Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

The Key Earnings For The Week of Feb. 11: Cognex Corporation (CGNX), Rackspace Hosting, Inc. (RAX)

Page 1 of 2

It’s another big week for earnings, and there are some interesting stocks reporting. So far this earnings season has been okay. The markets have been in benevolent mode, and even companies that missed estimates and guidance have seen recovery after an initial sell off. I can’t help thinking that a catalyst will come along and remind speculators that the glass might well be half empty after all. It’s inevitable at some point because markets don’t go up in straight lines like this forever.

Cognex Corporation (NASDAQ:CGNX)Monday

It’s quiet Monday, but I think Healthcare supplier Owens & Minor, Inc. (NYSE:OMI) is worth a look. However, my main focus will be on Cognex Corporation (NASDAQ:CGNX). I’m a bit of a fan of this company and its visual information capture machinery. It’s a good play on increased robotics and automation in manufacturing plants, and particularly within emerging markets. Indeed, I’ve covered it in more detail in an article linked here.

Longer term I think the company will do very well, but short term who knows? For example, China’s export orientated industries have seen slowing growth, so will they cut back on automation?  In addition, conditions still don’t look great in semiconductors and solar, so Cognex could see further weakness there. I’m watching closely because any hiccup could make the stock very interesting. Another thing to look out for is its key automotive vertical; will Chinese growth offset slower growth in the US in the way that Alcoa Inc. (NYSE:AA) hopes it will?


A couple of unsung emerging market plays give results on Tuesday when Avon Products, Inc. (NYSE:AVP) and The Western Union Company (NYSE:WU) report earnings. Quidel Corporation (NASDAQ:QDEL) has already served notice that it will be a beneficiary of a nasty flu season, so the price action after the results will be fascinating.

My highlight for the day will be Rackspace Hosting, Inc. (NYSE:RAX). The market has been a bit jittery on the cloud computing sector ever since VMware disappointed the marketplace, and consequently Rackspace has been a little weak of late. I could argue that this is also due to concerns about its evaluation, but those issues seem to have been long forgotten with this stock. It trades on an EV/EBITDA multiple of nearly 28x, but in my opinion the company hasn’t yet demonstrated that it can generate growth and decisively reduce its CapEx/revenue requirements (it needs to buy a lot of gear to service customer contracts) and, until it does, free cash flow will be held back. The market may not care about this, but I do, so I am not buying.


The big news today is all about Cisco Systems, Inc. (NASDAQ:CSCO). I’m going to cover it in an earnings preview, but for now here is a review of last quarter’s results.  Funnily enough another tech company that fits the bill of ‘you can’t really love it but it’s worth a look because it’s so cheap’ will also report. NetApp Inc. (NASDAQ:NTAP) is having its difficulties, but I still think it is a genuine takeover target. Don’t be surprised if it happens.

Deere & Company (NYSE:DE) will update on the state of agricultural markets, and Henry Schein, Inc. (NASDAQ:HSIC) is an interesting defensive growth play with distribution activities in dental products and animal health care amongst others.

My highlights for the day are two vastly different companies; data canter owner Equinix Inc (NASDAQ:EQIX) and Whole Foods Market, Inc. (NASDAQ:WFM). Data center spending has been one of the strongest sectors of tech investing in 2012, and investors need to keep a close eye on what Equinix says about its future capital expenditure plans. In addition, its gross margins should be watched closely. Every data center stock that I follow has increased its investment plans over the last year, and naturally the concern is that there may be overcapacity at some point. It hasn’t happened yet, but that doesn’t mean you shouldn’t look out for it.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!