KVH Industries: Recurring Revenues on Verge of Ramping Up

A New York presenter likes KVH Industries' prospects (NASDAQ: KVHI, $14.26). This provider of mobile communication services for commercial ships worldwide has completed an initial buildout of its marine global network and is now able to deliver internet and mobile services for the vast majority of shipping routes. KVHI has the most compact and the easiest to install system in the space. Recurring airtime revenues are the best part of the story. KVH's system has been installed on 1,000 ships so far, but the total market opportunity is 130,000 ships. At $2,000/month/unit, incremental earnings from airtime charges can add up very quickly. A recent new contract with Coast Guard underscores the advantages of KVH's offering and boosts the company's credibility.

Nordion: Resumption in Isotope Supply and New Sources Boost Prospects

A New York presenter recommends Nordion (NYSE: NDE, $11.64) as a buy. This provider of medical isotopes, targeted therapies, and sterilization technologies has seen its share of the isotope market fall drastically, due to interruptions in supply from the NRU reactor in Canada. In August, the reactor resumed operation after a prolonged shutdown. NDZ has also reached an agreement with a Russian-based producer to diversify its sources. Sales in the company's two other segments have been expanding at a rapid pace. Nordion has just announced a $0.40 dividend and a very sizable stock buyback. Resolution of the arbitration with the Canadian government expected in 2H 2011 can be a significant catalyst.

Roulston Retail Chair Discussing Retail in Media

Craig Johnson, President, Customer Growth Partners and Chair of Roulston Research Retail Group, has recently been quoted in various media outlets, discussing the outlook for some individual companies in the retail space. Please use the links below to hear his thoughts.

http://www.chainstoreage.com/article/reinvented-department-stores-and-malls-see-robust-rebound

http://www.bloomberg.com/news/2011-02-09/johnson-discusses-increase-in-shopping-mall-spending-audio.html

http://www.usatoday.com/money/industries/retail/2011-02-12-walmart-comeback_N.htm

http://retailtrafficmag.com/charts/dept_stores_resilience_02152011/#

Palomar Medical: Entering Direct to Consumer Market

A New York presenter is bullish on Palomar Medical Technologies' prospects (NASDAQ: PMTI, $16.16). The company is seeing encouraging signs in its core business of selling skin treatment products and systems to medical practioners, but the attraction of the story is PMTI's recent entrance into direct to consumer skin rejuvenation space. The company's PaloVia wrinkle-reducing product started selling on QVC two months ago, and the initial results have exceeded internal expectations. Management sees the product going mainstream in the not so distant future, based on its cost, efficacy and relative ease of application. Potential upside in the $16 billion domestic skin beauty market is very significant. Depending on the number of treatments sold, incremental earnings from PaloVia can reach $1-2/share.

Rock-Tenn: Smurfit Acquisition Strengthens Position

Rock Tenn(NYSE: RKT, $70.68) is another name from Roulston Research's recent New York idea forum. The Smurfit-Stone acquisition announced last month vaults the company to the #2 position in the growing containerboard space. RKT's CEO is well-known for making successful transformative acqusitions and this latest deal could be his best. The company has historically inderpromised and overdelivered on projected synergies from acquisitions. The presenter believes this trend will be maintained here as well. Consolidation in the space has been the driver for high utilization rates and increasing pricing power. Another price increase is likely in the early spring. Should one transpire, RKT will be on course to generate $13/share in fully taxed cash flow. Based on a conservative 9 times multiple, the upside from here is close to 70%, or 30% with no price increase.

AB InBev: 30% Upside Based on Cash Flow

A New York presenter likes AB InBev (NYSE: BUD, $56.04) at this level. The largest global brewer is set to add $1 billion+ in cost synergies, following the 2008 merger, to the original target. Leverage reduction targets will be met 2 years ahead of plan, triggering a change in leadership incentive dynamics from debt paydown from the deal to share appreciation. The Street is misreading a recent slowdown in Brazil as indicative of future problems in the country, but the presenter disagrees. The comp growth in this all-important market for the company is set to resume shortly as competitors implement their price hikes to match BUD. Based on the presenter's FCF estimates, the upside from her ecould reach 30%. A substantial dividend increase as well as stock buybacks are strong possibilities.

First Solar: Significant Downside Potential

A NY-base presenter recommends a short on First Solar (NASDAQ: FSLR, $157.69). He argues that the company is no longer the low cost producer in the fiercely competitive solar space. Gains in the efficiency of its modules have been decelerating and FSLR's cost advantage may no longer be there. With supply likely to substantially exceed demand this year, First Solar may be the only manufacturer left unable to price its product competitively. Cuts in government subsidies for solar across Europe, and particularly in the two largest markets Germany and Italy, are another major threat to the company's profitability.