With the stock up 66% and with this one being up 66% since last earnings and with this re-developing one of the largest cult followings out there, how does one predict an earnings outcome on such a transformed company that is grossly under-followed by analysts?

Since its last earnings report, CMGI has either made or been the beneficiary of almost all good developments: it was given a ‘Buy’ rating by boutique WR Hambrecht (with a $2.50 target, where the stock is now, and out of a $2.47 to $2.97 range suggestion), was given a ‘Buy’ rating from TheStreet.com internal ratings, institutions actually bought shares, it named a new CFO, it has invested more into clean/alternative energy including ‘Earthanol,’ it acquired full ownership of its Japan-based joint venture, brought in a solid CFO from IDC, was named as one of the CNBC Challenge most widely picked stocks almost daily, named a new leader for its alternative and clean power investing, and named a new head of sales and marketing out of Lenovo.

What we know is that when it issued it last earnings CMGI came clean and disclosed that they were losing Hewlett-Packard (HPQ-NYSE) as a client that represented in the vicinity of $100 million annual revenue and $3 million in operating income.  This quarter will still have much of the H-P business in it, but we only really know what the company is targeting for year-end: up to $1.10 Billion in revenues, 12% to 14% gross margin, 7% SG&A, and 5% to 7% operating margins.  While the market was busy tanking after the first mini-tank in Shanghai, this one pulled back briefly after earnings and came roaring back when almost everything else was falling. 

So this quarter is really going to be a mixed bag and very difficult to hang your hat on any one metric.  The WR Hambrecht analyst, assuming nothing has changed, has a $0.02 EPS target on revenues of $259.5 million.  Investors should be strongly cautious on depending upon one or even a couple of targets as this can lead to what may be good hits and bad misses on the surface when in fact the company itself may be taking the exact opposite stance on the same bit of news.  The full-year guidance and "progress with our new team" communique is most likely where the cult following of investors will take its cue from.

It would be easy to predict that with a 66% gain since its last report that ‘profit taking’ would be the most likely excuse.  But it would also be foolish to make such a prediction in a cult stock with such a core small-cap trader following like CMGI.  Whatever the prediction is, it would be difficult to believe that shares just stay static after the earnings on Tuesday.  Based on this coming earnings in a corny analogy, some may think the @Ventures incubator took on one of two new sectors: rockets or parachutes.

If it looks like CMGI went into the rocket business if it beats earnings, then you can probably expect that much more attention will also finally be directed toward the other two key incubators Internet Capital Group (ICGE-NASDAQ) and Safeguard Scientifics (SFE-NYSE).  Neither company has been rekindled in the same manner or to the same degree as CMGI, and you could easily see either company go on a rapid mission that would make them look like a blank-check that found a target plus still retain an incubator group.  We’ll know after next Tuesday.

Jon C. Ogg
May 31, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: May 31, 2007 – 5:06 am in Alternative Energy, Earnings, Internet, Software, Technology Companies, , , ,

Short Sellers Line Up Against CMGI & Incubators (May 2007) (CMGI, ICGE, SFE)

Stock Tickers: CMGI, ICGE, SFE

The short sellers are lining up their bets against CMGI (CMGI-NASDAQ).  To add fuel to the fire, the shorts are also lining up bets against the other two ‘incubators’: Internet Capital Group (ICGE-NASDAQ) and Safeguard Scientifics (SFE-NYSE).  CMGI earnings are coming out soon, it will be interesting to see if these short bets are right or wrong.  CMGI shares are up almost 75% year to date and we don’t need to remind anyone of the internet bubble day prices in the stock.  The company has been transforming itself into ModusLink as its operating unit, and its @Ventures unit is still alive as an Internet incubator and has been increasing its investments in alternative energy.

Stock (Ticker)                  MAY         APRIL    Change    FLOAT%   
CMGI (CMGI)                 27.35M    22.48M    19.8%        5.9%
Internet Cap. (ICGE)    4.81M       4.64M       3.7%        13.7%
Safeguard Sci. (SFE)   6.62M       5.98M      10.69%     5.5%

Jon C. Ogg
May 25, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: May 25, 2007 – 8:31 am in Internet, Short Interest, , ,