Friday, March 5th, 2010
Notable Analyst Upgrades, Downgrades and Comments
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James River Coal Company (NASDAQ:JRCC), Brocade Communications Systems, Inc. (NASDAQ:BRCD), and DragonWave, Inc. (NASDAQ:DRWI) are three notable analyst upgrades, downgrades and comments made during today’s session.
James River Coal Jumps on Industry Takeover
James River Coal Company (JRCC, Free Analysis), a coal producer based in Kentucky and Indiana, saw its shares jump more than 7% after India’s Essar Group sought to acquire U.S. Trinity Coal for $550-600 million. FBR Capital views a non-U.S. strategic player entering the U.S. market, as well as the implied valuation range, as positives for the sector.
Other companies in the sector also moved higher on the news like Patriot Coal Corporation (PCX, Free Analysis) and Massey Energy Company (MEE, Free Analysis). It is uncertain how long the uptrend will remain in play, but many investors are now bullish on the sector given the recent takeover and speculation of further M&A in the industry.
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Brocade is Sharply Undervalued, Says Analyst
Brocade Communications Systems, Inc. (BRCD, Free Analysis), a supplier of data center networking solution that help enterprises connect and manage their information, could be substantially undervalued on a sum-of-parts basis, according to one analyst. In February, shares fell sharply on weak guidance, as several analysts downgraded the firm.
Oppenheimer’s sum-of-parts analysis indicates that the data center company’s storage business alone is worth more than the company’s current market capitalization. As a result, the analyst maintains an Outperform rating on the stock. Other analysts disagree, such as RBC Capital that downgraded shares, but still maintain a price target of $8-8.50.
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DragonWave Jumps on Positive Analyst Comments
DragonWave, Inc. (DRWI, Free Analysis), a broadband wireless backhaul equipment maker, saw its shares jump nearly 5% after at least one analyst expressed confidence in the stock. Morgan Joseph continues to believe that the company is poised to benefit from Clearwire’s (CLWR, Free Analysis) WiMAX network build-out and maintains a Buy rating.
In Febraury, the wireless equipment maker also announced that it signed an OEM agreement with a global mobile equipment manufacturer. The company’s microwave radio system is expected to be included in the end-to-end mobile backhaul solutions in North America and Japan, which has helped lead to increased confidence in the technology.
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-- Written by Simon Monger
