November 24, 2010

>with the Linc launch by Microsoft it is becoming clear that unified communications is now on the map and necessary for multi international business. Network’s technology has progressed in encryption and securitization and few new entrants to the UX Technology space can now be used for the MSN and HP models. Example Royal Dutch who has 753 offices is now adding NWK equipment into 106 sites with 2 UX’s at eachsight at 30k per unit. This product cuts tech expenses by not replacing legacy equipment but allowing software to connect hardware in an open software at 1/10 the cost. As we migrate to the Internet for communications look at unified communications to be a focal point.

>A New York presenter continues to like Celanese (NYSE: CE, $36.38). Q3 earnings have exceeded his initial estimates. Consequently, he is raising his projections by about 10%. The presenter is positive about the company’s prospects and sees continued growth going forward.

>A San Francisco presenter is very confident Network Equipment Technologies is entering a significant growth phase (NASDAQ: NWK, $4.36). Some of the largest global companies have already been deploying Network’s unified communications (UC) boxes, but the launch of Lync by Microsoft, NWK’s partner in UC, this week will accelerate deployments at clients’ regional offices. According to the presenter, Royal Dutch Shell is planning to install two of NWK’s UC boxes at 700 locations around the world, which alone would add $30-40 million to the company’s top line. Schlumberger, Estee Lauder, Accenture are other examples of companies with global presence that are quickly transitioning from using UC at just their headquarters to installing it multiple branches.

>A NY presenter is not changing his Sell Short thesis on LogMein (NASDAQ: LOGM, $40.03). He emphasizes that the growth of non-Ignition premium customer additions continues to decelerate and the already intense competition for the iPad Ignition app continues to increase.

>A NY presenter is no longer recommending Spectrum Brands (NYSE: SPB, $28.71) as a Buy. The valuation may be cheap, but liquidity has worsened since Harbinger upped their stake. Q2 results were underwhelming. September Q #s will be out next week. The presenter believes that earnings will be fine, but notes that FCF has been weak due to continuing fees and charges.

>A New York presenter recommends Capstone Mining (TSX: CS, $4.10) at this level. He believes Capstone stands to benefit from favorable conditions in the copper market. The company has made improvements in production at the two current sites and will be adding another high-grade copper mine. The stock is undervalued versus peers with a strong balance sheet to pursue growth.

>An LA presenter recommends RLI Corp. (NYSE: RLI, $59.55) as a Buy. Consistency of underwriting characteristics, a strong balance sheet and management focusing its strategy in good niche markets positions this specialty P&C insurer attractively. Presenter highlights the company’s superior ratings, the combined ratio well below the industry’s average and valuation.