Look for Mapco to go M&A on us
Posted on November 19, 2009 at 7:27 amEven though he’s trimmed his 2010 estimates and valuation of Delek US Holding, Avondale analyst Dan Mannes says the company’s is ready to build on its track record as a smart M&A player with “a knack for acquiring and turning around undervalued assets.” Mannes has a target of $7 on Delek shares (Ticker: DK), which closed Wednesday after-hours trading at $6.79.
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Advocat still a ’show-me’ story
Posted on November 18, 2009 at 1:22 pm
Some pretty strong words from Avondale Senior Analyst Brian Williams, who is taking over coverage of Brentwood-based nursing home operator Advocat.
We do not believe shares will trade in line with its for-profit peers until Advocat can effectively demonstrate improvement in its organic operations or a willingness to pursue additional sources of earnings growth.
After failing to maintain its recent highs above $8, Advocat shares (Ticker: AVCA) are back near $6, where Williams says they should stay until the company both gets a firmer grip on expenses and finds a way to juice revenue growth, which will likely require acquisitions and outside financing.
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Avondale: Genesco cream of the footwear crop
Posted on November 16, 2009 at 8:22 am
David Turner at Avondale Partners has conducted the channel checks and says athletic clothing sales are lagging big time. But the so-called “black/brown/casual” sector showed third-quarter growth of more than 4 percent, which plays right into the hands of Nashville-based Genesco, Turner’s only outperform-rated stock (Ticker: GCO).
Our street-high Q3′10 (current quarter) EPS estimate of $0.46 is now visible, in our opinion, as is Q4, the company’s highest volume quarter. If our secular thesis is to be believed, more upside remains to GCO’s earnings.
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PureSafety ready to buy
Posted on November 10, 2009 at 2:18 pmWorkforce software provider PureSafety is now working with Avondale Partners in its search for acquisition targets. The Franklin-based company, which employs 100 people locally and moved to Cool Springs earlier this year, made its most recent buy in December 2008, when it acquired Unique Software Solutions.
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CCA’s pipeline strong enough for higher price target
Posted on November 9, 2009 at 7:25 amAvondale Partners analyst Kevin Campbell says Corrections Corp. has the financial muscle, free cash flow and market position to add nicely to its book of business in the coming years. That has led him to raise his price target for the shares (Ticker: CXW) to $30 from $24, based on a 2011 profit estimate that is 15 percent higher than his 2009 forecast.
The company estimates that its inventory and development pipeline can add $50 million in incremental EBITDA over the long-term, with the majority of the interest and D&A expense already included in expectations. We estimate that this could add more than $0.25 in EPS at the current share count. In addition it has financial flexibility in 2009 and 2010 to take advantage of the current environment through continued development, share repurchases or debt reductions.
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Time to be greedy with Psych Solutions
Posted on October 29, 2009 at 12:05 pmAvondale Partners analyst Kevin Campbell says investors should take the opportunity to buy shares of Psychiatric Solutions after their big drop Wednesday. Campbell, who has an ‘outperform’ rating on the shares, says that — despite the Q3 rise in charity care — Psych Solutions’ fundamental story is still compelling.
“[D]emand for its services remains strong and valuations remain at the bottom of its historic range. We recognize that there are valid concerns about increased levels of charity care; however, we believe the issue is manageable.”
Campbell’s lowered target of $28 is almost 50 percent above where the company opened trading this morning. Shares of Psych Solutions (Ticker: PSYS) are up about 3 percent so far today.
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America Service renews Wyoming work
Posted on October 28, 2009 at 7:07 am
Previewing the third-quarter earnings America Service Group will announce this afternoon, Avondale Partners analyst Kevin Campbell notes that the company recently renewed a $20 million contract with the state of Wyoming. As for Q3, the consensus has Brentwood-based America Service (Ticker: ASGR) earning 29 cents per share on revenue of $158 million.
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CCA facing Oklahoma cuts
Posted on October 15, 2009 at 10:39 amOklahoma’s Department of Corrections will trim its budget by 5 percent to help the state manage a shrinking budget. Corrections Corp. of America manages more than 2,000 inmate beds in the state and, all other things being equal, would stand to lose about $2 million in annual revenues.
But Kevin Campbell at Avondale Partners says CCA and competitor GEO Group “will be able to offset these cuts with changes in the scope of services provided or increased inmates.” Shares of the Nashville company (Ticker: CXW) are down about 0.6 percent this morning.
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Analyst: Buy America Service on the dips
Posted on October 5, 2009 at 8:11 amAvondale Partners analyst Kevin Campbell says investors shouldn’t worry about the company’s decision not to try to renew its $18 million-a-year contract with Vermont. There are plenty of other growth avenues out there, he wrote on Friday — including in Arizona and Tennessee, where officials are preparing to hand out contracts totaling more than $100 million.
Campbell has tweaked his EPS estimates and lowered his price target from $20 to $19 to account for the Vermont move, but says investors should take advantage of the shares’ (Ticker: ASGR) recent weakness to jump in or add to their stakes.
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A wrinkle in LifePoint’s M&A strategy
Posted on September 2, 2009 at 10:00 amAlready in the mix for a hospital east of Cincinnati, LifePoint Hospitals also is looking to buy Clinton Memorial Hospital in Wilmington, Ohio, albeit in conjunction with Cincinnati’s Christ Hospital. Even though it’s not clear how the parties might cooperate, Avondale analyst Kemp Dolliver says the alliance heralds a “new wrinkle in the company’s M&A philosophy.” Dolliver estimates the buyer of Clinton Memorial will pay between $70 million and $80 million.
SEE ALSO: Four locals bidding on Ohio hospital
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Genesco positioned to grab market share
Posted on August 28, 2009 at 10:57 amAfter Genesco’s well-received Q2 earnings, Avondale analyst David Turner says the Nashville-based shoe and hat retailer has several good things going for it.
Multiple cost items, including occupancy which accounts for roughly one-third of GCO’s cost structure, are subtly moving in the company’s favor… Genesco’s dynamic revenue model (dominant concepts focusing on lucrative demographics, supported by a strong vendor base) paves the way for the company to continue to carve out market share gains.
Shares of Genesco (Ticker: GCO), which Turner rates ‘market outperform,’ are taking a small breather after their big day yesterday.
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Avondale trims Genesco estimates on soft back-to-school season
Posted on August 26, 2009 at 3:16 pm
Ahead of Genesco’s second-quarter earnings report tomorrow, David Turner at Nashville-based Avondale Partners today cut his profit estimates for the period by four cents, citing weaker-than-expected sales at the company’s Journeys and Hat World divisions. Going forward, Turner also trimmed his Q3 number, “reflecting what we believe is generally a weak start to back-to-school, with the caveat that major markets such as Texas and Florida have started the season later this year.”
But on the whole, Turner isn’t worried about Genesco’s prospects. He has maintained his ‘market outperform’ rating and $29 price target and doesn’t see management cutting its full-year guidance tomorrow. Shares of Genesco (Ticker: GCO) rose more than 3 percent today and are up about 23 percent so far this year.
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Avondale adds another high-end analyst in Beantown
Posted on June 8, 2009 at 9:38 amWell-known analyst Kemp Dolliver has joined the Avondale team. Dolliver, who will serve as a senior research analyst and managing director covering health care services, joins the firm from Cowen & Co.
Dolliver brings more than 20 years of sell- and buy-side experience to his position. The Wall Street Journal has recognized him four times in its Best on the Street survey for stock-picking, including the most recent edition released last month. He has built a long track record of unique insights, including forecasting consolidation between pharmacy benefit managers (PBMs) and retail drug stores.
Dolliver joins Avondale from Cowen and Company, based in Boston, where he was senior analyst and managing director responsible for the healthcare providers sector. Prior to Cowen, he was at TradeStreet Investment Associates, part of NationsBank Corp. He joined NationsBank from Aetna Life & Casualty Company, where he was a securities analyst for six years. He also was an investment banker for Dean Witter Reynolds Inc., specializing in mergers and acquisitions.
Late last month, Avondale’s Boston office added another senior research analyst.
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Avondale adds retail specialist
Posted on May 27, 2009 at 11:05 pmThe details on the firm’s new hire in Beantown:
Avondale Partners, a national investment banking firm headquartered in Nashville, today announced that Bret D. Jordan has joined the firm as a senior research analyst covering the specialty retail and consumer products sectors. He will work from the firm’s Boston office.
Jordan brings more than 20 years of experience to his position. He joins Avondale from Delta Partners LLC, a fundamentally focused small and mid cap equity hedge fund based in Boston, where was senior analyst/vice president responsible for the global consumer products sector. Prior to Delta, he served as managing director and senior analyst covering specialty retail and consumer products for Advest, Inc. Early in his career, he covered restaurants and specialty foods for John Hancock/Tucker Anthony’s institutional research effort and spent four years with The Boston Company Institutional Investors.
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Avondale adds analyst in Baltimore
Posted on February 26, 2009 at 2:29 pm
The Nashville investment bank has recruited apparel and specialty retail analyst David Turner to its Baltimore office. He comes to the firm from BB&T, where he covered Genesco along with Urban Outfitters, Pacific Sun and watch maker Fossil, among others.
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