Vitesse: Turnaround Play Positioned for Mext Generation Network Buildout

A New York presenter likes Vitesse prospects following last year's debt resturcturing (OTC: VTSS, $0.43). With the company's financial difficulties largely behind, management was very optimistic discussing VTSS' growth potential on the fiscal Q1 call. Vitesse is the only player in the space offering a full line of products for both Carrier and Enterprise network applications. The company has an impressive customer list, which includes Cisco, HP, IBM, Huawei, Alcatel among others, and is a sole-source supplier for all of the chips it supplies to its largest accounts. The explosion in data traffic and growing network complexity and speed requirements will drive demand for Vitese's products for years to come. A reverse split to get relisted on NASDAQ has been approved by shareholders. The presenter targets at least a double from here based on earnings and peer valuation. New investors may want to take a closer look at the company before it starts going on the road in the next few months.

Somaxon Pharmaceuticals: FDA Approved Sleep Aid Has Great Potential

A New York presenter believes Somaxon's (NASDAQ: SOMX, $7.43) insomnia treatment can achieve blockbuster status. Silenor has just been approved by the FDA in March, with the launch expected in Q3. Limited sleep maintenance properties and residual effects of the leading sleep aids currently on the market leave a large proportion of insomnia patients dissatisfied with the treatment. Somaxon's drug helps maintain sleep for 7-8 hours, is non-addictive, and doesn't trigger a hangover effect. The product's non-controlled status will allow faster penetration of the $2.5 billion market. The company is looking for a partner to help with Silenor commercialization. SOMX is an attractive acquisition target in the presenter's opinion. A 3-year exclusivity period originally given to Silenor may be extended to 10 years of protection.

Air Products: Beat Consensus, on Track to Boost EPS by 20%+ in Fiscal 2010

A New York presenter commented on Air Products' fiscal Q2 results (NYSE: APD, $76.77). APD had an excellent quarter virtually across the board. The company beat the consensus by $0.03 and raised its full year earnings guidance. In APD's take or pay business very few customers are not taking what they've paid for, a great sign going forward. The backlog situation signals consistency of future earnings. Margins are moving up and getting closer to the company's 17% target. Management didn't offer more clarity on the progress of its offer for Airgas, but the presenter expects resolution by early September.

Corning: Dominant Player in Fast-Growing LCD Glass Space

A New York presenter believes Corning (NYSE: GLW, $20.40) doesn't get enough credit for its dominant postion in the LCD glass market. The company commands a 60% share in the space that's projected to grow 14-22% this year. Consumers around the world are both switching from CRT TV's to LCD models and adding new TV sets. The penetration rate in North America is 40% and substantially lower in developing regions, where most of the growth will come from in the coming years. The company has high expectations for its new Gorilla Glass technology. Management predicts incremental sales from this product may reach $1-4 billion in the next 3 years. The technology is very well-suited for touch screen devices and new borderless TV's. It's already used by 17 major brands. The stock is currently trading at 10x forward earnings. The presenter believes that as concerns about the supply/demand picture subside, the multiple should expand to 12-14x. Incremental earnings from Gorilla Glass will be $0.20-0.75/share in his estimation.

Onyx Pharmaceuticals: Lung Data Coming out Mid-Year

Our New York presenter continues to recommend Onyx (NASDAQ: ONXX, $29.14). The company has said that the data from a Phase III trial in lung cancer for its main product Nexavar would come out mid-year. Nexavar has been approved for breast cancer and is being tested in other indications. If the lung data is positive, the stock will go up dramatically, but the downside should the results dissapoint is limited to 5-10%, in the presenter's opinion. He would add to his postion aggressively if the date is negative. The Street is underestimating Nexavar's potential in breast cancer and is not giving enough credit to the drug's prospects in other types of cancer.

Yum Brands: Switching to Hold

A New York presenter still likes Yum! Brands (NYSE: YUM, $43.00), but would wait now before commiting new capital. The stock is up 20%+ since he recommended the name back on March 2 and is now close to the presenter's long-term target. Q1 earnings were quite strong with a big turnaround underway in China. The company is seeing some improvement in its domestic operations, but emerging markets ex-China is where the real upside to the current earnings expectations can come from.

Energy Roundtable in Boston

Last week we hosted an Energy Roundtable that focused on just how fast the natural gas space has been growing. With new discoveries and new methods in particular in shale the consultants focused on how the dynamics are changing affecting world supply, US reliance on foreign production and ultimately long term pricing. Another issue put to rest was the divestiture activity of big oil. Both experts agreed it was not a universal theme but more selective asset sales based more on better focus on returns on investments. Most of the conversation focused on best opportunities to take advantage of the changing landscape.