Tag - DGIT

Hampton Roads Bankshares Inc. (Nasdaq:HMPR), ATC Technology Corp. (Nasdaq:ATAC) and Central Valley Community Bancorp (Nasdaq:CVCY) are among the new 52-week lows in Monday's trading among companies with market capitalizations under $1 billion.

Also included among the results: Encore Bancshares Inc. (Nasdaq:EBTX), DG FastChannel Inc. (Nasdaq:DGIT), Aladdin Knowledge Systems Ltd. (Nasdaq:ALDN), Northrim BanCorp Inc. (Nasdaq:NRIM), Medtox Scientific Inc. (Nasdaq:MTOX) and Quidel Corp. (Nasdaq:QDEL).

The Russell 2000 (NYSE: IWM) gained ground for the second day in a row as investors digested the latest financial news. The small-cap index advanced 2.07 points, or 0.27%, to 756.13. The Dow Jones Industrial Average (INDU) fell 25.20 points, or 0.19%, to 13,207.27.

On a year-to-date basis, the Russell 2000 is down 3.97%, while the Dow is up 5.87% and the S&P 500 has climbed 2.57%.

Small-cap stocks went on a rollercoaster ride today but eventually came out on top as investors were unsure what to make of the latest financial news.

The day began with news that Morgan Stanley (NYSE: MS) swung to a fourth-quarter loss due to $9.4 billion in mortgage-related write-downs. The New York-based company responded by saying that it will sell as much as 9.9% of itself to a Chinese sovereign fund for a cash infusion of $5 billion.

The move is similar to the one made by a number of financial heavyweights that posted losses on investments in securities that contain subprime home loans and then turned to foreign investors for a cash infusion to boost capital.

The difficulties stem from the slump in the U.S. housing sector, which began in the second half of 2006 when home prices started to fall. That led to a wave of foreclosures and delinquencies that hit borrowers with subprime loans particularly hard and damaged the financial institutions that had purchased securities backed by those same loans.

As a global credit squeeze took hold, the U.S. Federal Reserve responded by lowering the federal funds rate, the rate at which commercial banks make overnight loans to each other, and creating a Term Auction Facility (TAF) program to auction term funds to depository institutions against collateral that can be used to secure loans.

The first of those auctions was on Dec. 17, and today the Fed announced that it gave $20 billion at an interest rate of 4.65%. The auction attracted 93 bidders that asked for a total of $61.55 billion, a sign that banks are hungry for money to improve balance sheets and boost liquidity.

The Russell 2000 (NYSE: IWM) is little changed this afternoon. At 2:47 p.m. ET, the small-cap index had added 2.57 points, or 0.34%, to 756.63. The Dow Jones Industrial Average (INDU) was up 30.24 points, or 0.23%, to 13,262.71.

The day began with news that Morgan Stanley (NYSE: MS) swung to a fourth-quarter loss due to $9.4 billion in mortgage-related write-downs. Like many of its peers facing similar circumstances, the New York-based financial services giant responded by saying that it will sell as much as 9.9% of itself for a cash infusion of $5 billion. In this case, help came from a Chinese sovereign fund.

Investors were apparently unsure what to make of the news, because the Russell 2000 opened with a decline but quickly moved higher, only to fall again at about 11:30 a.m. ET along with the Dow. At about 2 p.m. both indices rose again.

In other financial news, the U.S. Federal Reserve announced after the start of trading that it auctioned $20 billion in a special operation at an interest rate of 4.65%. The auction, which was held on Monday, saw 93 bidders ask for a total of $61.55 billion, a sign that commercial banks are thirsty for money to help their balance sheets and improve liquidity.

The auction was part of the Fed’s previously announced plan to alleviate the global credit squeeze with periodic lending of funds. Also participating are the Bank of Canada, the Bank of England, the European Central Bank and the Swiss National Bank.

The Russell 2000 (NYSE: IWM) is just above the flat line as investors react to the latest financial news.
 
At 10:41 a.m. ET, the small-cap index had added 1.98 points, or 0.26%, to 756.04. The Dow Jones Industrial Average (INDU) was up 55.44 points, or 0.42%, to 13,287.91.

The futures were little changed this morning on news that Morgan Stanley (NYSE: MS) swung to a fourth-quarter loss due to $9.4 billion in mortgage-related write-downs. Quarterly net revenue was a negative $450 million, compared with a positive $7.85 billion a year ago.

The New York-based financial services giant responded by saying that it will sell as much as 9.9% of itself to a Chinese sovereign fund for $5 billion.

The move is similar to the one made by a number of financial heavyweights that posted losses on investments in securities that contain subprime home loans and then turned to foreign investors for a cash infusion to boost capital.

Today’s news once again highlights the wide reach of the contagion from the subprime mortgage crisis and its ability to infect the largest of financial actors. But the bulls will take solace in the fact that cash infusions will allow the wounded companies to continue their operations.

Elsewhere, a report by the Mortgage Bankers Association showed that mortgage applications for the week ended Dec. 14 decreased 19.5% on a seasonally adjusted basis.

The Market Composite Index was 653.8, compared with 811.8 a week earlier. The four week moving average, a more stable measure, is down 1%.

Stagnating home prices and tighter lending standards have made many Americans unwilling or unable to purchase homes, further contributing the slump in the U.S. housing sector. The ailing housing sector is one of the major factors dragging down U.S. economic growth.

Shares of DG Fast Channel, Inc. (Nasdaq: DGIT) are treading in the green today after Morgan Joseph initiated coverage on the digital media delivery service provider with a “buy” rating and a target price of $30 per share. 

Morgan Joseph analyst James Leahy says the advent of HDTV will drive digital advertising distribution, which should buoy DG Fast Channel’s long-term prospects, as the company is a leader in distribution of digital media to advertising and broadcast industries.

The analyst said he believes that as HDTV has finally gone mainstream with growth in television set purchases, available HD content and available HD channels on pay television platforms, he thinks that the trend toward more prevalent adoption of HD will push advertisers to produce high-definition advertisements requiring digital delivery to broadcast outlets.

The company’s core business should remain the major focus going forward; however, Leahy says the company has an eye out to penetrate Internet-based advertising by capitalizing on the growth potential in online video and online video-based advertising. Leahy says DG Fast Channel would most likely execute on such a strategy through its partnership with Viewpoint, an Internet marketing technology company.

Furthermore, the presidential election and coverage of the Olympics should create a “solid” 2008 for the company, according to Leahy. The presidential election cycle could be one of the most expensive with more dollars than usual being poured into television and Internet advertising, the analyst says. Additionally, the 2008 Olympics will command some of the most extensive coverage than in the past.

Shares of DG Fast Channel (DGIT) gained $1.04, or 5.86%, to $18.78 at 11:16 a.m. ET. Shares of DG Fast Channel have been trading in the range of $9.60 to $25.50 for the past 52 weeks.

DG FastChannel Inc. (Nasdaq: DGIT) shares are down slightly in pre-market trading despite the technology services provider’s announcement that its third-quarter revenue rose to $25.1 million, from $18.8 million a year earlier.

“The third quarter was strategically and financially productive for DG FastChannel as we completed two significant transactions and generated record third-quarter operating results,” CEO Scott Ginsburg said in a statement. “With increasing video traffic, continued client adoption of new service products and the benefit of significant merger cost synergies, we are well-positioned to deliver solid growth from our business model in the fourth quarter and throughout 2008.”

The Dallas-based firm swung to a quarterly profit of $2 million, or $0.12 per share, from a loss of $4.5 million, or $0.35 per share, during the same period of 2006.

The third-quarter results included consolidated revenue from six weeks of Point.360’s advertising operations and about one month from GTN, Inc.’s ad distribution business.

The company also reaffirmed its 2007 revenue guidance of a range of $110 million to $113 million. For 2008, DG expects revenue in the range of $122 million to $126 million.

“Looking to next year and beyond, HD digital content distribution will pick up additional momentum,” Ginsburg said. “The imminent opportunities created by the mandate from Congress and FCC for broadcasters to move to the HDTV broadcast standard will support significant long-term revenue growth.”

In pre-market trading, DGIT shares are down 1.43%, or $0.33, at $22.71. Over the last 52 weeks, shares have ranged from $9.60 to $25.50.

It’s a digital advertising world, and DG FastChannel, Inc. (Nasdaq: DGIT), which dubs and transmits spot ads to TV and radio stations, is going digital along with it.

It wasn’t always that way for the Irving, Texas-based company. Five years ago, when it was called Digital Generation Systems, just about the only thing digital about the company was a stock price dipping deep into single digits. Its ad delivery business consisted almost entirely of shipping tapes to radio stations, and competition was brutal. Moreover, since the dot-com crash, the offline ad business has been almost as moribund as talking sock puppets on TV (remember Pets.com?).

From an all-time high of about $13 in mid-1996, a few months after going public, its stock had dropped to around $0.50 by the end of 2005, with a few surges in between.

But the company had also started its comeback strategy by then. Through a combination of internal development and acquisition, it had moved into the delivery of broadcast television spots, eliminating competition and increasing prices. It has also been increasingly beaming digital ads to stations through satellite.

The big change came in 2006. It announced a merger with FastChannel Network, which was delivering advertising through the internet. It gained some Street cred back on May 26, 2006, when it did a reverse-split of 1:10, turning a $0.55 stock into a $5.50 stock and consummated its merger five days later. The newly named DG FastChannel was truly a digital company and was taking a leadership position.

Within the last year, DG FastChannel has also bought up competitors GTN, Point.360 (which brought in a large number of clients in Hollywood) and Pathfire (which increased its ability to deliver ads through the Internet as well as increasing its business with clients such as Warner Bros, Sony Corp. (NYSE: SNE) and Paramount). Finally, it reached a partnership with Viewpoint Corp. (Nasdaq: VWPT) and bought 13% of the company, giving it a presence in delivering ads to Internet sites. That’s turning it into a large, diversified monopoly—it now counts over 5,000 advertising clients, including 75 of the 100 largest advertisers.

China Techfaith Wireless Comm. Tech. Ltd. (Nasdaq: CNTF), Sequenom, Inc. (Nasdaq: SQNM) and Alto Palermo S.A. (Nasdaq: APSA) are among the biggest percentage gainers in Wednesday's trading among companies with market capitalizations under $750 million.

Here are today's biggest percentage gainers:

Shares of DG FastChannel Inc. (Nasdaq: DGIT) edged higher in pre-market trading after the provider of digital media services reported it sees second quarter sales above analyst estimates.

The Irving, TX .-based company reported it expects to book revenues of $21.5 million to $21.7 million for the second quarter ended June 30, compared with revenue of $15.1 million for the second quarter of 2006. Two analysts polled by Thomson Financial expected revenues of $21.02 million for the second quarter.

Shares of DG FastChannel edged up 1.03%, or $0.19, to $18.79 in pre-market trading.

The Russell 2000 small cap index is leading the rally on Wall Street on news that core producer prices in May remained in check. At 11:40 a.m. ET the Russell 2000 had gained 5.14 points, or 0.62%, to 837.68. The Dow Jones Industrial Average was up 60.97 points, or 0.45%, to 13,543.32.

Shares of software provider Convera Corp. (Nasdaq: CNVR) are eking out a gain following news its quarterly loss narrowed. The net loss for the quarter ended April 30 was $7.7 million, or $0.15 per share, compared with a net loss of $10.6 million, or $0.21 per share, during the same three months of 2006, the Vienna, Va.-based company reported after Wednesday’s close.

This week, we turn to a trio of newsletter advisors who have found opportunities among fast-growing small-cap, high-tech companies – in digital media, wireless services, and computer-aided design.

Jim Collins in OTC Insight sees upside in DG FastChannel (Nasdaq: DGIT), the leading provider of digital services for ad agencies and media outlets.

The company, he notes, with a market cap of $330 million, enables the electronic delivery of advertisements from advertising agencies to traditional broadcasters and other media outlets.

 “They operate a nationwide network which links more than 5,000 advertisers and agencies with more than 21,000 radio, TV, cable, network and print publishing destinations throughout the U.S. and Canada,” Collins says.

Its services, he notes, include online creative research, media production and duplication, distribution, and broadcast verification. Indeed, Collins points out, the company owns an online database of content and credits for the U.S. television commercial production industry.

Collins, who uses a quantitative approach to selecting his holdings, adds that the stock has a relative strength rating of 99 (out of 100) and receives a rating of ‘A’ for accumulation and distribution.

Small cap growth specialist Thomas Bishop sees opportunity in Ceragon Networks
(Nasdaq: CRNT), which operates in the wireless phone market by making products that help move data via microwave radio from tower to tower in a wireless network.