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The chart
at the time of recommendation
ELX - (Sold on 4/24/09 for a gain of 54%)
BOUGHT
at $6.68 SOLD
at $10.30
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The following
is the commentary subscribers originally received.
On
October 23rd Emulex Corporation, a provider of host server products
and embedded storage products including switches, bridges, routers, and
I/O controllers reported fiscal 2009 1st quarter revenue of $111.7
million. This compares to revenue of $117 million in the 1st quarter of
fiscal 2008. Net income was $7.1 million or 9 cents per share. On a non
Gaap basis net income was $17.9 million or 22 cents per share and
compares to non Gaap net income of 27 cents per share in the year ago
period. EPS was flat sequentially. Both revenue and EPS exceeded the
company's prior guidance. Gross margin was 63% which compares to 58% a
year ago. Adjusted gross margin was 67.4% vs. 66.5% a year ago.
During the last quarter 78% of sales was
derived directly from OEM customers, while 22% was through
distributors. The top 3 customers included IBM, accounting for 28% of
sales last quarter, Hewlett Packard, accounting for 16% of sales, and
EMC accounting for 13% of total sales. Also during the fiscal 1st
quarter, 64% of total revenue was derived from outside the United
States.
For the 2nd fiscal quarter Emulex expects
revenue of $111 - $116 million. Adjusted gross margin is expected to be
67% with adjusted earnings of 20 - 23 cents per share. The current
consensus earnings estimate for fiscal year 2009, which ends June 2009,
calls for EPS of 82 cents. At the current price the stock has a forward
PE of just 8.
Emulex has cash & investments worth $294.4
million or $3.62 per share. Book value is $4.93 and the company carries
no debt. At the current level the stock has a
price-to-sales ratio of 1.1 and a price-to-book ratio of 1.3. (originally recommended on 12/03/08)
4/24/09-
SOLD FOR A GAIN OF 54%. DURING THE SAME TIME PERIOD THE
NASDAQ
WAS UP 12%.
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