DIRECTVIEW HOLDING COM USD0.001 (OTCMKTS:DIRV) Makes Two Acquisitions

DIRECTVIEW HOLDING COM USD0.001 (OTCMKTS:DIRV)

DIRECTVIEW HOLDING COM USD0.001 (OTCMKTS:DIRV) is a security technology company based in Boca Raton, FL. The company began operations in 1995 and provides security solutions to the residential, commercial, and industrial sectors. Some of its better-known clients include AT&T, Coca-Cola, Marriott Corporation, The New York Police Department, Waste Management, and Sprint. Interestingly, they also claim expertise in security solutions for one of the nation’s fastest growing industries – legalized cannabis.

Today DIRECTVIEW HOLDING COM USD0.001 (OTCMKTS:DIRV) announced the acquisition of two privately held security and surveillance companies located in Texas. Video Surveillance, LLC and Apex CCTV, LLC have combined revenues of approximately $5.3 million. The terms of the purchases included a cash payment, due six months from today, of $1.9 million. Upon the successful completion of a two year audit of the two acquired companies in accordance with U.S. GAAP accounting standards for FY2016 and FY2015; DirectView will pay an additional amount ranging from $2,000 up to $500,000. The actual amount will be based on the positive average annual cash flow achieved in those two years. DIRECTVIEW HOLDING COM USD0.001 (OTCMKTS:DIRV) intends to pursue financing arrangements for the payments. As part of the agreement, Mark Harris, a 25-year securities technology professional, will enter into a binding three-year employment contract and serve as president of the two firms. Roger Ralston, CEO and Chairman of DIRECTVIEW HOLDING COM USD0.001 (OTCMKTS:DIRV), stated, “The acquisition of these companies is a very exciting transformational event for DirectView as we position for current and future growth. Mr. Harris has built two businesses that in less than three years, are generating substantial revenue and, more importantly, positive cash flow. He also has a wealth of technology management experience that will be invaluable for DirectView as we execute our strategic growth plan.”

As a result of a smaller sales force, DIRECTVIEW HOLDING COM USD0.001 (OTCMKTS:DIRV) experienced a sales drop of 48% in 2016 when compared to 2015. That sales loss was also reflected by a decrease of 62% in the cost of product from 2015 to 2016.

It is encouraging that the company has taken steps to broaden its footprint and expand its product offering. Direct View’s own SEC filing expressed the possibility that the company may not continue to function as a going concern. “The Company will require additional funding to finance the growth of its current and expected future operations as well as to achieve its strategic objectives. The

Company  believes  its  current  available  cash  along  with  anticipated  revenues  may  be  insufficient  to  meet  its  cash  needs  for  the  near  future.  There  can  be  no

assurance that financing will be available in amounts or terms acceptable to the Company, if at all.” Investors should keep themselves attentive to developments.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Marc has a degree in economics and a MSc. in Finance. Over his 20-year career, Marc has worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.

APHRIA INC COM NPV (OTCMKTS:APHQF) Continues Moving Forward

APHRIA INC COM NPV (OTCMKTS:APHQF)

APHRIA INC COM NPV (OTCMKTS:APHQF) is a Canadian-based Health Canada Licensed producer of medical cannabis products that exclusively grow their pesticide-free plants in greenhouses. Shares of the company are also listed on the Toronto Stock Exchange under the ticker symbol APH. Aphria believes this approach delivers a product that is more consistent, safe, and effective. In addition, Aphria provides personnel to assist consumers in their Patient Care Team.

APHRIA INC COM NPV (OTCMKTS:APHQF) boasts on their website that the patient care was given a #1 ranking for 2016. The company does make purchasing easy. They have an online registration process and offer free next-day delivery on orders of 30 grams or more. However orders shipped outside of Ontario may take longer. This ease of use extends to healthcare professionals as well. After the patient registers, the healthcare provider competes the required medical document which will include dosage information. At that point Aphria’s Patient Care Team contacts the patient within 48 hours and the patient may place an order over the phone or online.

APHRIA INC COM NPV (OTCMKTS:APHQF) offers over 18 cannabis related products and provides the THC and CBD level of each on their website. They also have a high-quality cannabis oil product that is extracted using CO2 extraction which they claim helps preserve the purity and safety profile.

APHRIA INC COM NPV (OTCMKTS:APHQF) is Canada’s first licensed medical cannabis producer to report positive cashflows and earnings in consecutive quarters. That claim helped them decide to raise over $100 million in a deal that was announced last week. $75 million will be in the form of a public offering and $25 million will be debt financing with a five-year term. The equity portion of the deal is “bought” which means that the underwriters are guaranteeing the equity capital raise. Clarus Securities is acting as the underwriter. The deal will comprise of 11,538,480 shares at $6.50 per share of APHRIA INC COM NPV (OTCMKTS:APHQF) . Importantly, the equity offering is not registered in the USA and shares will not be available to U.S. investors. Proceeds from the equity offering and the new debt will be used to complete the final stage of the company’s four-part expansion plan.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Marc has a degree in economics and a MSc. in Finance. Over his 20-year career, Marc has worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.

Terra Tech Corp (OTCMKTS:TRTC) Makes Their Case

Terra Tech Corp (OTCMKTS:TRTC)

Terra Tech Corp (OTCMKTS:TRTC) utilizes multiple subsidiaries to grow its vertically integrated cannabis-focused company. Terra Tech controls the product from the growth of the plants, through processing, and placing it on the store shelves – sometimes even the store is a subsidiary operation. Today volumes are very heavy for TRTC shares. The 30-day average daily volume for TRTC shares is over 3.2 million but today over 5.7 million shares have traded before 1 PM EST. The shares are, for today, also represented amongst the top number of trades on the OTCQX platform.

Terra Tech Corp (OTCMKTS:TRTC) subsidiary’s include Blüm, IVXX Inc., Edible Garden, MediFarm LLC, and GrowOp Technology. Blüm provides medical cannabis oriented products for alternative medical treatments. They provide their products through their Oakland, CA store and multiple Nevada locations. In California, IVXX, Inc. provides regulated cannabis offerings through medical cannabis dispensaries. Edible Garden is a wholly owned subsidiary that grows and harvests sustainable, hydroponically grown produce and sells it through such mainstream stores such as WalMart, Krogers, and Meijer. MediFarm LLC is focused on medical cannabis permitting and cultivation in the state of Nevada. GRowOp Technology is a cutting-edge company developing controlled environment agricultural technologies with applications across many industries.

For investors wishing to expose a portion of their portfolio to the growing cannabis-related industry, it would be difficult to not include Terra Tech Corp (OTCMKTS:TRTC) as a possible investment. For FY2015, Terra Tech had revenues of almost $10 million. By the end of FY2016, those revenues grew to over $25.3 million. From FY 2015 to FY2016, gross profit more than doubled. The net loss for FY 2015 was over $9.3 million and that grew to a net loss of $26.9 million in FY2016. The net loss attributable to shareholders in FY2015 was (-$0.04) and that figure expanded to (-$0.07) for FY2016. Terra Tech Corp (OTCMKTS:TRTC) lists Total Assets at $76.178 million – up from just $9.16 million in FY2015. However Total Liabilities grew from $2.8 million in FY2015 to over $24 million in FY2016. That gives stockholders an equity figure of over $52 million.

Probably the most positive aspects concerning any investment in Terra Tech Corp (OTCMKTS:TRTC) is that they are experiencing revenues and have established distribution. That in addition to their fairly transparent financial statements make this a cannabis-related stock that has quite a few positives in a crowded field that is screaming for investor attention.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Marc has a degree in economics and a MSc. in Finance. Over his 20-year career, Marc has worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.

Cannabis Science Inc (OTCMKTS:CBIS) Presenting at Harvard Medical School Summit

Cannabis Science Inc (OTCMKTS:CBIS)

Investors wishing to diversify their equity portfolio in to the hottest sector of the current market, cannabis and cannabis-related products and services, may wish to consider Cannabis Science Inc (OTCMKTS:CBIS). The company was founded in 1996 so it has a long management and financial history to reflect on – unlike some other offerings that have just recently hit the market.

Cannabis Science Inc (OTCMKTS:CBIS) seeks to develop cannabinoid-based medicines and pursue FDA clinical approval – possibly under the Orphan Drug Act. To accomplish this, Cannabis Science Inc (OTCMKTS:CBIS) has recently made moves to expand their scientific advisor board in anticipation of overcoming the hurdles that accompany the FDA drug-approval process. The Irvine, CA-based company has three drugs under development – CS-STAI-1, CS-S/BCC-1, and a proprietary therapy for neurological conditions that reportedly received a patent in 2013. Cannabis Science Inc (OTCMKTS:CBIS) is intending these drugs for use against cancer, autism, influenza, PTSD, as well as other conditions or diseases. It is unknow where the company will pursue drug approval through the USA or through its wholly owned subsidiary in Haarlem, The Netherlands.

Most recently, Cannabis Science Inc (OTCMKTS:CBIS) moved to upgrade its balance sheet and generate needed revenues by seeking to acquire two medical marijuana dispensaries in Los Angeles, CA. The move accompanied an announcement that the seeding of 350 acres of land will commence in May of 2017. Raymond Dabney, Founder and CEO, believes this move will enable Cannabis Science Inc (OTCMKTS:CBIS) to build out its vertical supply chain and lower expenses while improving the time to market for the company’s products.

This week, Mr. Dabney and Dr. Herman, Chief Science Officer, will be presenting at the Global Health Catalyst (GHC) summit at the prestigious Harvard Medical School. The GHC summit is billed as a unique opportunity for participants to source potential collaborators with an aim to eliminating global health disparities with a particular focus in the fields of cancer and related diseases. The Cannabis Science Versus Cancer and Other Malignancies and the Palliative Care and Mental Health Sessions will be live-streamed to an audience worldwide. Those interested in joining the live-streaming of these sessions, as well as any of the other GHC Summit sessions, can subscribe to the Next Generation Global Health Security Network YouTube Channel at https://www.youtube.com/channel/UCqihIfrETTl2eRMxNQxUCDQ. Additionally, the recorded sessions can be accessed via this YouTube channel.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading.

Kush Bottles Inc (OTCMKTS:KSHB) Poised to Grow Like a Weed?

Kush Bottles Inc (OTCMKTS:KSHB)

Investors who missed out on the internet explosion may wish to consider an industry that is experiencing similar growth and, due to proposed federal de-regulation, could continue its massive growth rates. The industry? Legalized marijuana. The North American legalized marijuana market grew by 30% in 2016 to record revenues of $6.7 billion. Kush Bottles Inc (OTCMKTS:KSHB) has participated in that growth without touching a single plant and is poised to continue eye-popping returns.

Consider the Q2 2017 financial results released by Kush Bottles Inc (OTCMKTS:KSHB) on April 12, 2017. Revenues were $3 million – up 65% YoY. On August 31, 2016 Kush reported a cash balance of $1 million and that number jumped to $2.8 million. Working capital nearly doubled from $2.03 million to $4.6 million.

Kush Bottles Inc (OTCMKTS:KSHB) supplies the legal marijuana industry with packaging and products to processors and retailers in the USA and Canada. Since its founding in 2010, Kush has sold over 100 million products, and 3,000 customers, in the B2B space of the sector. Their core clients are legally operated medical and adult-use dispensaries, as well as marijuana growers and marijuana-infused product manufacturers. 

The branding of Kush Bottles Inc (OTCMKTS:KSHB) cannot be underestimated. Arcview, a market research firm that has been following the legal marijuana market since 2013, estimates that over 40% of all marijuana product sales involved recognized brands. Industry observers often compare the emerging industry with the beer industry of the early and mid-20th century when beer sales were dominated regionally by select brewers. As the market developed, those brewers were bought or squeezed out and the better branded brewers came to dominate the market. Helping set the stage for such an eventuality in the legalized marijuana market is proposed federal legislation seeking to de-criminalize marijuana. That effort has been ongoing but is also, undoubtedly, becoming more mainstream with each passing year. Every election cycle seems to witness another state’s voters giving the greenlight to legal marijuana usage. And Kush Bottles Inc (OTCMKTS:KSHB) share price seems to receive a lot of attention when that happens.

But it not only KSHB’s share price that receives a lot of attention. The burgeoning industry has received millions of dollars in free PR through the coverage of the mainstream media. Kush Bottles Inc (OTCMKTS:KSHB) has been featured on CNBC, the Los Angeles Times, TheStreet.com, and Entrepreneur and Inc. magazines.

Kush Bottles Inc (OTCMKTS:KSHB) has a 52-week high of $5.00 and a 52-week low of $0.90. Currently it is trading in the $2.50 – $2.60 range. But will momentum for legislation removing marijuana production and use from federal criminal codes continue? If so, it is easy to see that Kush Bottles Inc (OTCMKTS:KSHB) could become one of the better branded, and sought after, companies in the industry.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading.

VirnetX Holding Corp (NYSE:VHC) Beating Back the Shorts

VirnetX Holding Corp (NYSE:VHC)

VirnetX Holding Corp (NYSE:VHC) shares opened at $2.40 – the same price as where they closed on Tuesday. However, within 30 minutes VHC shares shot up to $2.80 before retreating then hitting the $2.80 price once again and closing at $2.75 for a daily gain of 14.5%. Volumes were seven times normal. Average daily volume for the shares is listed at 213,800 but today almost 1.5 million shares traded.

VirnetX Holding Corp (NYSE:VHC) develops software and technology for secure communications. VirnetX features a secure domain name registry and proprietary connection technology branded as “Gabriel Connection Technology”. The firm’s technology is designed to enable secure real-time communications between consumers using instant messaging, VOIP, smart phones, eReaders, and video conference attendees. VirnetX owns over 112 U.S. patents and has 75 additional patent applications pending.

In 2015 VirnetX Holding Corp (NYSE:VHC) reported revenues of $1.56 million. That number fell slightly to $1.55 million in 2016. However the Cost of Goods sold plummeted from $5.27 million in 2015 to $884,000 in 2016. Accordingly, gross income was -$3.71 million in 2015 but improved markedly to $666,000 in 2016.

EBITDA for VirnetX Holding Corp (NYSE:VHC) was -$28.48 million in 2016 which was an improvement over the -$29.15 million loss in 2015. Share dilution has been minimal. In 2012 VirnetX had 50.93 million shares outstanding and that number increased to just 55.98 million by 2016. The diluted EPS has been rather consistent as well even if at a loss. For four of the past five years the diluted EPS loss has been between -$0.51 and -$0.56. The single outlier was 2014 when VHC shares had an EPS loss of only -$0.19.

Only one firm follows VirnetX Holding Corp (NYSE:VHC) and they rate VHC shares as a “Strong Buy”. However the percent of outstanding shares that represent short-sellers is at 21.78% which, given the thin liquidity, computes to short ratio of 51.84 – a large number by any measure.

4/19/2017
Ticker Symbol VHC
Last Price a/o 4:00 PM EST  $                      2.75
Average Volume                    213,880
Market Cap (mlns)  $                  139.54
Sales (mlns)  $                      1.60
Shares Outstanding (mlns) 58.14
Share Float (mlns) 50.90
Shortable Yes
Optionable Yes
Inside Ownership 13.30%
Short Float 21.78%
Short Interest Ratio 51.84
Quarterly Return -2.04%
YTD Return 9.09%
Year Return -46.07%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Marc has a degree in economics and a MSc. in Finance. Over his 20-year career, Marc has worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.

Applied Optoelectronics Inc. (NASDAQ:AAOI) Pops on Preliminary Q1 Results

Applied Optoelectronics Inc. (NASDAQ:AAOI)

Sugarland, TX-based Applied Optoelectronics Inc. (NASDAQ:AAOI) released a preliminary, unaudited Q1 2017 financials that soundly beat guidance. AAOI shares closed at $40.82 yesterday and hit a high of $51.30 in Thursday’s pre-market – a 25.6% gain. However, AAOI shares opened Thursday’s regular session at $49.85. Volumes are higher than normal. By 10AM EST over 3.25 million shares of AAOI have traded hands. AAOI has an average daily volume figure of just 1.4 million. AAOI shares had hit resistance in late-March around the $60 level and slid to barely above $40 yesterday before the positive earnings release popped the share price.

Dr. Thompson Lin, Founder, President and CEO of Applied Optoelectronics Inc. (NASDAQ:AAOI), attributed the financial results upside surprise to greater than anticipated demand for the company’s datacenter offerings. Datacenters typically layer servers in rows with racks stacked on top of each other. A switch connects the server and the rack – and rack switches connect to each other and ultimately a network. The physical connectivity for digital transfer has traditionally been done with copper wire but the trend, which Applied Optoelectronics is capturing, is to move to high-capacity optical networking technologies.

Applied Optoelectronics Inc. (NASDAQ:AAOI) is now projecting $96.2 million in revenues for Q1 2017 compared to previous guidance of $87 – $91 million. GAAP/non-GAAP gross margin is forecast between 42.5% and 42.9% – previous guidance was 38%-40%. GAAP net income will come in between $18 and $18.4 million. Non-GAAP net income (after taxes) will be $19.7 – $20.2 million – well above the guidance of $15.5 to $17.2 million. Q1 2017 GAAP EPS (diluted) for Applied Optoelectronics Inc. (NASDAQ:AAOI) will be between $0.91 and $0.94. As with all preliminary, unaudited figures, investors should keep in mind that the figures are subject to change as the company performs its quarterly reviews and financial close.

Applied Optoelectronics Inc. (NASDAQ:AAOI) has had YoY increases in their sales figures since 2012 when they posted a figure of $63.4 million. By 2016 they posted a sales figure of 260.7 million. Their EPS reflects the same trend. In 2013, the company lost -$0.13 EPS but by 2016 they reported an EPS profit of $1.82. Six firms, including Piper Jaffray and Raymond James, follow Applied Optoelectronics Inc. (NASDAQ:AAOI). Five rate AAOI shares as a “Strong Buy” and one analyst rates the shares as a “Hold”. Their consensus price target is $59. YTD AAOI shares are up over 75% but are still well below their 52-week high of $60.19.

4/13/2017
Ticker Symbol AAOI
Last Price a/o 10:02 AM EST  $                    47.67
Average Volume                    140,000
Market Cap (mlns)  $                  790.28
Sales (mlns) $260.70
Shares Outstanding (mlns) 19.36
Share Float (mlns) 17.65
Shortable Yes
Optionable Yes
Inside Ownership 3.90%
Short Float 16.27%
Short Interest Ratio 2.06
Quarterly Return 79.67%
YTD Return 74.15%
Year Return

154.49%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Marc has a degree in economics and a MSc. in Finance. Over his 20-year career, Marc has worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.

Sito Mobile Ltd. (NASDAQ:SITO) Gets Big Numbers Today

Sito Mobile Ltd. (NASDAQ:SITO)

Shares of Sito Mobile Ltd. (NASDAQ:SITO) experienced some abnormal price swings today when considering the stock’s existing Average True Range (ATR). A stock’s Average True Range is meant to provide a quantitative measurement of the stock’s volatility. It is normally calculated using a smoothed moving average of a stock’s high, low, and close over the previous 14 days. SITO shares had an ATR of $0.22 or less than 10% of their $2.11 closing price from Friday. Today SITO shares closed up almost 50% and the difference between the stock’s high ($3.35) and low ($2.06) was $1.29 – over five times the range that SITO shares started the day with. Heavy volumes accompanied the price gain. The average daily volume for Sito Mobile Ltd. (NASDAQ:SITO) shares is 141,390 but over 1 million shares traded hands today – over seven times the daily average.

SITO Mobile, Ltd. (NASDAQ:SITO) serves as a mobile location-based advertising platform for businesses, advertisers, and brands in the USA and Canada. The company provides mobile location-based advertising and mobile messaging platforms to transform digital marketing by delivering targeted mobile advertising campaigns based on geo-location, in-store traffic, and customer response for brands, agencies, and retailers.

Sito Mobile Ltd. (NASDAQ:SITO) sales have been trending upwards and almost doubled from 2015 to 2016. In 2012 sales were reported at $6.3 million. That was followed by a figure of $7.8 million, then $9.9 million, and $15.8 million for 2015 then $29.4 million for 2016. Similarly, EPS losses have been narrowing YoY since 2013. For 2013 there was an EPS loss of -$0.39, then for 2014 the loss narrowed to -$0.31, then narrowed again to -$0.29, and in 2016 the loss again narrowed to -$0.17.

Five firms follow Sito Mobile Ltd. (NASDAQ:SITO). Four of them rate SITO shares as a “Strong Buy” and one rates the shares as a “Hold”. Their consensus price target is $4.50.

Interested investors should be aware that a lawsuit has been filed on behalf of all those who purchased Sito common stock between February 9, 2016, and January 2, 2017. The lawsuit alleges that Sito Mobile Ltd. (NASDAQ:SITO) failed to appropriately notify shareholders that media placement revenues would be impacted by federal election spending or lack thereof.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Marc has a degree in economics and a MSc. in Finance. Over his 20-year career, Marc has worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.

Cinedigm Corp. (NASDAQ:CIDM) Expands Digital Market Footprint

Cinedigm Corp. (NASDAQ:CIDM)

Cinedigm Corp. (NASDAQ:CIDM) is one of the country’s leading distributors of media content. Cinedigm has distribution agreements with retail and digital storefronts such as WalMart, Target, iTunes, and Amazon. The company has a large library that holds over 52,000 films and TV episodes. Today the company announced that they will begin supporting Google’s Chromecast and Android TV platforms as well as Amazon Fire TV. The market responded to the news by sending CIDM shares up over 15% on heavy volume.

Initially the expansion will hit Google’s Chromecast – on April 21st. In June Amazon Fire will begin to receive the new service, followed by Android TV in July. Experts estimate that this expansion will add an additional 60 million devices to the available footprint for Cinedigm Corp. (NASDAQ:CIDM).

Despite its massive available footprint, Cinedigm Corp. (NASDAQ:CIDM) remains a nano-cap stock with around $15 million in market-cap on $94 million in sales. Its 52-week low is $0.90 and its 52-week high is $2.70. CIDM shares do not experience a lot of volatility. The Average True Range for CIDM shares is just $0.10. At the moment, CIDM shares are trading close to their cash/share value of $1.53.

Still, Cinedigm Corp. (NASDAQ:CIDM) is positioned well. The worldwide market it operates in is expected to grow to $65 billion from its current level of around $15 billion. Cinedigm had subscriber revenues of $only $300,000 in 2016 but expects that number to jump to $2 million for 2017. What is unknown is what it costs the company to acquire a new subscriber or retain an existing one. How they are able to execute their acquisition/retention strategy will be key to their future success.

3/31/2017
Ticker Symbol CIDM
Last Price a/o 10:13 AM EST  $                      1.52
Average Volume                    281,650
Market Cap (mlns)  $                    14.91
Sales (mlns) $94.00
Shares Outstanding (mlns) 10.96
Share Float (mlns) 8.31
Shortable Yes
Optionable No
Inside Ownership 19.10%
Short Float 7.04%
Short Interest Ratio 2.08
Quarterly Return -2.86%
YTD Return -5.56%
Year Return -35.24%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Marc has a degree in economics and a MSc. in Finance. Over his 20-year career, Marc has worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.

Extreme Networks, Inc (NASDAQ:EXTR) Buys Another Data-Center and Shares Rise

Extreme Networks, Inc (NASDAQ:EXTR)

Extreme Networks, Inc (NASDAQ:EXTR) bought Avaya networks in early March. Yesterday evening the company announced it is buying Brocade’s (BRCD) data-center networking business. Brocade’s shares are little changed – up less than 0.5%. However, shares of EXTR are up over 15% in mid-morning trading. EXTR shares ended the regular session yesterday at $6.46 and gapped up to open at $7.90 before hitting their inter-day high of $8.11. Volumes are trading at over 14 times their daily average.

San Jose, CA-based Extreme Networks, Inc. (NASD:EXTR) develops and manufactures wired and wireless network infrastructure equipment. It also develops software for network management, policy, analytics, security, and access controls. It also offers its proprietary ExtremeAnalytics – an analytics application that assists users in optimizing network performance. The company boasts 20,000 customers worldwide.

Following the news of the buyout, two firms reiterated their analyst’s ratings for Extreme Networks, Inc. (NASD:EXTR). DA Davidson reiterated their “Buy” rating with a price target increase from $7.50 to $10. Needham reiterated EXTR shares as a “Buy” and moved their target price from $7.00 to $9.50. It should be recognized that three other analysts rated EXTR shares as a “Strong Buy” prior to yesterday’s announcement.

Today’s price action resulted in EXTR shares nearly reaching their all-time highs. In January of 2014, EXTR shares hit $8.14 – $.03 higher than today’s inter-day high. But Extreme Networks, Inc. (NASD:EXTR) has been performing well. EXTR shares are up over 28% YTD, and up over 108% for the past year.

EXTR shares have a Relative Strength score of 76.53 which is encroaching on “over-bought” territory. Annual sales for the company in 2014 were $519.6 million. That figure was followed by sales of $552.9 million in 2015 and $528.4 million in 2016. Shareholder earnings have been negative. EPS for EXTR shares in 2014 were a loss of -$0.60, then in 2015 there was an EPS loss of-$0.72, followed in 2016 by a loss of -$0.31. Dilutive effects have been less bothersome. In 2014 there were 85.52 million shares outstanding and that number marginally increased to 103.07 by 2016.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading.