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For Immediate Release: Wednesday, August 27, 2008
Technology Stock Advisor News Alert:
Five High Technology Companies Added to TSA Active Stock Investment List
Issues a Sell on Carbo Ceramics (CRR) Hits Price Target of $60. Initial Buy Target Was $38,
Corporate Innovation In A Global Market Demands Companies Rich in Operating Cash Flow
Raleigh, N. C. Citing the recent management trend of global corporate outsourcing of innovation in global value chains, The Technology Stock Advisor, an online newsletter, initiated coverage of five technology companies that are rich in operating cash flow.
“In order to conduct innovation in today’s global markets,” said Tom Vass, the advisor to the newsletter, “companies must do two things well. They must outsource the search for technological innovation to trading partners around the globe, and they must have high reserves of internal cash to finance the corporate innovation projects.”
The table below describes annual operating cash flows for the five companies added to the TSA active stock investment lists.
TSA holds a patent on the intellectual property of technology stock selection. “Our patented stock selection method investigates the operational cash flow of companies over a 3 year period,” explained Vass. “We are looking for indications of how senior management is handling the issue of free cash flow because we suspect that there is a relationship between cash flow, corporate innovation (CI), and a subsequent rise in the stock price.”
“We also want the company to share profits with shareholders in the form of dividend payments,” said Vass. “This represents a balancing act on how best to use internal corporate resources, such as cash.”
TSA also issued a sell recommendation on a C Rated stock, Carbo Ceramics (CRR). “Carbo Ceramics met all of our screening criteria as an active stock, and we set the initial buy target on CRR at $38. It hit our Sell Target Price of $60 on Tuesday, August 26, 2008, and we advise taking the 58% gain,” said Vass.
About BorgWarner (BWA). BorgWarner, Inc. engages in the manufacture and sale of engineered automotive systems and components primarily for power train applications worldwide. It operates in two segments, Engine and Drivetrain. http://www.borgwarner.com/
About A.M. Castle & Co. (CAS). A.M. Castle & Co operates as a specialty metals and plastics distribution company in the United States, Canada, Mexico, France, the United Kingdom, and Singapore. The company operates in two segments, Metals and Plastics. http://www.amcastle.com
About Donaldson Company, Inc. (DCA). Donaldson Company, Inc., through its subsidiaries, engages in the manufacture and sale of filtration systems and replacement parts worldwide. It operates in two segments: Engine Products and Industrial Products. http://www.donaldson.com
Ab out Kennametal, Inc.(KMT). Kennametal manufactures and sells tooling, engineered components, and advanced materials used in production processes. The company operates through two segments, Metalworking Solutions and Services Group (MSSG); and Advanced Materials Solutions Group (AMSG). http://www.kennametal.com
About McKesson Corporation, (MCK). McKesson Corporation, together with its subsidiaries, provides supply, information, and care management products and services for the healthcare industry. It operates in two segments, Distribution Solutions and Technology Solutions. http://www.mckesson.com
About The Technology Stock Advisor. The weekly newsletter offers detailed investment advice on technology stocks to buy, including the buy price and the sell price. The newsletter is updated daily. www.technologystockadvisor.com. Annual subscriptions are $120.
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For Immediate Release: Thursday, August 21, 2008
Total System Services (TSS)
Hill-Rom (HRC)
Raleigh, N. C. Calling Total Systems Services, “pristine investment grade,” Thomas E. Vass, the investment advisor to The Technology Stock Advisor Newsletter, announced two new additions to the TSA active stock investment lists.
“Earlier this year, Total Systems had moved from my active investment stocks to my TSA Watch List after an unexpectedly sharp rise in their long-term debt obligations,” said Vass. The company’s long-term debt, which had increased to $268 million, recently dropped back to $192 million and re-met one of the TSA screening criteria for long term debt-to-shareholders equity.
“I have known for many years of Total Systems’ dedication to corporate innovation and their ability to generate new products and services, and had been monitoring their progress in bringing their long-term debt-to-shareholder equity back in line,” Vass explained.
“I have come to trust the S & P quality rating as a supplement to my own stock selection criteria,” Vass said.
Vass assigned TSS an initial target buy price, and the target sell price. “Generally, but not in every case, the target sell price is set at about two standard deviations from the stock’s average price range,” said Vass.
Hill-Rom, the other company added to the TSA active investment list, is a recent spin-out from the parent corporation, Hillenbrand Industries, Inc. The company filed the Form 10 registration statement for the spin-out with the U. S. Securities and Exchange Commission (“SEC”) on November 5, 2007.
HRC makes equipment for the health care industry, provides associated services for wound, pulmonary and circulatory care, and offers medical equipment outsourcing and asset management services.
“Our initial stock screening process begins by searching for companies undergoing corporate innovation (CI),” said Vass. “Our method is based upon a theory of technology that suggests to us that companies undergoing innovation may experience a boost in their stock price within a 3 year period.”
“When HRC was spun off from the parent company, it met many of the initial screening criteria set by TSA for inclusion in our active stock investment lists,” he explained. HRC was assigned the TSA rating of B, following the S & P rating of the company.
About TSS. Total System Services: A Rated by S & P
SIC: 7389 – Information Technology Services
TSS provides electronic payment processing and related services to financial and non financial institutions. Services include processing consumer, retail, commercial, government services, stored value and debit cards. Based in Columbus, they offer merchant acquiring services to financial institutions and other organizations in the United States through their wholly owned subsidiary, TSYS Acquiring Solutions, L.L.C., and in Japan through their majority owned subsidiary, GP Network Corporation.
About HRC. Hill-Rom: B Rated by S & P
SIC: 3841 – Surgical and Medical Instruments
Hill-Rom is a leading worldwide manufacturer and provider of medical technologies and related services for the health care industry, including patient support systems, non-invasive therapeutic products for a variety of acute and chronic medical conditions, medical equipment rentals and health information technology solutions. Hill-Rom’s comprehensive product and service offerings are used by health care providers across the health care continuum in hospitals, extended care facilities and home care settings worldwide, to enhance the safety and quality of patient care and patient customers.
About The Technology Stock Advisor. The weekly newsletter offers detailed investment advice on technology stocks to buy, including the buy price and the sell price. The newsletter is updated daily. www.technologystockadvisor.com
For Immediate Release: Thursday, August 07, 2008
Technology Stock Advisor Issues Stock News Announcement
TSA Newsletter Initiates Coverage On Three New High Technology Stocks and Issues Sell Recommendation on Johnson & Johnson
Added to Active Stock Lists
Olympic Steel (ZEUS)
The Street.Com (TSCM)
Balchem (BCPC)
Hit Price Target
Johnson & Johnson (JNJ) Sell Price Target of $70. Initial Buy Target was $53.
Raleigh, NC. The Technology Stock Advisor, a weekly internet stock newsletter covering high technology stocks, initiated coverage today on three new companies and issued a sell recommendation for one company that hit the TSA sell target price.
“Our initial stock screening process begins by searching for companies undergoing corporate innovation (CI),” said Thomas Vass, the investment advisor to the newsletter.
“Our method is based upon a theory of technology that suggests to us that companies undergoing innovation may experience a boost in their stock price within a 3 year period,” he added.
Once the stocks make it through the technology screening process, the stocks are evaluated for certain financial characteristics. “All major corporations in the world have access to the same capital equipment and same labor skills,” explained Vass. “Much of the difference in stock price appreciation is related to the non-labor, non-capital production factors that affect a firm’s gross profits.”
“We want to find indicators that senior management of the company is consistently making good use of corporate innovation resources because we believe that innovation is the single greatest factor today in driving stock market prices,” he stated.
Two of the new companies BCPC and ZEUS had met some of the initial TSA criteria, and had been placed in the TSA Watch List of Stocks to be monitored. “After some considerable length of time in the Watch List,” said Vass, “both companies met all the criteria and moved to the active lists, with newly established target buy prices and target sell prices.”
One of the companies, TheStreet.com, went directly on the TSA active list after being discovered in the daily search for stocks undertaken by TSA.
In addition to the 3 new companies, The Technology Stock Advisor issued a sell recommendation on Johnson & Johnson, at the target sell price of $70. “J&J is a terrific technology company,” said Vass, “but one of the important rules of our method is to take the gain when the stock hits our target sell price.”
TSA holds a patent on the intellectual property of technology stock selection. “Our patented stock selection method discovers companies in global industrial value chains where most new technology is created that drives corporate innovation,” said Vass.
About The Technology Stock Advisor. The weekly newsletter offers detailed investment advice on stocks to buy, including the buy price and the sell price. The newsletter is updated daily. www.technologystockadvisor.com
For Immediate Release: June 30, 2008
Increased Long Term Debt Threatens Technology Innovation of American Companies
Vass cited the tough global economic conditions, which are causing top line revenues to decrease for most American technology companies. “The companies are taking on increased long term debt at the very moment that their sales are being affected by the global economic slow-down. The restrictive covenants in their debt agreements will tend to lock them into existing declining markets selling their increasingly technologically obsolete products.”
Vass explained that companies that have over 30% long term debt to stockholder’s equity have a difficult time diverting cash flow to the search for either radical innovation, or even the more mundane sustaining innovation. “As a result of being locked into the terms and conditions of the debt, the companies are forced to continue selling products that are on an evolutionary pathway to extinction. Decisions about innovation are more influenced by the outside bankers who demand a stable flow of revenues to repay the debt than by the global market conditions which demand continual innovation investments financed by free cash flow.”
As an example of the newsletter’s technology companies that have dramatically increased long term debt, Vass provided the following table:
Company and Symbol Previous Long Term Debt New Long Term Debt (in millions)
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3M MMM
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2,824
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4,140
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Nucor NUE
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922
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2,491
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Multi-Color LABL
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0
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121
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PerkinElmer PKI
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234
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566
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Lennox International LII
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95
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359
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PPG Ind. PPG
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1,181
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3,369
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Triumph Group TGI
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120
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418
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Tennant TNC
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2.47
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89
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Joy Global JOYG
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396
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567
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The Technology Stock Advisor
“Some of these companies have been in our active stock lists for many years,” said Vass. “They have been terrific investment candidates in the past, but the tough global markets are causing senior management to adopt financial strategies that are not optimal for the new open, global markets that feature fast innovation life-cycles. Long term debt is cheap today, but succumbing to the lure of cheap debt today will threaten the company’s long term viability to innovate.”
The relationship between technological innovation and long term debt as a criteria for stock selection is explained in one of Vass’ books Predicting Technology: Identifying Future Market Opportunities and Disruptive Technologies, (2007).
About The Technology Stock Advisor www.technologystockadvisor.com The Technology Stock Advisor is an online weekly newsletter that covers stocks in the high technology industrial clusters in America based upon a patented method for investigating economic relationships in technology value chains. The newsletter provides stock advice, insights and market commentary on innovation trends in American technology companies.
Stocks selected by the newsletter are trading members of the following nine high technology value chains in the U.S. economy:
- Chemicals
- Precision Instruments
- Engine Equipment
- Computer and Electronic Equipment
- Information Services
- Pharmaceuticals
- Fertilizer and Chemical Products
- Industrial Machinery and Distribution Equipment
- Aerospace
For Immediate Release: June 19, 2008
Technology Stock Advisor News Alert: Two New Companies Added to Technology Stock Watch List
S&P Quality Ranking B-
Western Digital designs, develops, manufactures and sells hard drives worldwide to original equipment manufacturers (“OEMs”) and original design manufactures (“ODMs”) for use in computer systems, subsystems or CE devices, and to distributors, resellers and retailers. They also sell hard drives as stand-alone storage products and integrate them into WD-branded external storage appliances for purposes such as personal data backup and portable or expanded storage of digital music, photography, video, and other data.
SIC: 7372 Services-Prepackaged Software S&P Quality Ranking: B-
MicroStrategy is a worldwide provider of business intelligence software that enables companies to report, analyze and monitor the data stored across their enterprise to reveal the trends and insights needed to make better business decisions. MicroStrategy provides sophisticated analytical performance to business users in the format that suits them best, from high-level dashboards to custom reports and advanced analysis via e-mail, web, fax, wireless and voice communication channels
For Immediate Release: Thursday, May 22, 2008
For Immediate Release: June 12, 2008
- (CMTL) Comtech Telecommunications Corp.
- (RHT) Red Hat Inc.
- (CYMI) Cymer Inc.
For Immediate Release: June 4, 2008
Technology Stock Advisor News Alert: New Companies Added to Technology Stock Watch List
Raleigh, N.C. The Technology Stock Advisor, an online newsletter investment advisor with a patented stock selection methodology for picking technology stocks, added two new stocks to the newsletter’s watch list today.
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