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Elite Traders Group Initiates Coverage of: Concurrent Computer Corporation (NASDAQ: CCUR)
The Following Is an Investment Opinion Being Issued by the Elite Traders Group LLC
By: Marketwired .
Feb. 5, 2013 05:31 PM
NEW YORK, NY -- (Marketwire) -- 02/05/13 -- Elite Traders Group Issues Research Report on: Concurrent Computer Corporation (NASDAQ: CCUR), (NASDAQ: ARRS), (NASDAQ: SEAC)
Concurrent Computer Corporation (NASDAQ: CCUR) is a leader in video, media data intelligence and real-time Linux® solutions. CCUR doesn't get the glorious headlines that video and communication suppliers get; they just provide support products and services to make those firms look better. Last week CCUR shares started at $6.51/share and ended in trading Monday at $7.75/share, an increase of 19%, on share volume over the average by a factor of ten. Why the sudden interest in CCUR shares? The company released their second quarter (ending 12-31-12) financial results this week and it appears that investors liked what they read.
The comparison between the six months ending 12-31-11 and 12-31-12 showed an increase in revenue of about 8% and a reduction in operating expenses of about 12%. These are not stellar percentages but both are in the right direction and both happened after the company saw revenues slipping in recent quarters.
Investors may also have taken note that the company has no debt, thus no interest expense. How many times do we see tech stock that are appealing, with meteoric revenue growth and short term price per share appreciation, only to look further to see these figures were financed by massive debt or equity obligations that are an impediment to profits and ultimately result in a share price that crashes and burns?
Concurrent has been paying a regular dividend of $.06 (3% based on Friday's closing price) and paid a special $.50 dividend in December (an additional 6.7%). That kind of yield surely triggered some investor yield based search software.
With all that Concurrent has going for it, why has a bottom line profit been elusive? CCUR has annual revenues in the $60-70 million range and they are competing with Arris Group, Inc. (NASDAQ: ARRS) with revenues over $1 billion (figures from FYE 12-31-11) and SeaChange International, Inc. (NASDAQ: SEAC) with revenues of $189 million (figures from FYE 1-30-12). Arris and SeaChange have larger video providers as customers and do not catch cold if one of their customers sneezes. Economies of scale affect every enterprise and CCUR is the smallest and only operationally unprofitable company amongst the three (a large non-recurring expense caused a 2011 loss). Current Computer has an EBITA of -2%, Arris has an EBITA of 13% and SEAC has an EBITA of .055% (FYE 1-30-12). An enterprise in this industry doesn't need to be the size of Arris to be profitable but the pattern is evident. A company the size of CCUR feels whatever pain their customers feel and cutbacks at some of their customers have impacted revenues and the spending cuts have not gone deep enough.
Concurrent Computer has a lot of positives for investors. They are in a growth industry, selling innovative products and services. Sales are trending up and expenses are trending down. They have no debt and pay a dividend. The price per share has been on a steady incline for six months and didn't skyrocket overnight to its current level. (Get Full Report) http://www.firstpennypicks.com/get-your-free-research-report/
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Elite traders Group LLC employees are not registered as an Investment Adviser in any jurisdiction whatsoever. This advertisement is for informational purposes only and is not intended to be a recommendation to buy or sell securities in any of the profiled companies listed here.
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