Tag - Apei

American Public Education Inc. (Nasdaq:APEI) is the sole 52-week low on Friday's session.

Fuel Systems Solutions Inc. (Nasdaq:FSYS), ArcSight Inc. (Nasdaq:ARST) and Insulet Corp. (Nasdaq:PODD) are among the most actively traded companies in Friday's trading among companies with market capitalizations under $1 billion.

Also included among the results: Netlogic Microsystems Inc. (Nasdaq:NETL), InterDigital Inc. (Nasdaq:IDCC), American Public Education Inc. (Nasdaq:APEI), Zions Bancorp (Nasdaq:ZION), Energy Conversion Devices Inc. (Nasdaq:ENER) and Bucyrus International Inc. (Nasdaq:BUCY).

Tom O’Halloran is a partner and director of Small Cap Growth Investments at Lord Abbett. He is responsible for managing the firm’s small-cap and micro-cap growth products, overseeing the investment teams, and directing the investment strategies.

O’Halloran has been in the investment business for 20 years. Prior to joining Lord Abbett, O’Halloran was an executive director and senior research analyst at Dillon Read/UBS Warburg from 1988 to 2001. Before beginning his career in the financial services industry, he was a trial lawyer from 1980 to 1986. O’Halloran earned an MBA from Columbia University, a JD from Boston College and an AB from Bowdoin College. He also is a holder of the Chartered Financial Analyst designation.

What qualities do you look for in a small-cap stock? Have your criterion changed given the current macro environment?

“There are 3,000 stocks that we look at that we could own. We try to screen out 80% of those through growth hurdles and size parameters in terms of market cap, and financial strength in terms of debt-to-asset ratios. Then we look at the 600 or so, or 20%, of the names. The first inquiry is a two step process after that. First we identify the best businesses then we pick stocks based purely on their growth, not on takeover potential, turnaround potential or valuations. Organic growth is the best kind of growth, but if there’s a strategy of acquisitions that is multi year and sensible to supplement their organic growth, then that’s fine. We require 12% minimum top-line growth, and we want earnings to be growing at least as fast. Our portfolio on average is growing closer to 25%. 

“In terms of what represents a good business, we’re looking at four things: the first two at the microeconomic level, or inside the doors of the company, and three and four are considering the environment in which they function.

1) “When we saw Morningstar at $750 million on the IPO, we said, ‘This is like Moody’s. Moody’s is $20 billion. This is a jewel of a business.”  We saw Mercadolibre, Inc. (Nasdaq:MELI) at $1 billion and we said, “This is the eBay of South America. This is a great business.’  

2) “Is it a good business? Does it have a strong management team? Is the management competent and credible? It’s very important at the small-cap level to have good management. [In terms of] competency, we look at Mickey Drexler at J. Crew. He worked magic at The Gap. He redefined casual clothing in America. He’s a genius of a retailing executive and an example of a highly competent . . .

The Russell 2000 (NYSE:IWM) has reversed its trajectory and is rising steeply.

At 11:00 a.m. ET, the small-cap index had added 8.09 points, or 1.16%, to 706.47. The Dow Jones Industrial Average was up 77.19 points, or 0.62%, to 12,604.45.

Small caps were in negative territory but rebounded abruptly shortly after 10 a.m. ET. The reversal came despite news of a speech by U.S. Treasury Secretary Henry Paulson that the economy has turned down.

News on the economic front is mixed, with the U.S. Labor Department reporting before the start of trading that jobless claims for the week ended April 5 fell more than expected, while the four-week moving average, considered . . .

The Russell 2000 (NYSE:IWM) has recovered from its earlier loss and is posting a modest rise.

At 11:38 a.m. ET, the small-cap index was up 2.50 points, or 0.35%, to 716.07. The Dow Jones Industrial Average had declined 2.93 points, or 0.02%, to 12,623.10.

Small-cap stocks surprisingly rose into positive territory shortly after 11 a.m. ET. The move comes despite news before the opening of a steeper-than-expected decline in payrolls.

The U.S. Labor Department reported that payrolls fell by 80,000 in March, while total job losses for the first two months was revised up to 152,000 from a previously reported 85,000.

Companies providing school services are currently the best performing industry group. Among them is small-cap American Public Education, Inc. (Nasdaq:APEI), which has seen its stock rise 4%.

The Russell 2000 (NYSE:IWM) is holding on to its gains after a brief decline.

At 11:23 a.m. ET, the small-cap index had added 2.32 points, or 0.34%, to 685.50. The Dow Jones Industrial Average was up 15.47 points, or 0.13%, to 12,231.87.

Small-cap stocks are posting modest gains as investors digest the latest economic news and make sense of the Bush administration’s plan to overhaul financial regulation.

The National Association of Purchasing Management-Chicago reported after the start of trading that its purchasing managers’ index rose to a level of 48.2 in March from 44.5 in February. The increase is more than economists were expecting but still shows a contraction.

Production, employment and new orders increased, easing concerns of a decline in business investment.

The Russell 2000 fell as soon as the numbers were announced, slipping below the flat line at about 10:30 a.m. ET before rebounding.

Investors are also analyzing the Bush administration’s plan to reform financial regulation. The proposal, outlined by U.S. Treasury Secretary Henry Paulson after the opening, would give the U.S. Federal Reserve increased power over large non-bank financial firms and set minimum licensing standards for . . .

The Russell 2000 (NYSE:IWM) is sinking into negative territory, posting losses steeper than those of the other major U.S. indices. At 2:13 p.m. ET, the small-cap index was down 4.95 points, or 0.71%, to 687.44. The Dow Jones Industrial Average had declined 22.88 points, or 0.19%, to 12,279.58.

For no apparent reason, small caps slipped below the flat line after 12 p.m. ET, and briefly attempted to recover before settling on a steeply downward trajectory at about 1:30 p.m. ET.

Shares of companies offering school services are the worst performing industry group, followed by retailers.

Among the losers is Charles Town, W.Va.-based American Public Education, Inc. (Nasdaq:APEI), which provides online postsecondary education to . . .

The Russell 2000 (NYSE:IWM) has eased off its earlier highs while the other major U.S. indices are holding on to larger gains.

At 12:01 p.m. ET, the small-cap index had added 1.40 points, or 0.20%, to 693.79. The Dow Jones Industrial Average was up 35.82 points, or 0.29%, to 12,338.28.

Small-cap stocks have been seesawing as investors digest news of the latest economic numbers.

The U.S. Commerce Department reported before the start of trading that personal income rose a more-than-expected 0.5% in February, beating expectations of a 0.3% increase.

The same report also showed that personal consumption increased 0.1%, above projections but below January’s 0.4% climb. Also, a key measure of core inflation climbed just 0.1%, putting 12-month inflation within the U.S. Federal Reserve’s target range.

However, the Reuters/University of Michigan survey released after the opening shows that U.S. consumer confidence tumbled more than expected in March, falling . . .

Entropic Communications
www.entropic.com
(Nasdaq: ENTR)
Scheduled for Dec. 3
$765.9 million post-money valuation

In this day and age, we have so many machines—televisions, computers, telephones—to keep us entertained, but there is an increased desire for devices that have content compatibility, which isn’t easy. That’s where Entropic Communications comes in.

The company designs semiconductors to handle multimedia home networks. It’s a fabless semiconductor company, which means that another company handles the manufacture and distribution of the chips. This reduces Entropic’s capital requirements. Because semiconductor equipment isn’t cheap, the outsourced manufacturing more than makes up for the loss of operating control that goes along with it. In April of 2007, Entropic acquired RF Magic, which had a complementary portfolio of home networking products.

Entropic’s semiconductors are purchased by electronics manufacturers to put in televisions, digital video recorders, modems and other devices that pull video from coaxial cable. In 2006, Entropic and RF Magic combined drew 31% of their $67.7 million in revenue from Actiontec Electronics, Inc., 23% from Motorola, Inc. (NYSE: MOT) and 11% from CalAmp Corp. (Nasdaq: CAMP). This customer concentration forms one risk, but that’s less worrisome than the risk of cable companies and customers standardizing around a competing home networking technology, such as Ethernet, xDSL, or WiMax.

Neither Entropic (founded in 2001) nor RF Magic (founded in 2000) is profitable, which is no surprise given the early-stage nature of the underlying technologies. The combined companies raised more then $124 million from five different venture capital firms. None of these are selling shares on the IPO and they’ll control 36% of the company after the IPO, which values their stakes at $275.7 million. Some shareholders, including some managers and small venture firms, are selling all or part of their holdings in the IPO. Most of the proceeds will go to general corporate purposes, keeping the company going until its products catch on and it stops losing money.