Ascendere Associates LLC September 20, 2010J. Stephen Castellano Page 1 steve@ascenderellc.comAscendere Associates LLCwww.ascenderellc.com J. Stephen Castellanosteve@ascenderellc.com
Stock Highlight: September 20, 2010
This is a beta product produced by Ascendere Associates LLC ("Ascendere") in which we briefly explore stocks that have caught our attention.
Netezza Corporation (NYSE:NZ, $28.27)
Netezza rose 14.9% to $28.27 following IBM's announcement it intends to purchase the company for $1.7b in order to help grow its analytics businesses; this Associated Press
article provides more details. The company ranks poorly on our relative value on all metrics except Operating Momentum, which seems likely to continue. Trailing 12-monthEBITDA was $10.9m as of January 2010, moving to and $19.5m as of July 2010, with implied consensus forecasts for $27m-$32m as of January 2011. The stock is now trading atmore than 115x and 67x consensus EPS of $0.25 and $0.42 for this calendar year and next. This coupled with low analyst revisions momentum, a stock like this is not going to bepicked up by many quantitative systems.
Ascendere Associates LLC September 20, 2010J. Stephen Castellano Page 2 steve@ascenderellc.com
There are 145 stocks with market caps below $2.5b that show better operating momentum trends than Netezza. While we did not find any other attractive stocks in theComputer Storage and Peripherals industry, more broadly there are 27 stocks in the Technology Sector that show better operating momentum, including the following:
Ascendere Associates LLC September 20, 2010J. Stephen Castellano Page 3 steve@ascenderellc.com
Of these 27, 5 of them show very attractive rankings for Relative Value, Analyst Revisions Momentum and Fundamental Quality.
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Five Technology Stocks Under $2.5b Look Better Than Netezza
Netezza (NZ) moved up 14.9% today on news that IBM intends to acquire it. 27 tech companies with market caps under $2.5b show better operating momentum trends than NZ, and 5 of them look particularly attractive.
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