Hawaiian Holdings Inc (NASDAQ: HA)
Prescience initiates coverage on Hawaiian Holdings Inc (NASDAQ: HA) at Strong Buy. We believe shares of Hawaiian Holdings Inc. (“HA” or “Hawaiian”) are grossly undervalued, reflecting a deep misunderstanding of the company’s economics. In 2010, HA began investing heavily in growth, implementing a capex program to build additional capacity primarily in support of new international routes. Being that initiating services on routes involves start-up costs, and that from the time service is initiated they take 3 years to reach optimal profitability (i.e., to mature), HA’s GAAP margins were negatively impacted; put another way, from 2010 – 2013, when HA was expanding most aggressively, its GAAP financials both understated and obscured its economic potential. With the capex program approaching completion, HA is at an inflection point: As capex decelerates and new routes mature, we expect Hawaiian’s GAAP financials to begin reflecting its economic potential. We expect margins to rise in 2014 and free cash flow to turn positive in 2015, opening the door for capital returns to shareholders. In 2016 alone, we project the company will generate free cash flow equating to 35% of its current fully diluted market capitalization. We believe Hawaiian stock has an intrinsic value today of $20 per share, >97% above current trading levels. The significant disconnect presented by HA’s valuation is sweetened by several near and intermediate-term catalysts we believe will drive share price toward intrinsic value. Read our complete report by clicking HERE.
Renewable Energy Group (NASDAQ: REGI)
Prescience initiates coverage on Renewable Energy Group (NASDAQ: REGI) at Strong Sell. REGI’s equity has not yet priced in the likely impact of the impending December 31, 2013 expiration of the Blenders’ Tax Credit, which we estimate to have contributed 77% and 104% of Adjusted EBITDA in 2012 and in the 9ME 9/30/2013, respectively. Upon expiration of this subsidy in 2.5 weeks’ time, we believe REGI’s margins will be wiped out and that it will operate at a significant loss. We believe REGI’s financial disclosures obscure the significance of the tax credit, preventing investors from ascertaining its impact credit on REGI’s financial state, resulting in a steep disconnect between intrinsic value and trading levels. Read our complete report by clicking HERE.
Horsehead Holding Corp. (NASDAQ: ZINC)
Prescience initiates coverage on Horsehead Holding Corp, Inc. (NASDAQ: ZINC) at Strong Buy. Horsehead is on schedule to complete a transformational process by Q3 2013, from which the company will emerge as one of the lowest-cost producers of zinc metal products in the world. ZINC’s under-followed stock is unreasonably cheap and does not reflect the imminent transformative change that will occur before the end of 2013. Once the new plant opens and begins operations, we expect investors to re-rate Horsehead, resulting in material multiple expansion. Read our complete report by clicking HERE.
Planet Payment, Inc. (NASDAQ: PLPM)
Prescience issues an update on Planet Payment, Inc. (NASDAQ: PLPM), reiterating it at Strong Buy. We believe the panic liquidation by growth-oriented investors following the company’s revenue miss and guidance reduction is fundamentally misguided, resulting in the immediate opportunity to buy into a defensible, high- growth and margin, increasingly cash-generative, and recurring revenue business at a significant discount to intrinsic value. Our analysis of the company’s underlying operating metrics and a closer examination of the company’s explanations for the guidance reduction reveal that Planet is setting up for a string of upside surprises. We believe the guidance revision was solely the result of delays in tech roll-outs, which are likely to be resolved before year end, and that such delays have no impact on Planet’s earnings power. Read our complete report by clicking HERE.
Ambarella, Inc. (NASDAQ: AMBA)
Prescience initiates coverage on Ambarella, Inc. (NASDAQ: AMBA) at short-term Sell. While we appreciate the qualities of AMBA’s business and the company’s long-term prospects, our channel checks indicate it is at elevated risk of an earnings miss. Read our complete report by clicking HERE.
AVG Technologies N.V. (NYSE: AVG)
Prescience initiates coverage on AVG Technologies N.V. (NYSE: AVG) with a Strong Sell. Read our complete report by clicking HERE.
United States Antimony Corp (AMEX: UAMY)
Student Transportation, Inc. (NASDAQ: STB)
Planet Payment, Inc. (OTCBB: PLPM)
Yongye International, Inc. (NASDAQ: YONG)
Yongye International, Inc. (NASDAQ: YONG)
A-Power Energy Generation Systems (NASDAQ: APWR)
China Gerui Advanced Materials Group, Ltd (NASDAQ: CHOP)
Cogo Group, Inc (NASDAQ: COGO)
A-Power Generation Systems, Inc. (NASDAQ: APWR)
Advanced Battery Technologies, Inc. (NASDAQ: ABAT)
A summary of our report has been published on SeekingAlpha.com and can be read by clicking on the following link: Advanced Battery Technologies: Questioning the Validity of Company Claims and SEC Filings.
We have also produced a video summary of our findings, along with discussions with certain customers, available at the following links: