Square reports today

What to watch in Square earnings report

Square reports today. See Stockwinners.com for additional analysis

Square (SQ) is scheduled to report results of its third fiscal quarter after the market close on November 8, with a conference call scheduled for 5:00 pm EDT.

What to watch for

1. OUTLOOK

During the company’s last earnings call, Square said it sees third quarter adjusted earnings per share of 4c-5c and revenue of $562M-$568M. Square also raised its 2017 adjusted earnings per share outlook to 21c-23c from 16c-20c, and its 2017 net income outlook to (21c)-(19c) from (24c)-(20c).

Additionally, the company sees 2017 revenue between $2.14B-$2.16B.

2. BANKING BUSINESS

Back on September 7, The Wall Street Journal reported that Jack Dorsey’s Square was looking to get into the banking business and was planning to submit an application to form a wholly owned bank based in Utah. The unit, which will be called Square Financial Services, would offer loans and deposit accounts to small businesses and be capitalized with $56M in cash, the publication noted.

3. UPSIDE, RISING VALUATION

On October 11, Oppenheimer analyst Jed Kelly initiated Square with an Outperform and $35 price target saying he sees continued upside from execution on core initiates to expand into multiple revenue channels.

The analyst told investors he believes Square’s cohesive user experience is enabling the company to create a differentiated product that is in the early stages of utilizing its vast payment data to build an ecosystem for small businesses that can obtain products such as loans, marketing services, inventory management and ecommerce solutions.

Later in the month, Deutsche Bank analyst Bryan Keane raised his price target for Square to $37 saying he expects “robust” revenue growth when the company reports quarterly results.

Continued business momentum and rising sector valuations drive the new price target, the analyst noted, reiterating a Buy rating on Square.

Square reports today. See Stockwinners.com for details

His peer at Nomura Instinet also raised his price target on the name to $45 from $33. Analyst Dan Dolev argues that the third quarter report will “prove to be a defining moment” with the shares up 147% year-to-date. The analyst’s study showed that the consensus “chronically underestimates” Square’s profitability. He expects a “stellar” second half of the year with adjusted EBITDA potentially reaching $145M-$150M.

4. VALUATION TOO HIGH

Meanwhile, earlier this month, Stifel analyst Scott Devitt downgraded Square to Hold from Buy ahead of the company’s third quarter earnings. While he expects a strong quarter, the analyst noted the stock is up 168% year-to-date.

5. NEW PRODUCTS

On October 31, Square unveiled its newest hardware offering, Square Register, a versatile, fully integrated point-of-sale, built in-house to work seamlessly with any business.

Square Register is priced to offer larger sellers a fully integrated point-of-sale solution at $999, or with a convenient financing option of $49 per month for 24 months. Sellers can accept all forms of card-present payments with a new, simple transaction rate of 2.5% + 10c per transaction.

SQ last traded at $36.59. It has a 52-weeks trading range of $11.43 – $37.75.


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Cord blood cells help cerebral palsy patients

Amag says cord blood cells improve motor function in some with cerebral palsy

Amag says cord blood cells improve motor function in some with cerebral palsy. See Stockwinners.com for details

Cord Blood Registry, or CBR, from AMAG Pharmaceuticals (AMAG) announced research recently published in the journal Stem Cells Translational Medicine found that children with cerebral palsy who received an infusion of their own neo-natal cord blood, collected & stored at birth, saw improved motor function and brain connectivity one year after treatment, when receiving a high cell dose.

The blood within a newborn baby’s umbilical cord contains young stem cells that can renew themselves and become specialized. These cord blood stem cells have been proven in treatment to help children replace damaged blood cells with healthy ones and strengthen their immune systems.

The prospective, randomized, double-blind, placebo-controlled Phase 2 clinical study examining the efficacy of autologous cord blood in treating children with cerebral palsy was led by researchers at Duke University.

“The study results are compelling for further study of the use of autologous blood cord infusions in children with cerebral palsy,” said Joanne Kurtzberg, M.D., the study’s principal investigator and director of the Carolinas Cord Blood Bank and The Duke Pediatric Blood and Marrow Transplant Program.

Dr. Kurtzberg is also chief scientific officer of the Robertson Clinical and Translational Cell Therapy Program at Duke University.

Following a Phase 1 study which showed the use of autologous cord blood to be safe in children with neurologic disorders, the aim of the Phase 2 trial was to determine efficacy using autologous cord blood for treatment of cerebral palsy in pediatric patients ages one through six. Improvement in the study was measured using the Gross Motor Function Measure (GMFM-66), a standardized assessment to evaluate motor function (e.g. walking ability).

More than one-third of the children in this study—or 22 out of 63 total study participants—had their cord blood preserved at birth with CBR.  The results of this study highlight the need for continued research of autologous cord blood infusions to treat cerebral palsy. CBR is partnering with research institutions to support FDA-regulated clinical trials investigating the use of cord blood in regenerative medicine applications across a wide variety of conditions, including autism, acquired hearing loss, and two clinical trials on cerebral palsy at Augusta University and The University of Texas Health Sciences Center.

AMAG closed at $13.05.


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Digital Ally exploring strategic alternatives

Digital Ally exploring strategic alternatives

Digital Ally exploring strategic alternatives. See Stockwinners.com for details

Digital Ally (DGLY) announced that its board has initiated a process to explore a full range of strategic alternatives to best position the Company for the future including, but not limited to, monetizing its patent portfolio and related patent infringement litigation against Axon Enterprise, Inc. and Enforcement Video, LLC d/b/a WatchGuard Video, the sale of the company as a whole, or the sale of select properties or groups of properties or individual businesses.

The result of the strategic review may also include the continued implementation of the company’s business plan.

The company has retained Roth Capital Partners to assist in this process.

There can be no assurance a transaction will result from this process and the company does not intend to disclose additional details unless and until it has entered into a specific transaction.

The company has recently received several unsolicited inquiries from parties involving a variety of alternatives including, but not limited to,

  1. seeking distribution and/or licensing rights to the company’s patented VuLink auto-activation technology,
  2. seeking distribution and/or licensing rights to the company’s suite of patents other than the VuLink;
  3. full sale of the company; and
  4. partial sale of its law enforcement or commercial divisions.

In addition, the company has recently entered into an exclusive distribution agreement with VieVU, LLC regarding the company’s patented VuLink product line.

The company believes the unsolicited inquiries are being driven by the recent and important wins it received in the U.S. Patent Office that confirm the validity of our VuLink and related auto-activation technologies.

Digital’s board and management engaged Roth to ensure that the company and its shareholders consider all reasonable alternatives to maximize shareholder value, given the multiple inquiries.

On July 6, the Patent Office denied Axon’s petition for inter partes review, or IPR, of Digital’s Patent No. 9,253,452. And on August 3, 2017, the Patent Office denied Axon’s final petition for IPR of the ‘452 Patent. This was Axon’s final attempt to invalidate the ‘452 Patent before the Patent Office.

With the Patent Office determining that Axon failed to demonstrate even a reasonable likelihood of invalidating the ‘452 Patent in its IPR petition, an IPR status update was submitted to the District Court of Kansas.

The Court can now decide whether to maintain the stay of the litigation that was implemented pending the results of the IPR petitions. The Company believes that there will be no reason to maintain the stay and, if lifted, it will request an expedited schedule for trial.

On May 27, 2016, Digital filed a complaint against WatchGuard in the U.S. District Court for the District of Kansas alleging patent infringement based on WatchGuard’s VISTA Wifi and 4RE In-Car product lines.

In May 2016, WatchGuard filed an IPR petition with the Patent Office challenging the validity of the ‘950 Patent and filed a motion to stay litigation, pending at least a preliminary decision from the PTAB regarding the IPR petition filed challenging the ‘950 Patent and four additional IPR petitions filed by Axon challenging the ‘292 Patent and the ‘452 Patent. In doing so, WatchGuard agreed to be bound by the Patent Office’s decision in connection with the four IPR petitions filed by Axon against the ‘292 Patent and the ‘452 Patent. A compromise was subsequently reached under which the court stayed the case, and ordered the parties to submit a report by January 5, 2018 notifying the court about the status of the pending IPR petitions.

The Patent Office subsequently denied institution of all of Axon’s IPR petitions against the ‘452 Patent, which means these requests will not proceed.

The Company expects Patent Office to render its decision in the near future regarding whether it will grant institution of WatchGuard’s IPR regarding the ‘950 Patent.

DGLY closed at $1.80.


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FedEx buys 50 planes from Airbus

FedEx Express to buy up to 50 turboprop planes from ATR

FedEx Express to buy up to 50 turboprop planes from ATR. See Stockwinners.com for details

FedEx Express, a subsidiary of FedEx Corp. (FDX), announced that it has completed a purchase agreement with ATR, a joint venture between Airbus (EADSY) and Italy’s Leonardo SpA, that will begin to modernize the company’s fleet of feeder aircraft.

Under the agreement, FedEx Express is making a firm purchase of 30 ATR 72-600F aircraft with options to purchase up to 20 additional ATR 72-600Fs.

Delivery of the first aircraft is expected in 2020, with subsequent deliveries of about six aircraft per year over a five year period.

“The purchase of new, more advanced feeder aircraft like the ATR 72-600F is the next step in our very successful fleet modernization strategy, which has helped us greatly improve our fuel efficiency and fleet reliability in recent years,” said David L. Cunningham, president and CEO, FedEx Express.

“We worked closely with ATR, which developed this new aircraft with special features to help us grow our business, especially in the air freight market where shipments are larger and heavier.” ATR 72-600Fs will have: a forward Large Cargo Door (LCD) and a rear upper-hinged cargo door; digital cockpits; advanced avionics technology and enhanced take-off performance; ADS-B “out” capabilities.

Current FedEx feeder aircraft do not carry containers or palletized freight, so these new features will help the company better serve customers in the air freight market where palletized shipments are the norm.

FedEx currently deploys more than 300 feeder aircraft in 45 countries. Most of these feeder aircraft are owned by FedEx, and are leased and operated by different third-party air carriers under their own operating certificates.

The FedEx feeder fleet is comprised of aircraft under 60,000 pounds maximum gross take-off weight, and allows the company to provide fast, economical service to small and medium-sized markets around the world.

FDX closed at $221.16. EADSY closed at $24.99.


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This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.