AMD Zooms on Earnings

Sunnyvale, California-based semiconductor manufacturer Advanced Micro Devices (AMD, $6.70, up $0.86) surged 14.73% on continued optimism following its 2nd quarter surprise earnings beat and bullishness on the company’s future products. Some investors speculated that the company could be an acquisition target, especially by Chinese buyers. In April, the company sold majority stakes in two Asian operations sold for over $371 million.

On July 21, the $5.32 billion company reported 2nd quarter results that beat on earnings and revenue, and the company gave a bullish forecast. It reported earnings per share (EPS) of -$0.05 on $1.02 billion in revenue, compared to EPS of -$0.17 on $942 million in revenue a year ago. Analysts had expected EPS of -$0.08 on $951.29 million in revenue.

For the 3rd quarter, which it reports on October 27 after the close, the company expects revenue to increase 18% from the 2nd quarter with a margin of error of 3% ($1.18-$1.24 billion). Analysts are expecting EPS of -$0.02 on $1.12 billion in revenue, compared to EPS of -$0.17 on $1.06 billion in revenue a year ago. For full year fiscal 2016, analysts estimate EPS of -$0.24 on $4.03 billion in revenue, compared to EPS of -$0.09 on $4.24 billion in revenue in 2015. Analysts give the stock a 1-year price target of $5.13, but that could head higher. High target is $8.50. The stock has no trailing PE, no forward PE, PEG of 0.11, price/sales of 1.37, and a current ratio of 1.59. Short interest is 11.78%, which means that shares could see a short squeeze on good news.

Groupon (GRPN) Gets an Upgrade

Chicago, Illinois-based coupon service Groupon (GRPN, $3.85, up $0.36) surged 10.32% after an analyst upgraded the stock to overweight from neutral, and raised its 1-year price target to $6. The company plans to spend $150-$200 million more for marketing in 2016 than in 2015.

The increased marketing will largely be in the U.S. The analyst believes this would attract 3.5-4.5 million new active accounts in 2016, and the company would also attract similar numbers in 2017. This is believed to add annualized gross profit of $215-$280 million. In 2015, the company had a gross profit of $1.385 billion.

On April 28, the $2.18 billion company reported 1st quarter results that beat on earnings and revenue. It reported earnings per share (EPS) of -$0.01 on $731.97 million in revenue, compared to EPS of $0.03 on $750.4 million in revenue a year ago. Analysts had expected EPS of -$0.02 on $718.36 million in revenue.

For the 2nd quarter, which it reports on July 27 after the close, analysts are expecting EPS of -$0.02 on $710.97 million in revenue, compared to EPS of $0.02 on $738.4 million in revenue a year ago. For full year fiscal 2016, the company forecasts revenue of $2.75-$3.05 billion.

Analysts estimate EPS of $0.20 on $2.97 billion in revenue, compared to EPS of $0.14 on $3.12 billion in revenue in 2015. Analysts give the stock a 1-year price target of $4.07. High target is $6. The stock has no trailing PE, a forward PE of 72.64, price/book of 5.83, price/sales of 0.74, and a current ratio of 0.81. Short interest is 12.81%, which means that shares could see a short squeeze on good news.

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Leading Brands (LBIX) Signs Deal With China

Vancouver-based healthy beverage distributor Leading Brands (LBIX, $2.02, up $0.33) surged 19.52% after the company said that it signed an agreement to supply 500 milliliter bottles and 5 liter WaterBoxes of its HappyWater bottled water to a significant customer in China. Happy Water is a natural alkaline blend sourced from the Halcyon Spring and the Mount Woodside Spring in the Canadian mountains of British Columbia. The water is advertised as having a pH of 7.4, which is ideal for the body, and contains natural minerals and electrolytes. The first shipment is expected in third quarter.

Besides HappyWater, the $5.77 million company sells brands TrueBlue, PureBlue, TrueBlack, and Canada FreshAir, and distributes its beverages in Canada, the western United States, and Asia. On June 14, the company reported 1st quarter earnings per share (EPS) of C$0.10 on C$2.85 million in revenue, compared to EPS of -C$0.15 on C$3.20 million in revenue a year ago. Gross margin rose to 38.7% compared to 31.1% a year ago. HappyWater sales jumped 38%. In the 2nd quarter 2015, the company had EPS of C$0.07 on C$3.78 million in revenue. For full year fiscal 2015, the company had EPS of -C$0.45 on C$11.01 million in revenue, compared to EPS of C$0.04 on C$13.86 million in revenue a year ago. The only analyst following the company gives the stock a 1-year price target of $4.40. The stock has no trailing PE, no forward PE, price/sales of 0.69, and a current ratio of 1.56. Short interest is 0.05%, which means that short sellers probably do not think the stock will fall much.