>A San Francisco presenter is very bullish on the prospects for Network Equipment Technologies (NASDAQ: NWK, $4.55). This small telecom equipment manufacturer is at the forefront of the shift to the unified communications platform on the enterprise level. The company has over 400 distribution partners, with Microsoft its strongest and most promising relationship. NWK already has 40 large companies on its customer list that are actively deploying UC. The ramp in revenue will come when major enterprises will begin rolling out UC in its branch and remote locations, something Accenture is already doing. Shell has recently announced plans to fully deploy UC. Maintenance and software sales can potentially double revenues from each UC-equipped site. Government entities at various levels are in early stages of UC deployment and will be a great opportunity for NWK over the long-term.

>A Boston presenter spoke at our April forum about the high likelihood of Global Partners (NYSE: GLP, $20.79)acquiring distribution assets from majors. Two days ago the company announced it was buying all of Exxon’s retail sites in Massachusetts, New Hampshire and Rhode Island. The company’s CEO spoke of three reasons behind the purchase: the expansion of GLP’s wholesale gasoline and diesel volume; a substantial new income source; and a higher efficiency in the company’s wholesale supply operations. Globa will finance the purchase by borrowing under a revolving credit line or through a capital raise. The transaction will be completed by the end of the year, and will be accretive to earnings in the first 12 months of operation.

>visit to Graftech

May 20, 2010

>With a large exposure to Mini mills Graftech will benefit more from Chinese and third world expansion than more traditional steel participants. They foresee 3-5 year growth of 10% of industry capacity and in that environment believe they are well positioned in their core business. The tuck in of new Coke acquisition takes away the price increase pressure of the last few years and after studying the industry puts them in a better position to control costs and compete less on price and more on their market leading technology.

Engineered solutions has some interesting opportunities in solar with their Graphite solutions and also in Nuclear with Gen 4 reactors. Depending on future policies these could be long term options.

>A Boston presenter likes Unifi (NYSE: UFI, $4.12) at this level. One of the directors has made a number of purchases at or below the current price in the past two weeks. Management reiterated on the recent conf call the previously given EBITDA guidance for fiscal 2010. Business prospects are looking better with apparel manufacturers seeing consumers making a stronger than anticipated comeback. Growth for this producer of polyester and nylon yarns over the next two years will come from developing regions like South America with the company’s Brazilian operation doing particularly well, and from UFI’S higher value-added Reprieve line based on recycled PET. The presenter notes that if a deposit requirement on water bottles is passed, leading to lower prices for recycled PET, the volume available to Reprieve would increase dramatically.

>Randy Vogenberg, Principal, Institute for Integrated Healthcare, and one of our leading consultants in the healthcare group commented on the pending retirement of CVS Caremark’s CEO Tom Ryan. Randy believes there is high likelihood CVS will sell Caremark and reposition their Minute Clinic operations following the pharmacy giant’s struggles with Caremark’s integration. He notes that historically all Caremark buyers had to sell it at a loss.

In an unrelated observation, Mr. Vogenberg suggests that the debate over the new CMS leader Don Berwick is bound to result in a controversy around for-profit hospitals and other provider systems reliant on Medicare/Medicaid business.

>Our Dallas presenter remains positive on NetScout Systems (NASDAQ: NTCT, $13.08) and China Valves Technology(NASDAQ: CVVT, $9.65). CVVT is being dragged down with the rest of China-based names, and is dirt cheap at these levels. NTCT is also very attractively valed here. The company just had its best quarter ever and raised guidance. Prospects are boosted by tremendous growth in wireless.

>Yesterday we hosted a healthcare roundtable in San Francisco with two insiders to the changes happening in health care reform and benefit management. Since the Obama Plan was pushed thru we have seen a virtual freeze on bidding for new contracts and plans. Nobody seems to be in any hurry to aggressively price for new business while many renewal prices are being bid 20-30 percent and higher on existing plans.

The industry seems to be focused on assessment of the next 6 months until elections, the next 2 years until the next presidential election and the next 4 years until reform really gets put in place. The five major carriers seem to have a window where they will see 20 million lives added to health care coverage, they can increase rates without rate controls and they can potentially then position to even leave the individual coverage business where after 4 years of what could even be a windfall they may feel that when rates are controlled they will exit the individual space all together. A little ironic in its impact it ultimately may move us to the more socialized medicine world after a huge windfall. Could be said to be sarcastic but is the hand dealt.

Seems in the meantime to be a move towards more self funded plans and consumer driven plans like HSA and HRA models. Interesting that in these plans when consumer drives decision scripts spend versus doctor spend increases significantly.

Winners are PBM’s, drug companies and some health tech players. Losers hospitals, doctors and in the long run insurance companies.