Stock Market News & Stocks to Watch from StraightStocks » Navigant Consulting

Top Energy Equity Funds – Mutual Fund Commentary

Zacks Market Commentaries — Wed, 21 Oct 2009 06:03:19 +0000

Today we are featuring top-performing "Energy" equity mutual funds, which primarily invest in equity securities of energy and/or natural resources companies.

Investors can find such funds by checking out the entire list of the Zacks #1 Rank Energy Equity Funds.

3 Hot Picks

ICON Energy (ICENX) seeks long-term capital appreciation. It invests at least 80% of its net assets in equity securities of companies in the energy sector which are traded in the U.S.

The fund adopts a quantitative methodology to identify securities that are under priced relative to value. The U.S. equity securities in which the fund may invest include common and preferred stocks of companies of any market capitalization.

Unit holders need to make a minimum initial investment of $1,000 to enter this Zacks#1 Rank (“Strong Buy") fund. It distributes dividends and capital gains, if any, annually.

Derek Rolligson has been lead manager of the fund since May 2007. Rolligson was with Navigant Consulting from 1997 to 2000 as a research analyst in corporate litigation.

DWS Climate Change A (WRMAX) was incepted in September 2007. The investment seeks maximum return (growth of capital and income).

The fund is permitted, but not required, to invest up to 30% of assets in various types of derivatives, particularly futures. As of February 2009, its portfolio turnover was 126%.

Nicolas Huber has been lead manager of the fund since September 2007. Suntech Power Holdings (STP) and Itron Inc. (ITRI) are among the fund’s key holdings.

Munder Energy A (MPFAX) was incepted in March 2001. The fund invests in equity securities of U.S. and non-U.S. companies which significantly benefit from or derive revenue from non-regulated energy or power-related activities.

The fund invests in small, medium, and large capitalization companies. The fund may invest without limit in IPOs.

Brian Kozeliski has been lead manager at the fund since February 2009. Kozeliski is a Chartered Financial Analyst and has been with the firm since 2005.

Discover Many More Funds

Learn more about the new Zacks Mutual Fund Rank and discover some of the best market-beating mutual funds by browsing our mutual funds section. This part of Zacks.com offers a variety of tools, including mutual fund research, a new mutual fund screener, helpful answers to frequently asked questions and quick access to prospectuses and other information.

By applying the Zacks Rank to mutual funds, investors can find funds that not only outpaced the market in the past but are also expected to outperform going forward.

Zacks Investment Research

Zacks Industry Outlook Highlights: The Corporate Executive Board, Navigant Consulting and CRA International – Press Releases

Zacks Market Commentaries — Mon, 29 Jun 2009 14:35:33 +0000

For Immediate Release

Chicago, IL - June 29, 2009 - Zacks.com announces the latest Industry Outlook. Today's outlook from Zacks Equity Research analyst Sean P. Smith discusses the Business Consulting Services sector. Highlighted stocks include: The Corporate Executive Board (EXBD), Navigant Consulting (NCI), and CRA International (CRAI).

Here is the latest on the Business Consulting Services sector:

In light of the macroeconomic challenges facing existing and potential customers, we expect the business consulting firms to face a difficult operating environment in the near term. Our Sell-Rated stocks in the industry include The Corporate Executive Board (EXBD), Navigant Consulting (NCI), and CRA International (CRAI).

Each firm posted earnings results that fell short of Street expectations in 2008, and we anticipate further pressure on utilization rates in the case of NCI and CRAI, and on contract-value growth in the case of EXBD. As a result, we expect that margins will remain constrained in the current environment.

Indeed, CRAI recently reported that utilization rates fell again in the second quarter versus the year-ago period, despite headcount reductions and restructuring activities undertaken by the company. Likewise, EXBD reported that contract value and cross-sell ratio deteriorated further in the first quarter.

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5510.

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5511.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Contact:
Mark Vickery
Web Content Editor
312-265-9380
Visit: www.zacks.com

Zacks Investment Research

Business Consulting Services – Industry Outlook

Zacks Market Commentaries — Fri, 26 Jun 2009 22:44:58 +0000

Although the majority of attention regarding the current recession has focused on the consumer sector, business are being forced to cut back on expenditures as well. With businesses in nearly every industry looking for ways to lower non-critical expenses, we expect the business consulting industry to face a challenging operating environment in the near term.

OUTLOOK

We have a negative outlook for the business consulting services industry, based upon the difficult economic environment facing the companies' existing and potential customers.

Business consulting companies provide a wide range of services to their clients. Typical services include litigation support, business strategy planning, market and demand forecasting, policy analysis and consulting in the areas such as corporate finance, human resources, technology and restructuring.

With the economy currently in recession, companies in all industries are searching for ways to control expenses. Even in situations where a customer attributes significant value to the services provided by business consulting firms, these services may not be deemed critical in the short-run. As such, we expect that the operating environment faced by the business consulting firms will be challenging for the foreseeable future.

There are several ways in which we expect the current recession to negatively impact the business consulting industry.

First, existing clients may either delay decisions on whether or not to retain a consultant firm until economic visibility improves, or add fewer services than they would in periods of economic growth. With demand down, utilization rates (the amount of time billed in relation to amount of time worked) would likely continue to fall, and operating margins would contract. This scenario would lead to the most significant short-term impact on the consulting firms.

Second, existing clients that delay services may find that they can get by without the support provided by consulting firms. This scenario could potentially have a longer-term impact on the business consulting firms. Just as it is more difficult for retail companies to raise product prices after they have been lowered, so too would it become more challenging to convince customers to increase their expenditures on consulting services after a period of going without.

Third, customer growth could slow significantly, as potential new customers would be significantly less likely to add consulting services when budgets are tight. This scenario is the most significant, in our opinion, as it has the potential to cause the greatest long-term negative impact on the business consulting industry.

The amount of revenue growth that can be generated by existing customers is naturally limited. In order to significantly grow revenues, the consulting firms must continually add to their roster of clients. While the consulting firms may offer some price discounting in an attempt to win new business, this too would put pressure on margins and profitability.

In the current economic environment, we anticipate that some combination of all three scenarios detailed above will impact the business consulting industry in various degrees.

OPPORTUNITIES

We currently have no Buy-rated stocks in the business consulting services industry.

Companies that we would expect to be best positioned through the recession are those that provide tangible outsourced services that customers simply cannot avoid. Going forward, we will pay close attention to the utilization rates and operating margins posted by companies in the industry, as an indicator as to which firms will be best positioned upon an improvement in economic conditions.

WEAKNESSES

In light of the macroeconomic challenges facing existing and potential customers, we expect the business consulting firms to face a difficult operating environment in the near term. Our Sell-Rated stocks in the industry include The Corporate Executive Board (EXBD), Navigant Consulting (NCI) and CRA International (CRAI).

Each firm posted earnings results that fell short of Street expectations in 2008,
and we anticipate further pressure on utilization rates in the case of NCI and CRAI, and on contract-value growth in the case of EXBD. As a result, we expect that margins will remain constrained in the current environment.

Indeed, CRAI recently reported that utilization rates fell again in the second quarter versus the year-ago period, despite headcount reductions and restructuring activities undertaken by the company. Likewise, EXBD reported that contract value and cross-sell ratio deteriorated further in the first quarter.

We anticipate that these types of challenges will persist for the industry going
forward. Zacks Investment Research

CRA Int’l Selling Opportunity – Analyst Blog

Zacks Market Commentaries — Tue, 09 Jun 2009 18:09:10 +0000

Following Earnings, Sell CRAI

We reiterate our Sell rating on shares of CRA International (CRAI) following the release of second-quarter results. Earnings per share in the quarter slightly exceeded the consensus estimate. However, we note that estimates were slashed following the company's release of disappointing first-quarter results.

In fact, the company has seemingly fallen into a repeated pattern of delivering disappointing earnings one quarter, then beating the lowered consensus earnings estimate the following quarter, before again reporting disappointing results. This trend has now repeated consistently since the first quarter of 2008.

Given this repeated disappointment, we anticipate that investors will demand evidence that management has properly addressed the company's operational problems before affording a higher multiple to CRAI shares.

We continue to have a negative outlook on the business consulting sector, and maintain Sell ratings on CRAI, Navigant Consulting (NCI), The Corporate Executive Board (EXBD) and First Advantage Corporation (FADV). With the economy currently in recession, companies in all industries are searching for ways to control expenses. Even in situations where a customer attributes significant value to the services provided by business consulting firms, these services may not be deemed critical in the short-run.

As such, we expect that the operating environment faced by the business consulting firms will be challenging for the foreseeable future. In the case of CRAI, utilization rates remain depressed despite restructuring efforts, and management has stated although its pipeline remains solid, the conversion to actual billings has been slow.

The shares of CRAI are currently trading at a premium to the peer group average on a price/earnings basis. Given the state of the company's operations, we consider this premium to be unwarranted, and would use today's strength in the shares as a selling opportunity.
Read the full analyst report on "CRAI"
Read the full analyst report on "NCI"
Read the full analyst report on "EXBD"
Read the full analyst report on "FADV"
Zacks Investment Research

Xilinx, Navigant Consulting, Wells Fargo, Morgan Stanley and Citigroup – Press Releases

Zacks Market Commentaries — Mon, 11 May 2009 12:31:17 +0000

For Immediate Release

Chicago, IL - May 11, 2009 - Zacks Equity Research highlights Xilinx (XLNX) as the Bull of the Day and Navigant Consulting (NCI) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Wells Fargo (WFC), Morgan Stanley (MS) and Citigroup (C).

Full analysis of all these stocks is available at http://at.zacks.com/?id=2676.

Here is a synopsis of all five stocks:

Bull of the Day:

Xilinx (XLNX) reported revenues of $395.0 million in Q4:09, down 17% y/y and down 14% q/q. Sales from all geographies and end markets declined as expected. GAAP EPS came in at $0.26 while the non-GAAP EPS came in at $0.20.

For full fiscal 2009, sales of $1.83 billion were down 1% from 2008. Sales from Asia- Pacific increased 15% year over year driven by strong sales to communications customers. Sales from all other geographies were flat or down in fiscal 2009. GAAP EPS came in at $1.36.

Going forward, visibility remains poor and hence management is providing a wide revenue range. Revenues are expected to be up 4% or down 4% sequentially. Sales from Asia Pacific and Japan are expected to be up while sales from Europe and America are expected to decline. Tax rate is projected to be approximately 21%, while the share count on a fully diluted basis should be 275 million. We continue to rate Xilinx a Buy with a target price of $22.

Bear of the Day:

Shares of Navigant Consulting (NCI) are trading at 17.2x and 16.1x our 2009 and 2010 EPS estimates, respectively, and at a 9% premium to the 2009 peer group average.

The company's 2008 acquisition of Chicago Partners has offset revenue and operating income declines in its existing business segments.

Until we see further evidence that NCI can improve utilization rates and operating results in its largest operating segments, we believe that a premium valuation, relative to the peer group average, is unwarranted. Our price target reflects of multiple of 13x our 2009 EPS estimate.

Corp. Executive Board, Navigant Consulting and CRA International – Press Releases

Zacks Market Commentaries — Thu, 07 May 2009 12:30:06 +0000

For Immediate Release

Chicago, IL - May 7, 2009 - Zacks.com announces the latest Industry Outlook. Today's outlook from Zacks Equity Research analyst Sean P. Smith discusses the Business Consulting sector. Highlighted stocks include: The Corporate Executive Board (EXBD), Navigant Consulting (NCI) and CRA International (CRAI).

Here is the latest on the Business Consulting sector:

In light of the macroeconomic challenges facing existing and potential customers, we expect the business consulting firms to face a difficult operating environment in the near term. Our Sell-Rated stocks in the industry include The Corporate Executive Board (EXBD), Navigant Consulting (NCI) and CRA International (CRAI).

Indeed, CRAI recently reported that utilization rates fell again in the first quarter, despite headcount reductions and restructuring activities undertaken by the company. Likewise, EXBD reported that contract value and cross-sell ratio deteriorated further in the first quarter.

We anticipate that these types of challenges will persist for the industry well into 2009.

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=2678

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=2679.

About Zacks

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Contact:Mark VickeryWeb Content Editor312-265-9380Visit: www.zacks.com

Zacks Investment Research

Business Consulting – Zacks Analyst Interviews

Zacks Market Commentaries — Thu, 07 May 2009 05:00:00 +0000

OUTLOOK

We have a negative outlook for the business consulting services industry, based upon the difficult economic environment facing the companies' existing and potential customers.

Business consulting companies provide a wide range of services to their clients. Typical services include litigation support, business strategy planning, market and demand forecasting, policy analysis and consulting in the areas such as corporate finance, human resources, technology and restructuring.

With the economy currently in recession, companies in all industries are searching for ways to control expenses. Even in situations where a customer attributes significant value to the services provided by business consulting firms, these services may not be deemed critical in the short-run. As such, we expect that the operating environment faced by the business consulting firms will be challenging for the foreseeable future.

There are several ways in which we expect the current recession to negatively impact the business consulting industry.

First, existing clients may either delay decisions on whether or not to retain a consultant firm until economic visibility improves, or add fewer services than they would in periods of economic growth. With demand down, utilization rates (the amount of time billed in relation to amount of time worked) would likely continue to fall, and operating margins would contract. This scenario would lead to the most significant short-term impact on the consulting firms.

Second, existing clients that delay services may find that they can get by without the support provided by consulting firms. This scenario could potentially have a longer-term impact on the business consulting firms. Just as it is more difficult for retail companies to raise product prices after they have been lowered, so too would it become more challenging to convince customers to increase their expenditures on consulting services after a period of going without.

The amount of revenue growth that can be generated by existing customers is naturally limited. In order to significantly grow revenues, the consulting firms must continually add to their roster of clients. While the consulting firms may offer some price discounting in an attempt to win new business, this too would put pressure on margins and profitability.

In the current economic environment, we anticipate that some combination of all three scenarios detailed above will impact the business consulting industry in various degrees.

OPPORTUNITIES

We currently have no Buy-rated stocks in the business consulting services industry.

Companies that we would expect to be best positioned through the recession are those that provide tangible outsourced services that customers simply cannot avoid. Going forward, we will pay close attention to the utilization rates and operating margins posted by companies in the industry, as an indicator as to which firms will be best positioned upon an improvement in economic conditions.

WEAKNESSES

In light of the macroeconomic challenges facing existing and potential customers, we expect the business consulting firms to face a difficult operating environment in the near term. Our Sell-Rated stocks in the industry include The Corporate Executive Board (EXBD), Navigant Consulting (NCI) and CRA International (CRAI).

We anticipate that these types of challenges will persist for the industry well into 2009. Zacks Investment Research

Business Consulting – Industry Outlook

Zacks Market Commentaries — Thu, 07 May 2009 05:00:00 +0000

OUTLOOK

We have a negative outlook for the business consulting services industry, based upon the difficult economic environment facing the companies' existing and potential customers.

There are several ways in which we expect the current recession to negatively impact the business consulting industry.

In the current economic environment, we anticipate that some combination of all three scenarios detailed above will impact the business consulting industry in various degrees.

OPPORTUNITIES

We currently have no Buy-rated stocks in the business consulting services industry.

WEAKNESSES

In light of the macroeconomic challenges facing existing and potential customers, we expect the business consulting firms to face a difficult operating environment in the near term. Our Sell-Rated stocks in the industry include The Corporate Executive Board (EXBD), Navigant Consulting (NCI) and CRA International (CRAI).

We anticipate that these types of challenges will persist for the industry well into 2009. Zacks Investment Research

Business Consulting – Industry Outlook

Zacks Market Commentaries — Wed, 06 May 2009 17:20:36 +0000

Although the majority of attention regarding the current recession has focused on the consumer sector, business are being forced to cut back on expenditures as well. With businesses in nearly every industry looking for ways to lower non-critical expenses, we expect the business consulting industry to face a challenging operating environment in the near term.

OUTLOOK

We have a negative outlook for the business consulting services industry, based upon the difficult economic environment facing the companies' existing and potential customers.

Business consulting companies provide a wide range of services to their clients. Typical services include litigation support, business strategy planning, market and demand forecasting, policy analysis and consulting in the areas such as corporate finance, human resources, technology and restructuring.

With the economy currently in recession, companies in all industries are searching for ways to control expenses. Even in situations where a customer attributes significant value to the services provided by business consulting firms, these services may not be deemed critical in the short-run. As such, we expect that the operating environment faced by the business consulting firms will be challenging for the foreseeable future.

There are several ways in which we expect the current recession to negatively impact the business consulting industry.

First, existing clients may either delay decisions on whether or not to retain a consultant firm until economic visibility improves, or add fewer services than they would in periods of economic growth. With demand down, utilization rates (the amount of time billed in relation to amount of time worked) would likely continue to fall, and operating margins would contract. This scenario would lead to the most significant short-term impact on the consulting firms.

Second, existing clients that delay services may find that they can get by without the support provided by consulting firms. This scenario could potentially have a longer-term impact on the business consulting firms. Just as it is more difficult for retail companies to raise product prices after they have been lowered, so too would it become more challenging to convince customers to increase their expenditures on consulting services after a period of going without.

Third, customer growth could slow significantly, as potential new customers would be significantly less likely to add consulting services when budgets are tight. This scenario is the most significant, in our opinion, as it has the potential to cause the greatest long-term negative impact on the business consulting industry.

The amount of revenue growth that can be generated by existing customers is naturally limited. In order to significantly grow revenues, the consulting firms must continually add to their roster of clients. While the consulting firms may offer some price discounting in an attempt to win new business, this too would put pressure on margins and profitability.

In the current economic environment, we anticipate that some combination of all three scenarios detailed above will impact the business consulting industry in various degrees.

OPPORTUNITIES

We currently have no Buy-rated stocks in the business consulting services industry.

Companies that we would expect to be best positioned through the recession are those that provide tangible outsourced services that customers simply cannot avoid. Going forward, we will pay close attention to the utilization rates and operating margins posted by companies in the industry, as an indicator as to which firms will be best positioned upon an improvement in economic conditions.

WEAKNESSES

In light of the macroeconomic challenges facing existing and potential customers, we expect the business consulting firms to face a difficult operating environment in the near term. Our Sell-Rated stocks in the industry include The Corporate Executive Board (EXBD), Navigant Consulting (NCI) and CRA International (CRAI().

Each firm posted earnings results that fell short of Street expectations in 2008, and we anticipate further pressure on utilization rates in the case of NCI and CRAI, and on contract-value growth in the case of EXBD. As a result, we expect that margins will remain constrained in the current environment.

Indeed, CRAI recently reported that utilization rates fell again in the first quarter, despite headcount reductions and restructuring activities undertaken by the company. Likewise, EXBD reported that contract value and cross-sell ratio deteriorated further in the first quarter.

We anticipate that these types of challenges will persist for the industry well into 2009.

Zacks Investment Research

CRA International Still Suffering – Analyst Blog

Zacks Market Commentaries — Thu, 19 Mar 2009 21:33:49 +0000

Highlights include CRA International, Inc. (CRAI), First Advantage Corporation (FADV), Navigant Consulting (NCI) and The Corporate Executive Board (EXBD).

Rough 1st Quarter for Sell-Rated CRAI

Shares of Sell-rated CRA International, Inc. (CRAI) are down more than 10% today after the company reported 1st-quarter financial results that disappointed the Street. Both revenues and earnings were down significantly, and fell well short of both our expectations and the Street consensus estimates.

On the conference call, management stated that clients on the litigation side of the business were putting cases on hold, while clients on the consulting side of the business continue to freeze or slow down projects. While the company continues to be retained in new engagements, management stated that they are not seeing a normal ramp-up in billings in some cases.

The company has now reported disappointing financial results in 3 of the last 5 quarters.

Although management continues to reduce overall consultant headcount, the overall utilization rate has continued to decline. The cost-cutting measures implemented in recent quarters have helped to maintain margins, however, the declines in top-line revenue have resulted in lower earnings.

We continue to have a negative outlook for the business consulting services industry, based upon the difficult economic environment facing the companies' existing and potential customers. The results posted by CRAI reinforce our negative outlook on the sector, and Sell rating on industry peers such as First Advantage Corporation (FADV), Navigant Consulting (NCI) and The Corporate Executive Board (EXBD). We recommend that investors continue to avoid these names until some stabilization in their businesses has clearly been reached.
Read the full analyst report on "CRAI"
Read the full analyst report on "FADV"
Read the full analyst report on "NCI"
Read the full analyst report on "EXBD"
Zacks Investment Research

Business Consulting Services – Zacks Analyst Interviews

Zacks Market Commentaries — Thu, 05 Mar 2009 05:00:00 +0000

OUTLOOK

We have a negative outlook for the business consulting services industry, based upon the difficult economic environment facing the companies' existing and potential customers.

There are several ways in which we expect the current recession to negatively impact the business consulting industry.

Third, customer growth could slow significantly, as potential new customers would be significantly less likely to add consulting services when budgets are tight. This scenario is the most significant, in our opinion, as it has the potential to cause the greatest long-term negative impact on the business consulting industry. The amount of revenue growth that can be generated by existing customers is naturally limited. In order to significantly grow revenues, the consulting firms must continually add to their roster of clients. While the consulting firms may offer some price discounting in an attempt to win new business, this too would put pressure on margins and profitability.

In the current economic environment, we anticipate that some combination of all three scenarios detailed above will impact the business consulting industry in various degrees.

OPPORTUNITIES

We currently have no Buy-rated stocks in the business consulting services industry. Companies that we would expect to be best positioned through the recession are those that provide tangible outsourced services that customers simply cannot avoid. Going forward, we will pay close attention to the utilization rates and operating margins posted by companies in the industry, as an indicator as to which firms will be best positioned upon an improvement in economic conditions.

WEAKNESSES

In light of the macroeconomic challenges facing existing and potential customers, we expect the business consulting firms to face a difficult operating environment in the near term. Our Sell-Rated stocks in the industry include The Corporate Executive Board (EXBD), Navigant Consulting (NCI) and CRA International (CRAI).

Indeed, CRAI recently reported that utilization rates fell again in the fourth quarter, despite headcount reductions and restructuring activities undertaken by the company. Likewise, NCI reported that its overall utilization rate declined in the fourth quarter, and shares of EXBD tumbled following the release of fourth results in which several operating metrics continued to deteriorate.

We anticipate that these types of challenges will persist for the industry well into 2009.Zacks Investment Research

Business Consulting Services – Industry Outlook

Zacks Market Commentaries — Wed, 04 Mar 2009 21:15:11 +0000

Although the majority of attention regarding the current recession has focused on the consumer sector, business are being forced to cut back on expenditures as well. With businesses in nearly every industry looking for ways to lower non-critical expenses, we expect the business consulting industry to face a challenging operating environment in the near term.

OUTLOOK

We have a negative outlook for the business consulting services industry, based upon the difficult economic environment facing the companies' existing and potential customers.

Business consulting companies provide a wide range of services to their clients. Typical services include litigation support, business strategy planning, market and demand forecasting, policy analysis and consulting in the areas such as corporate finance, human resources, technology and restructuring.

With the economy currently in recession, companies in all industries are searching for ways to control expenses. Even in situations where a customer attributes significant value to the services provided by business consulting firms, these services may not be deemed critical in the short-run. As such, we expect that the operating environment faced by the business consulting firms will be challenging for the foreseeable future.

There are several ways in which we expect the current recession to negatively impact the business consulting industry.

First, existing clients may either delay decisions on whether or not to retain a consultant firm until economic visibility improves, or add fewer services than they would in periods of economic growth. With demand down, utilization rates (the amount of time billed in relation to amount of time worked) would likely continue to fall, and operating margins would contract. This scenario would lead to the most significant short-term impact on the consulting firms.

Second, existing clients that delay services may find that they can get by without the support provided by consulting firms. This scenario could potentially have a longer-term impact on the business consulting firms. Just as it is more difficult for retail companies to raise product prices after they have been lowered, so too would it become more challenging to convince customers to increase their expenditures on consulting services after a period of going without.

Third, customer growth could slow significantly, as potential new customers would be significantly less likely to add consulting services when budgets are tight. This scenario is the most significant, in our opinion, as it has the potential to cause the greatest long-term negative impact on the business consulting industry. The amount of revenue growth that can be generated by existing customers is naturally limited. In order to significantly grow revenues, the consulting firms must continually add to their roster of clients. While the consulting firms may offer some price discounting in an attempt to win new business, this too would put pressure on margins and profitability.

In the current economic environment, we anticipate that some combination of all three scenarios detailed above will impact the business consulting industry in various degrees.

OPPORTUNITIES

We currently have no Buy-rated stocks in the business consulting services industry. Companies that we would expect to be best positioned through the recession are those that provide tangible outsourced services that customers simply cannot avoid. Going forward, we will pay close attention to the utilization rates and operating margins posted by companies in the industry, as an indicator as to which firms will be best positioned upon an improvement in economic conditions.

WEAKNESSES

In light of the macroeconomic challenges facing existing and potential customers, we expect the business consulting firms to face a difficult operating environment in the near term. Our Sell-Rated stocks in the industry include The Corporate Executive Board (EXBD), Navigant Consulting (NCI) and CRA International (CRAI).

Each firm posted earnings results that fell short of Street expectations in 2008, and we anticipate further pressure on utilization rates in the case of NCI and CRAI, and on contract-value growth in the case of EXBD. As a result, we expect that margins will remain constrained in the current environment.

Indeed, CRAI recently reported that utilization rates fell again in the fourth quarter, despite headcount reductions and restructuring activities undertaken by the company. Likewise, NCI reported that its overall utilization rate declined in the fourth quarter, and shares of EXBD tumbled following the release of fourth results in which several operating metrics continued to deteriorate.

We anticipate that these types of challenges will persist for the industry well into 2009.

Zacks Investment Research

FCN Trades at a Justified Premium – Analyst Blog

Zacks Market Commentaries — Tue, 03 Mar 2009 14:22:02 +0000

Highlighted stocks include FTI Consulting (FCN), Navigant Consulting (NCI), CRA International (CRAI) and The Corporate Executive Board (EXBD).

In early November, shares of business consulting firm FTI Consulting (FCN) closed down 25% after the company reported disappointing 3rd-quarter results, and lowered its outlook for the remainder of the year.

Yesterday, the shares bucked the trend of the broader market by closing up 13% after the release of 4th-quarter results that were within management's guidance range, and $0.04 above the Street consensus estimate.

FCN's event-driven operating model enables the company to benefit during periods of economic upheaval. For example, during the 4th quarter, the company's Corporate Finance & Restructuring segment generated revenues that were up more than 45% year-over-year, with an accompanying 66% increase in EBITDA. Total revenues during the quarter were up 15.1%, while EBITDA was up 10.8%.

While these figures are impressive, it should be noted that FCN expanded its practice via acquisition during the past year, and the gains in revenue and EBITDA actually lagged the increase in revenue-generating headcount, which was up 29% year-over-year.

We continue to believe that, during this period of economic recession, FCN is better positioned than other business consulting firms such as Navigant Consulting (NCI), CRA International (CRAI) and The Corporate Executive Board (EXBD) -- all three of which we currently rate Sell. However, we believe that yesterday's rally in the share price of FCN has brought the stock back to an appropriate premium to these peers. As such, we maintain our Hold rating and $40 price target at this time.
Read the full analyst report on "FCN"
Zacks Investment Research

The Gas Prices Rollercoaster: Why Energy Infrastructure Are Inextricably Combined

Investment U — Fri, 16 Jan 2009 20:29:34 +0000

The Gas Prices Rollercoaster: Why Energy & Infrastructure Are Inextricably Combined by David Fessler, Advisory Panelist, Investment U Friday, January 16, 2008: Issue #917 President-elect Obama takes office in less than a week’s time. While many will be watching closely to see how he handles the ongoing financial crisis, I’ll be equally interested to see how he handles [...]

Business Consulting Services – Industry Outlook

Zacks Market Commentaries — Fri, 16 Jan 2009 00:00:00 +0000

OUTLOOK

We have a negative outlook for the business consulting services industry, based upon the difficult economic environment facing the companies' existing and potential customers.

There are several ways in which we expect the current recession to negatively impact the business consulting industry.

In the current economic environment, we anticipate that some combination of all three scenarios detailed above will impact the business consulting industry in various degrees.

OPPORTUNITIES

WEAKNESSES

In light of the macroeconomic challenges facing existing and potential customers, we expect the business consulting firms to face a difficult operating environment in the near term. Our Sell-Rated stocks in the industry include The Corporate Executive Board (EXBD), Navigant Consulting (NCI) and CRA International (CRAI).

Each firm has posted earnings results that have fallen short of Street expectations this year, and we anticipate further pressure on utilization rates in the case of NCI and CRAI, and on contract-value growth in the case of EXBD. As a result, we expect that margins will remain constrained in the current environment.

Sean P. Smith is a senior analyst covering the business consulting services industry for Zacks Equity Research.
"CRAI" Free Stock Analysis: Buy? Sell? Hold?
"EXBD" Free Stock Analysis: Buy? Sell? Hold?
"NCI" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

Business Consulting Services – Zacks Analyst Interviews

Zacks Market Commentaries — Fri, 16 Jan 2009 00:00:00 +0000

OUTLOOK

We have a negative outlook for the business consulting services industry, based upon the difficult economic environment facing the companies' existing and potential customers.

There are several ways in which we expect the current recession to negatively impact the business consulting industry.

In the current economic environment, we anticipate that some combination of all three scenarios detailed above will impact the business consulting industry in various degrees.

OPPORTUNITIES

WEAKNESSES

In light of the macroeconomic challenges facing existing and potential customers, we expect the business consulting firms to face a difficult operating environment in the near term. Our Sell-Rated stocks in the industry include The Corporate Executive Board (EXBD), Navigant Consulting (NCI) and CRA International (CRAI).

Sean P. Smith is a senior analyst covering the business consulting services industry for Zacks Equity Research.
"EXBD" Free Stock Analysis: Buy? Sell? Hold?
"CRAI" Free Stock Analysis: Buy? Sell? Hold?
"NCI" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

Business Consulting Services

Zacks Market Commentaries — Thu, 15 Jan 2009 16:50:11 +0000

Although the majority of attention regarding the current recession has focused on the consumer sector, business are being forced to cut back on expenditures as well. With businesses in nearly every industry looking for ways to lower non-critical expenses, we expect the business consulting industry to face a challenging operating environment in the near term.

OUTLOOK

We have a negative outlook for the business consulting services industry, based upon the difficult economic environment facing the companies' existing and potential customers.

Business consulting companies provide a wide range of services to their clients. Typical services include litigation support, business strategy planning, market and demand forecasting, policy analysis and consulting in the areas such as corporate finance, human resources, technology and restructuring.

With the economy currently in recession, companies in all industries are searching for ways to control expenses. Even in situations where a customer attributes significant value to the services provided by business consulting firms, these services may not be deemed critical in the short-run. As such, we expect that the operating environment faced by the business consulting firms will be challenging for the foreseeable future.

There are several ways in which we expect the current recession to negatively impact the business consulting industry.

First, existing clients may either delay decisions on whether or not to retain a consultant firm until economic visibility improves, or add fewer services than they would in periods of economic growth. With demand down, utilization rates (the amount of time billed in relation to amount of time worked) would likely continue to fall, and operating margins would contract. This scenario would lead to the most significant short-term impact on the consulting firms.

Second, existing clients that delay services may find that they can get by without the support provided by consulting firms. This scenario could potentially have a longer-term impact on the business consulting firms. Just as it is more difficult for retail companies to raise product prices after they have been lowered, so too would it become more challenging to convince customers to increase their expenditures on consulting services after a period of going without.

Third, customer growth could slow significantly, as potential new customers would be significantly less likely to add consulting services when budgets are tight. This scenario is the most significant, in our opinion, as it has the potential to cause the greatest long-term negative impact on the business consulting industry. The amount of revenue growth that can be generated by existing customers is naturally limited. In order to significantly grow revenues, the consulting firms must continually add to their roster of clients. While the consulting firms may offer some price discounting in an attempt to win new business, this too would put pressure on margins and profitability.

In the current economic environment, we anticipate that some combination of all three scenarios detailed above will impact the business consulting industry in various degrees.

OPPORTUNITIES

We currently have no Buy-rated stocks in the business consulting services industry. Companies that we would expect to be best positioned through the recession are those that provide tangible outsourced services that customers simply cannot avoid. Going forward, we will pay close attention to the utilization rates and operating margins posted by companies in the industry, as an indicator as to which firms will be best positioned upon an improvement in economic conditions.

WEAKNESSES

In light of the macroeconomic challenges facing existing and potential customers, we expect the business consulting firms to face a difficult operating environment in the near term. Our Sell-Rated stocks in the industry include The Corporate Executive Board (EXBD), Navigant Consulting (NCI) and CRA International (CRAI).

Each firm has posted earnings results that have fallen short of Street expectations this year, and we anticipate further pressure on utilization rates in the case of NCI and CRAI, and on contract-value growth in the case of EXBD. As a result, we expect that margins will remain constrained in the current environment.

Indeed, CRAI recently reported that utilization rates fell again in the fourth quarter, despite headcount reductions and restructuring activities undertaken by the company. We anticipate that these types of challenges will persist for the industry well into 2009.

"CRAI" Free Stock Analysis: Buy? Sell? Hold?
"EXBD" Free Stock Analysis: Buy? Sell? Hold?
"NCI" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

Aspire Talks with Hoku’s (Nasdaq:HOKU) Darryl Nakamoto

Small Cap Pulse — Mon, 15 Dec 2008 22:37:00 +0000

December 15, 2008 ndash; We recently had the opportunity to ask Darryl Nakamoto, CFO of Hoku Scientific some questions about what he is seeing in the solar sector: Aspire: What surprised you about the solar markets in 2008? Were there any significant developments (political, technological, consumer-driven and/or industry-driven) that occurred which you werenrsquo;t anticipating? Nakamoto: We were pleasantly surprised by the extension of the Federal Renewable Energy ITC. We did not foresee its inclusion in the legislation aimed at stabilizing the credit markets. In our local market, we were also very pleased by the progress represented by the Hawaii Clean Energy Initiative, which lays out a specific plan of action for the broad and rapid deployment of renewable technology throughout the state.nbsp; Aspire: Solar/PV energy costs between 21 and 38 cents per kWh to produce. We are still a ways off from reaching grid parity. When do you think that happens? And do you think this will be the key inflection point that will need to be reached to see solar production and consumption become a more significant part of the U.S. (and global) energy pie? What are other key factors?nbsp;nbsp; Nakamoto: By virtue of geography, Hoku Solar, our PV integration and installation business in Hawaii, is already operating in a near-grid-parity environment. (Grid electricity costs in Hawaii range from $0.20 per kWh to more than $0.40 per kWh in some areas.) This effective price parity certainly helps drive demand, but from our perspective, it seems that prices must still continue to come down before the PV market reaches a true inflection point.nbsp;For example, even with high electricity prices in Hawaii, we find that the market still requires government intervention to drive growth in PV consumption. Both State and Federal tax credits continue to provide a meaningful incentive for individuals and corporations to invest directly in their own PV systems. However, it is also worth mentioning that the tax credits do not seem to have inspired a corresponding amount of third-party investment into PV generation capacity. Based on the results achieved in other markets, it seems that a feed-in tariff may create the most favorable conditions for PV investment financing. To this end, we are again encouraged by the Hawaii Clean Energy Initiative, which includes a provision for a clean energy feed-in tariff.nbsp; Aspire: Conventional views in the industry expect polysilicon prices to plunge this next year with all of the new production coming online which will help supplies double while demand is only expected to increase about 30% to 40%. As a result, manufacturers of poly will see margins erode. Meanwhile, expectations are also for module oversupply to create ASP erosion in the midstream channel. At some point, shouldnrsquo;t all of this price erosion ultimately benefit the end consumer and stimulate demand? From a manufacturerrsquo;s perspective, what is your outlook on this dynamic, and what measures can you (and other manufacturers) take to adjust and protect your margins? Do efficiencies created by newer technologies at the poly plant level help compensate for erosion in poly prices?nbsp;nbsp; Nakamoto: We anticipate prolonged and extensive downward pressure on pricing (and margins) throughout the PV value chain. Notwithstanding current market externalities, the falling prices should eventually help stimulate market demand. And, considering the heavily fragmented nature of the solar manufacturing marketplace, this pressure could also create a compelling case for consolidation and vertical integration throughout the industry. nbsp;In any case, we believe that companies who have good controls and stabilized COGS will succeed in passing cost efficiencies along to their customers while still maintaining healthy margins. The recent volatility in polysilicon pricing poses a severe challenge to producers whose businesses were focused on spot market sales. This, in turn, could cause some new market entrants to delay initial production and create a situation where much of the planned new capacity is unlikely to come online when promised, if at all.nbsp;nbsp; Aspire: Some industry experts and analysts have lowered their expectations for solar growth in 2009 based on lower demand as a result of less government support in Europe. How big of an impact do you think that will have on overall growth, and to what extent do you think renewed support in Japan, as well as increasing legislative support in the U.S. will offset the situation in Europe?nbsp;nbsp; Nakamoto: We believe demand in the U.S. remains relatively untapped, and are optimistic that continued emerging domestic demand will offset potential reductions abroad.nbsp;nbsp; Aspire: What are the key issues, challenges and opportunities that you see storage playing in the progression of solar energy as a more meaningful energy source in the overall energy ecosystem?nbsp; Nakamoto: While distributed generation and storage will continue to play an increasingly important role in defining firm and resilient renewable power grids, near term strategies include the removal of net energy metering (NEM) limitations and/or the introduction of feed-in tariffs, like the ones contemplated by the Hawaii Clean Energy Initiative. Taking the cap off NEM addresses the local storage issue by allowing property owners to sell extra power back to the grid. At scale, this is useful ndash; particularly on a grid with low-renewable penetration ndash; because it encouraging the installation of large-scale PV systems at suitable locations and guarantees corresponding savings to the property owners in the form of credits for power fed back to the grid.nbsp; nbsp;Over time, as utilities approach RPS goals and the grid penetration of distributed renewable generation systems increases, more sophisticated distributed storage systems may be required to firm up the clean power during the peak/off-peak cycle.nbsp;nbsp; Aspire: What is your broader outlook on the solar industry in 2009 and for the next few years? Navigant Consulting, in a research report it provided the SEIA, said it expects that the 8-year extension of the ITC could ldquo;unleash $325 billion in private investment in the solar industryrdquo; over that time frame. To be sure, this would bode well for the industryrsquo;s growth ndash; but do you think that we should temper expectations based on the current financial crisis, and if so, how much?nbsp;nbsp; Nakamoto: We concur with many analysts who believe the fundamentals for the industry are intact and that the demand for clean, renewable energy will continue growing in 2009 and beyond.nbsp; nbsp;We expect the extension of the ITC will help inspire this continued growth, and that the impact of the current credit market constraints may be too slow, but not stop, market expansion. nbsp; pa href="http://feeds.feedburner.com/~a/smallcappulse/feed?a=InFRbv"img src="http://feeds.feedburner.com/~a/smallcappulse/feed?i=InFRbv" border="0"/img/a/p

Business Consulting Services – Zacks Analyst Interviews

Zacks Market Commentaries — Tue, 09 Dec 2008 00:00:00 +0000

OUTLOOK

We have a negative outlook for the business consulting services industry, based upon the difficult economic environment facing the companies' existing and potential customers.

There are several ways in which we expect the current recession to negatively impact the business consulting industry.

In the current economic environment, we anticipate that some combination of all three scenarios detailed above will impact the business consulting industry in various degrees.

OPPORTUNITIES

WEAKNESSES

In light of the macroeconomic challenges facing existing and potential customers, we expect the business consulting firms to face a difficult operating environment in the near term. Our Sell-Rated stocks in the industry include The Corporate Executive Board (EXBD), Navigant Consulting (NCI) and CRA International (CRAI).

Sean P. Smith is a senior analyst covering the business consulting services industry for Zacks Equity Research.
"CRAI" Free Stock Analysis: Buy? Sell? Hold?
"EXBD" Free Stock Analysis: Buy? Sell? Hold?
"METZ" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

Business Consulting Services

Zacks Market Commentaries — Mon, 08 Dec 2008 14:13:50 +0000

Although the majority of attention regarding the current recession has focused on the consumer sector, business are being forced to cut back on expenditures as well. With businesses in nearly every industry looking for ways to lower non-critical expenses, we expect the business consulting industry to face a challenging operating environment in the near term.

OUTLOOK

We have a negative outlook for the business consulting services industry, based upon the difficult economic environment facing the companies' existing and potential customers.

Business consulting companies provide a wide range of services to their clients. Typical services include litigation support, business strategy planning, market and demand forecasting, policy analysis and consulting in the areas such as corporate finance, human resources, technology and restructuring.

With the economy currently in recession, companies in all industries are searching for ways to control expenses. Even in situations where a customer attributes significant value to the services provided by business consulting firms, these services may not be deemed critical in the short-run. As such, we expect that the operating environment faced by the business consulting firms will be challenging for the foreseeable future.

There are several ways in which we expect the current recession to negatively impact the business consulting industry.

First, existing clients may either delay decisions on whether or not to retain a consultant firm until economic visibility improves, or add fewer services than they would in periods of economic growth. With demand down, utilization rates (the amount of time billed in relation to amount of time worked) would likely continue to fall, and operating margins would contract. This scenario would lead to the most significant short-term impact on the consulting firms.

Second, existing clients that delay services may find that they can get by without the support provided by consulting firms. This scenario could potentially have a longer-term impact on the business consulting firms. Just as it is more difficult for retail companies to raise product prices after they have been lowered, so too would it become more challenging to convince customers to increase their expenditures on consulting services after a period of going without.

Third, customer growth could slow significantly, as potential new customers would be significantly less likely to add consulting services when budgets are tight. This scenario is the most significant, in our opinion, as it has the potential to cause the greatest long-term negative impact on the business consulting industry. The amount of revenue growth that can be generated by existing customers is naturally limited. In order to significantly grow revenues, the consulting firms must continually add to their roster of clients. While the consulting firms may offer some price discounting in an attempt to win new business, this too would put pressure on margins and profitability.

In the current economic environment, we anticipate that some combination of all three scenarios detailed above will impact the business consulting industry in various degrees.

OPPORTUNITIES

We currently have no Buy-rated stocks in the business consulting services industry. Companies that we would expect to be best positioned through the recession are those that provide tangible outsourced services that customers simply cannot avoid. Going forward, we will pay close attention to the utilization rates and operating margins posted by companies in the industry, as an indicator as to which firms will be best positioned upon an improvement in economic conditions.

WEAKNESSES

In light of the macroeconomic challenges facing existing and potential customers, we expect the business consulting firms to face a difficult operating environment in the near term. Our Sell-Rated stocks in the industry include The Corporate Executive Board (EXBD), Navigant Consulting (NCI) and CRA International (CRAI). Each firm has posted earnings results that have fallen short of Street expectations this year, and we anticipate further pressure on utilization rates in the case of NCI and CRAI, and on contract-value growth in the case of EXBD. As a result, we expect that margins will remain constrained in the current environment.

"EXBD" Free Stock Analysis: Buy? Sell? Hold?
"NCI" Free Stock Analysis: Buy? Sell? Hold?
"CRAI" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

Obama White House Bodes Well For Renewable Energy and Clean Tech

Small Cap Pulse — Wed, 05 Nov 2008 21:54:01 +0000

November 5, 2008 – It should be self-evident that an Obama White House bodes well for renewable energy and clean technology. His energy plan is far more aggressive in terms of its commitment to reducing our dependency on oil and coal, and increasing production and consumption of renewable, cleaner sources of energy and we think that this should buoy alternative energy stocks by mitigating perceived risk about legislative support and creating more visibility for growth over the next decade. Here are several components of Obama’s energy platform that are focused on renewables and clean tech: · Investing $150 billion over 10 years in plug-in hybrid cars to get 1 million of them on the road by 2015; · A federal Renewable Portfolio Standard (RPS). Legislation that ensures 10% of our electricity comes from renewable sources by 2012 and 25% by 2025; · Implementing an economy-wide cap-and-trade program to reduce greenhouse emissions 80% by 2050; · Providing American’s with an emergency energy rebate of $500 per individual and $1,000 per couple; · A “Green Vet” initiative to provide job training and green collar jobs to vets; · Increasing fuel economy standards 4% per year; · A $7,000 tax credit for the purchase of advanced technology vehicles as well as conversion tax credits; · $4 billion in retooling tax credits to get the U.S. auto manufacturing industry on track to build fuel-efficient cars; · Mandate for all new vehicles to be flex-fuel vehicles; · Require at least 60 billion gallons of advanced biofuels by 2030; · Establish a National Low Carbon Fuel Standard; · Setting energy efficiency goals to reduce electricity demand 15% from DOE’s projected levels by 2020; · Setting national building efficiency goals, improving new building efficiency by 50% and existing building efficiency by 25% over the next 10 years; · Overhauling federal efficiency standards; · Reducing federal energy consumption; and · Investing in the smart grid. The Bush administration paid lip-service to renewable energy, while it poured most of its resources into oil, coal and nuclear. McCain’s administration would have made only slightly more of a commitment. After all, it ended up its campaign on Tuesday in coal country telling us all that Obama didn’t get it. Well, we think we do get it. The rest of the world gets it, and that is why even countries like China, as well as regions in the Middle East, are getting far more ambitious than the U.S. in their commitments to alternative, cleaner burning fuel technologies. Obama’s energy plan, if executed, will get this country back out in front, where it should be in leading the world’s energy and climate related policies. When Congress passed the renewable tax extension, Navigant Consulting provided a report to show that it would result in more than $230 billion investment into solar alone in the next eight years. Imagine what a federal renewable portfolio standard will do. There are concerns about whether the Obama White House will have the resources to enact his energy policy. To be sure, it won’t happen overnight, and that much is articulated in the plan itself. There are near-term, and mid-to-long terms planks in the platform. And the economic realities on the ground will certainly have an influence on timing and depth to which various policies can be enacted. On the other hand, investing in clean tech infrastructure projects and in renewable energy industries will be critical to getting the economy back on track, and in creating jobs, which is the cornerstone of our economy. We have seen several studies from non-partisan economic firms which have recommended that if the government does choose to create a multi-hundred billion stimulus package, it will be much better spent by investing in projects and industry to get the wheels of commerce greased again, as opposed to straight checks to individuals. We agree, and think that this can be the initial groundwork laid for Obama’s energy plan.

Where to Find Value and Growth in the Midst of Volatility

Small Cap Pulse — Wed, 22 Oct 2008 20:55:00 +0000

October 22, 2008 – Stocks have been revaluated in the past couple months, to say the least, and we hear pundit after pundit in the financial media prognosticating as to whether stocks have hit levels which truly represent oversold conditions, or whether there is still more downside, or both. No one knows, and generally speaking this point is not controversial. We will continue to report on a number of companies we think that regardless of whether the markets move up or down five hundred points in the near term – and they will – investors should own for the mid-to-long term. We continue to keep our sights on the alternative and clean tech sectors as being amongst the most compelling from a growth perspective. On a bipartisan basis, support for alternative energy is strong. The private sector continues to invest, and the international community is on board as well. The international energy agency has called for an remarkable $45 trillion to be invested into alternative energy and clean tech between now and 2050 to hit targets for carbon and GHG reduction. Investments will continue to pour into solar, wind, geothermal, biofuels, energy efficiency, energy storage and electric as well as hybrid automotive. Here is one of the most impressive companies, in our opinion, in the solar industry: LDK Solar (NYSE:LDK) – a Chinese solar wafer maker, which is moving upstream building a massive polysilicon plant which will enable it to better control its costs, and maintain stronger margins. The company has made a habit of raising guidance and beating expectations. Recently, it raised guidance for revenue to a range of $530 to $540 million for the Q3, up from a previous guidance range of $486 to $496 million. We expect it to post $1.8 billion in revenue this year, and $2.9 billion in revenue next year. The stock closed at $20.13 yesterday, about 1.20x this FY2008 sales, .74x FY2009 sales, and 6.6x projected earnings for this year. These multiples are characteristic of a low-growth, dividend paying utility company but they are not characteristic of a business that is growing revenue 243% from 2007 to 2008 and growing earnings 132% from 2007 to 2008. At a 2x price to sales ratio for FY2008, the stock would be trading at $33, and a 14x P/E ratio for this year’s forecasted earnings, the stock would be trading at $42. We think that both of these multiples are absolutely defensible and reasonable. Global growth in the solar market has been dramatic, and will only continue. Consider these points: · World solar photovoltaic (PV) market installations reached a record high of 2,826 megawatts (MW) in 2007, representing growth of 62% over the previous year.(*) · Global industry revenues were $17.2bn in 2007, while capital investment through the PV business chain totaled $5.3bn.(*) · The extension of the ITC could drive 19,000MW additional solar installations, and increased investment of $232 billion between 2009 and 2016. (**) (Source: Solarbuzz (*) and Navigant Consulting (**). So we are extremely bullish on the growth of solar for the foreseeable future, and solar companies building modules, wafers and cells to meet burgeoning demand downstream will need to get their polysilicon supply from someone. LDK will be one of the four to five primary suppliers. It is on track with all production, having recently announced that it reached annualized wafer production capacity of 1.2GW at the end of the third quarter, and ahead of its previously announced schedule target of year-end. This is a business that has set, and continues to set aggressive targets and meets and beats them. The stock is cheap, and to our point at the outset, whether the broader markets dip 500 points on any given day, the upside here, in our opinion, is undeniable. IMPORTANT DISCLOSURE NOTE: SCPEditor is LONG LDK. The information and trades provided here and in the comments are for informational purposes only and are not a solicitation to buy or sell any of these securities. Investing involves substantial risk and you should evaluate your own risk levels before you make any investment. Past results are not an indication of future performance.

Tontine Capital Partners LP – Hedge Fund Holdings Analysisge

Richard C. Wilson — Mon, 22 Sep 2008 05:01:57 +0000

Tontine Partners

Tontine Capital Partners - Holding Analysis

This post is being written as part of HedgeFundBlogger.com's Investment Securities Tool which analyzes the holdings of hedge fund managers.

If you're unfamiliar with Gendell and his Tontine Partners, then here's what you need to know. Founded 11 years ago, Tontine is a $10 billion fund ran by Jeffrey Gendell. He specializes in macro investing and takes very large, concentrated positions in companies he feels will benefit from those macro themes. Additionally, he will take on an activist role when necessary, to ensure shareholder returns. The fund has posted returns in excess of 100% in both 2003 and 2005.

So, let's get right down to it... what was Jeffrey Gendell up to this past quarter? The following is Tontine Partners' current holdings as of June 30th 2008 as released in their most recent 13F filing with the SEC. I've compared the positions in this most recent 13F to last quarter's 13F and here's what the breakdown looks like:

New Positions: (in no particular order)
Altra Holdings (AIMC) 1,272,832 shares
American Elec Technologies (AETI) 14,899 shares
Argan (AGX) 161,033 shares
DST Sys (DST) 2,233,158 shares
Itron (ITRI) 704,758 shares
Ladish (LDSH) 877,751 shares
Peoples Community Bancorp (PCBI) 90,183
Tetra Tech (TTEK) 3,216,197 shares
Thermadyne Holdings (THMD) 1,152,168 shares
Thomas and Betts (TNB) 5,766,719 shares
YRC Worldwide (YRCW) 2,746,171 shares

Added to:
Chemtura Corp (CEM) increased position by 313%
Satcon Technology (SATC) increased position by 165%
JP MorganChase (JPM) increased position by 153%
LSB Industries (LXU) increased position by 113%
Goldman Sachs (GS) increased position by 109%
Emcor Group (EME) increased position by 70%
US Concrete (RMIX) increased position by 64%
Patrick Industries (PATK) increased position by 49%
Accuride Corp (ACW) increased position by 46%
Tierone Corp (TONE) increased position by 45%
Mastec (MTZ) increased position by 45%
Sterling Financial (STSA) increased position by 39%
Goodyear Tire (GT) increased position by 28%
Sun Micro (JAVA) increased position by 22%
Foster LB Co (FSTR) increased position by 22%
Maxwell Technologies (MXWL) increased position by 16%
KB Home (KBH) increased position by 15%
Beazer Homes (BZH) increased position by 13%
Gentek (GETI) increased position by 11%
Pulte Homes (PHM) increased position by 9%
Elmira Savings Bank (ESBK) increased position by 9%
MI Homes (MHO) increased position by 8%
Merrill Lynch 9MER) increased position by 7%
Brush Engineered Materials (BW) increased position by 6%
Twin Disc (TWIN) increased position by 6%
Synalloy (SYNL) increased position by 5%
Perini (PCR) increased position by 5%
Sun Bancorp (SNBC) increased position by 5%
Toll Bros (TOL) increased position by 3%
Polyone (POL) increased position by 2%
PAB Bankshares (PABK) increased position by 2%
US Airways Group (LCC) increased position by 1%
Tenneco (TEN) increased position by 0.66%
AZZ Inc (AZZ) increased position by 0.60%
QCR Holdings (QCRH) increased position by 0.11%
Preformed Line Products (PLPC) increased position by 0.03%

Reduced Positions:
National Penn (NPBC) reduced by 94%
Astoria Financial (AF) reduced by 90%
Beneficial Mut Bancorp (BNCL) reduced by 90%
Koppers Holdings (KOP) reduced by84%
New York Community Bancorp (NYB) reduced by 78%
Meritage Homes (MTH) reduced by 69%
Citizens Rep Bancorp (CRBC) reduced by 67%
BB and T (MSDXP) reduced by 66%
Community Bk Sys (CBU) reduced by 63%
Georgia Gulf (GGC) reduced by 60%
Firstfed Financial (FED) reduced by 59%
National City (NCC) reduced by 57%
Central Pac Finl Corp (CPF) reduced by 47%
Northwest Bancorp (NWSB) reduced by 45%
Susquehanna Bancshares (SUSQ) reduced by 45%
Powersecure Intl (POWR) reduced by 45%
Amcore (AMFI) reduced by 44%
Citigroup (C) reduced by 43%
Graftech (GTI) reduced by 42%
First Merchants (FRME) reduced by 42%
First St Bancorp (FSNM) reduced by 41%
US Steel (X) reduced by 37%
Ameriserv Financial (ASRV) reduced by 35%
Esmark (ESMK) reduced by 34%
DR Horton (DHI) reduced by 34%
Provident NY Bancorp (PBNY) reduced by 33%
1st Source (SRCE) reduced by 32%
US Lime and Minerals (USLM) reduced by 32%
Associated Banc Corp (ASBC) reduced by 32%
Meta Financial Group (CASH) reduced by 30%
Webster Financial Corp (WBS) reduced by 29%
Ryland Group (RYL) reduced by 29%
Laporte Bancorp (LPSB) reduced by 29%
KBR (KBR) reduced by 27%
Bank of America (BAC) reduced by 26%
TRC (TRR) reduced by 24%
Whitney Holding Corp (WTNY) reduced by 22%
Ameris Bancorp (ABCB) reduced by 22%
Columbus Mckinnon (CMCO) reduced by 21%
AK Steel (AKS) reduced by 18%
United Bankshares Inc (UBSI) reduced by 16%
M And T Bank Corp (MTB) reduced by 15%
Centex (CTX) reduced by 15%
Southern Mo Bancorp (SMBC) reduced by 15%
Downey Financial (DSL) reduced by 12%
Rurban Financial (RBNF) reduced by 12%
Independent Bk Corp Mich (IBCP) reduced by 12%
Colony Bankcorp (CBAN) reduced by 12%
Camco Financial (CAFI) reduced by 11%
North American Energy (NOA) reduced by 11%
Foster Wheeler (FWLT) reduced by 10%
Grupo TMM (TMM) reduced by 9%
URS Corp (URS) reduced by 8%
Champion Enterprises (CHB) reduced by 8%
Ohio Vy Banc Corp (OVBC) reduced by 7%
First Bancshares (FBMS) reduced by 7%
LNB Bancorp (LNBB) reduced by 7%
Metrocorp Bancshares (MCBI) reduced by 6%
Wesbanco (WSBC) reduced by 6%
MB Financial (MBFI) reduced by 5%
TF Financial (THRD) reduced by 5%
Monarch Community Bancorp (MCBF) reduced by 5%
Provident Financial (PROV) reduced by 4%
Shaw Group (SGR) reduced by 4%
Integra Bank Corp (IBNK) reduced by 4$
Oreleans Homebuilders (OHB) reduced by 3%
Tradegar (TG) reduced by 3%
Iberiabank (IBKC) reduced by 3%
Teche Holding (TSH) reduced by 3%
First Financial Svc Corp (FFKY) reduced by 2.5%
Independence Fed Savings Bank (IFSB) reduced by 2%
HMN Financial (HMNF) reduced by 2%
Centrue Financial (TRUE) reduced by 2%
Mid South Bancorp (MSL) reduced by 2%
1st Independence Financial (FIFG) reduced by 2%
Princeton National (PNBC) reduced by 1.5%
Fidelity Bancorp (FSBI) reduced by 1.5%
Lincoln Bancorp (LNCB) reduced by 1.5%
Ameriana Bancorp (ASBI) reduced by 1.4%
Timken (TKR) reduced by 1.2%
CFS Bancorp (CITZ) reduced by 1.11%
MFB Corp (MFBC) reduced by 0.88%
Park Bancorp (PFED) reduced by 0.82%
First Defiance Financial (FDEF) reduced by 0.79%
Central bancorp (CEBK) reduced by 0.72%
Mutualfirst Financial (MFSF) reduced by 0.72%
Hexcel (HXL) reduced by 0.55%
Hawthorn Bancshares (HWBK) reduced by 0.43%
Citizens First Bancorp (CTZN) reduced by 0.4%
River Valley Bancorp (RIVR) reduced by 0.3%
First Keystone Financial (FKFS) reduced by 0.2%
First Banctrust (FBTC) reduced by 0.2%
Northeast Bancorp (NBN) reduced by 0.2%
New Hampshire Thriftbancshares (NHTV) reduced by 0.16%
Community Cap Corp (CPBK) reduced by 0.14%
Parkvale Financial (PVSA) reduced by 0.1%
Capital Bank Corp (CBKN) reduced by 0.1%
Premier Financial Bancorp (PFBI) reduced by 0.1%
HF Financial (HFFC) reduced by 0.1%
Provident Community Bancshares (PCBS) reduced by 0.05%
Southern Community Financial (SCMF) reduced by 0.05%
PVF Capital (PVFC) reduced by 0.01%
LSB Corp (LSBX) reduced by 0.01%

Removed Positions:
Positions Tontine Partners sold out of completely
American International Group (AIG)
Banctrust Financial Group (BTFG)
BCSB Bankcorp (BCSB)
BNC Corp (BNCC)
Capital Corp of the West (CCOW)
Capital One (COF)
Chart Inds Inc (GTLS)
City Hldg Co (CHCO)
Comerica (CMA)
Dime Community Bancshares (DCOM)
FNB Corp (FNBN)
First Niagara Financial (FNG)
Fox Chase Bancorp (FXCB)
Headwaters (HW)
Huntington Bancshares (HBAN)
Independent Bk Corp (INDB)
Instituform Technologies (INSU)
K Tron (KTII)
Mainsource Financial Group (MSFG)
MBIA (MBI)
Mercantile Bk Corp (MBWM)
Navigant Consulting (NCI)
Olin Corp (OLN)
Peoples Bancorp Auburn
Peoples Utd Financial (PBCTD)
PFF Bancorp (PFB)
Pinnacle Bankshares (PLE)
PNC Financial Services (PNC)
Powell Industries (POWL)
Quality Distr Inc (QLTY)
Sovereign Bancorp (SOV)
Standex International (SXI)
Superior Bancorp (SUPR)
Team Ag (TISI)
Tetra Technologies (TTI)
Wachovia (WB)
Washington Mutual (WM)
Willow Financial (WFBC)
Yadkin Finl Corp (YAVY)

Positions with no change:
Ada Es Inc (ADES)
Cleveland Cliffs (CLF) - 2 for 1 Stock Split (did not increase holding)
Advanced Energy Inds (AEIS)
Ameron (AMN)
AMR Corp (AAR)
Astec Industries (ASTE)
Badger Meter (BMI)
Baker Michael Corp (BKR)
CCF Holding Co (CCFH)
Ceco Environmental (CECE)
Channell (CHNL)
Comfort Sys (FIX)
Community Cent Bank Corp (CCBD)
Community Shores Bank Corp (CSHB)
Cooperative Bankshares (COOP)
Core Molding Technologies (CMT)
Dearborn Bancorp (DEAR)
Dycom (DY)
Ecology and Environment (EEI)
Enersys (ENS)
Englobal (ENG)
Esco Tecnologies (ESE)
Exide Technologies (XIDE)
Ferro Corp (FOE)
Fidelity Southern (LION)
First community Corp (FCC))
First Fed Northern Michigan Bancorp (FFNM)
First Franklin Corp (FFHS)
Furmanite Corp (FRM)
Gehl (GEHL)
Great Lakes Dredge and Dock (GLDD)
Greenbrier Cos (GBX)
Hardinge (HDNG)
Hawkins (HWKN)
Hopfed Bancorp (HFBC)
Horizon Bancorp (HBNC)
Innospec (IOSP)
Insteel (IIIN)
Internet Cap Group (ICGE)
Jacksonville Bancorp (JAXB)
Jefferson Bancshares (JFBI)
KMG Chemicals (KMGB)
Landmark Bancorp (LARK)
LCC Intl (LCCI)
Magnetek (MAG)
Material Sciences (MSC)
Matrix Service Co (MTRX)
MBT Financial (MBTF)
Meadow Vy Corp (MVCO)
Met Pro (MPR)
MFRI (MFRI)
Nacco (NC)
National Technical (NTSC)
North Central Bancshares (FFFD)
Ohio Legacy (OLCB)
Otter Tail (OTTR)
Peoples Bancorp of North Carolina (PEBK)
Perma Fix Environmental (PESI)
Pike Elec (PEC)
Portec Rail (PRPX)
Quanta Services (PWR)
Shiloh (SHLO)
Sifco (SIF)
Smith A O (AOS)
Supreme Industries (STS)
Tower Financial (TOFC)
Trinity Industries (TRN)
United Bancshares (UBOH)
Versar (VSR)
Wabash National (WNC)
Westmoreland Coal (WLB)

Top 10 holdings by % of portfolio:
1. X (Top Holding)
2. CLF
3. KBR
4. PWR
5. AKS
6. SPY
7. XIDE
8. SGR
9. TRN
10. FWLT

-----------------------------------------

Breakdown: Tontine Partners' 13F can be summed up in 3 words: Regional Bank mess. He has a ton of them, but they aren't very big positions relative to his whole portfolio. For the most part though, Gendell was selling all his financials, including the regionals. The only major financial plays he has left anyways are smaller positions. And, his only positions of major size in that sector are through calls. So, I'd have to think that he saved himself some serious money by exiting/reducing a number of those regional positions, as they could have really put him in the house of pain. It should be noted that he made large additions to the big banks such as JPM and GS.

The next major trend I noticed in his portfolio was that he is highly levered up with steel holdings. While he did do some position size reducing across a few of his steel names (X, AKS), one still has to wonder how he's faring right now given the recent selloff in steel? Whether he has sold anymore substantial positions is the real question. Because, if he hasn't, the recent drop in steel stocks has undoubtedly affected his portfolio in a negative way. Although he did reduce his position sizes.... he still has MASSIVE stakes in the steel names. After all, the top 2 holdings of his fund (and 3 out of the top 10 holdings) as of June 30th were steel stocks. So, he definitely profited handsomely from these steel names by nearly top-ticking the market, selling huge chunks before the peak in July. But, he's since given back much of these gains, assumming he still holds the steel names. This is actually a very unique situation where his 13F doesn't really help us. These holdings were as of June 30th and that was conveniently around the same time steel stocks started topping out. So, the real action in the steel names has been occuring outside of the time period the 13F covers (ie: the past month and a half). And, he is either taking a lot of pain from these massive steel holdings, or he has been partly responsible for the massive selloff in the steel names. We can only guess at this point. We'll have to wait until the next round of filings to find out what he's been up to, unfortunately. The timing overlap on this situation really prevents us from gaining much insight.

But, from this past quarter, we can take away the fact that Gendell definitely had strong conviction in steel and infrastructure names. After all, practically all of his top 10 holdings are concentrated in those 2 sectors. One other top 10 holding I wanted to touch on though is his #4 holding, Quanta Services (PWR). This chart has been breaking out and I have seen this name popping up more and more around financial sites. Plus, it fits right into his whole infrastructure theme. So, it doesn't surprise me at all to see that Gendell has already been in this name for quite some time. After all, he's a pretty smart guy. (Keep in mind: although some of these top holdings are indeed large stakes, some/many have experienced price appreciation, boosting their % share of the portfolio even more.)

Tontine Partners' most interesting move(s)? Whatever he has done in the past month and a half that we can't see. No joke. Since such a massive allocation of his portfolio was dedicated to steel stocks, his fund's performance has no doubt been affected by whatever decisions he has made recently. If he has been one of the many selling steel names, then he is in great shape. If not, then he's screwed. Us plebeians will have to wait until the next round of 13F's to find out Gendell's steel fate.

13F Source: SEC

Guest post by Market Folly

Free Daily Hedge Fund Newsletter

Related to Tontine Capital Partners:

Permanent Link: Tontine Capital Partners - Hedge Fund Holdings

Tags: Tontine Capital Partners, Tontine Partners, Tontine Capital Hedge Fund, Hedge Fund Manager Tontine Capital, Jeffrey Gendell, Tontine Partners LP