Shares of Cray (NSDQ: CRAY) fell 30% in the first week of August, dropping from $31 to $21.80. On Aug. 2 the company reported greater-than-expected second-quarter losses of 29 cents per share compared to analyst expectations of 26 cents. Revenue of $100 million for the quarter missed analyst expectations of $101 million as well.

CEO Peter Ungaro said that Cray’s management was forced to lower its outlook due to delays from its suppliers and a fire at a production facility. Delays integrating new chips from Intel and Nvidia have hurt the company’s ability to take on new orders. Also, the fire at one of Cray’s facilities is expected to lower full-year 2016 revenue estimates by over $100 million.

Cray’s share price has returned to $23 as of today, and we believe its future growth prospects remain intact. The fire at one of Cray’s facilities is an isolated event, and we’re confident that once Cray integrates the new chips, it should reach our $40 price target.


Exactech (NSDQ: EXAC) beat second-quarter 2016 earnings expectations by a penny at 31 cents per share on Aug. 2. The company’s revenue for the quarter outperformed analyst expectations by nearly 3% at $66.1 million.

Compared to second-quarter 2015, Exactech’s revenue increased 8% from $61.5 million. Extremity and hip implants led the way, rising 18% and 13%, respectively, to $24.2 and $12.4 million. Knee implant sales increased 6% in the first six months of 2016 and rose 1% during the quarter.

CFO Joel Phillips provided full-year revenue guidance of $253 to $258 million and full-year earnings-per-share guidance of $1.15 to $1.19, up one penny from previous guidance but still not enough to justify buying the stock at its current price.


We are selling Express (NYSE: EXPR) from the Growth Stock Strategist portfolio. Shriveling mall traffic along with a poor quarter of merchandising demolished estimates for the year. Earnings per share this year are now 98 cents versus $1.48 when we first recommended buying the stock. We don’t see it going much lower, but the turnaround will take far longer than we’d like. If you own this stock, I recommend a $10.50 stop-loss limit.


The company’s stock increased about 7% from $16.35 on July 21 to $17.50 at the start of August following a positive report. Earnings per share of 30 cents beat analyst estimates by a penny, and revenue of $423.8 million exceeded analyst expectations of $416.7 million by nearly 2%. That compares to $379 million of revenue for the same quarter last year, a 12% increase.

VP of Engineering Neil Boehm said that Gentex’s (NSDQ: GNTX) launch of 26 new rearview and side-mirror products in the quarter drove revenue higher. Boehm said that this quarter was the first time Gentex launched so many products that came equipped with advanced electronic features, like rearview camera displays or integrated E-ZPass toll modules.

CFO Steven Downing provided revised full-year 2016 sales guidance of $1.68 billion to $1.72 billion, up from previous guidance of $1.64 billion to $1.68 billion.

CEO Fred Bauer sold 696,000 shares of Gentex stock at an average price of $18.03 a share for a total of $12.5 million.

Installed Building Products

Shares of Installed Building Products (NYSE: IBP) fell from $35.70 to $32.50 after lower-than-expected second-quarter earnings reported on Aug. 5. Earnings per share of 34 cents missed analysts’ expectations of 36 cents, while revenue of $212 million was in line with expectations. A slightly higher mix of sales to multi-family units, which generate lower profits, was the reason for the slight miss.

New home starts that rose 4.8% in June led us to believe that investors overreacted to IBP’s earnings miss, and we love the stock at this price. On a year-over-year basis second-quarter revenue of $212 million rose 32.5% from $160 million in 2015. In the past quarter, IBP’s single-family-home product sales increased 13% compared to the industry average of 11%.

CEO Jeffrey Edwards said that 48% of second-quarter revenue increases came from the company’s recent acquisitions. FireClass, which was acquired after the close of the second quarter, sells fireplaces and will add more single-family-home products to IBP’s offerings.

Integrated Device Technology

After posting first-quarter fiscal 2017 earnings results that were in line with analysts’ expectations on Aug. 1, Integrated Device Technology’s (NSDQ: IDTI) share price took a nearly 12% hit on Aug. 2, from $22 to $19.60. The cause was a decision by Chinese electronic device maker Huawei to develop its own chip to replace Integrated’s serial RapidIO products. The loss of Huawei as a customer is expected to hurt Integrated’s sales by about $11 million per quarter.

Integrated reported first-quarter fiscal year 2017 revenue of $192 million, up 19%, beating forecasts by $1 million. The loss of Huawei will be felt in the second quarter, when revenue is expected to be $184 million, up just 9%. CEO Gregory Waters said that the company continues to expand its market share and new product pipeline so that its strategy for fiscal year 2017 was not only intact but “progressing ahead of plan.”

Lattice Semiconductor

Chipmaker Lattice Semiconductor’s (NSDQ: LSCC) share price gained nearly 9%, even though its earnings were disappointing.Because  it’s a company in transition, investors are more patient waiting for revenue to roll in from new products. Revenue for the quarter was $99.2 million, just shy of analysts’ expectations of $100 million. On a year-over-year basis revenue was down nearly 7% from $106.5 million for the same quarter last year.

CEO Darin Billerbeck said that the second quarter of 2016 would “set the stage” for significant revenue increases the second half of the year as a result of the company acquring Silicon Image last year. Specifically, Lattice’s CrossLink device was created after the integration of Silicon Image and is the semiconductor industry’s first programmable mobile image-sensing and display chip. Billerbeck estimates revenue for third-quarter 2016 to range between $110 million and $116 million.

Weyco Group

Since the start of August, shares of Weyco Group (NSDQ: WEYS) have fallen from $27.60 to $25. Second-quarter 2016 earnings per share reported on Aug. 2 of 9 cents were down from 19 cents in the same quarter in 2015, and revenue of $57 million fell 11% compared to $64 million. CFO John Wittkowske said that sales were down for all of the company’s brands.

CEO Thomas Florsheim said that the shift toward online sales channels is hurting the company’s brick-and-mortar retail partners. What’s troublesome is that Florsheim said that the effect of this shift on Weyco’s business would be temporary, but he provided no explanation on how the company plans to capture more e-commerce sales.

Florsheim also pointed out that after eight consecutive quarter-over-quarter sales increases for Stacy Adams, the brand had an off quarter during which sales decreased 5%. Even if second-quarter 2016 was just an anomaly for Stacy Adams, Weyco still faces decreasing sales across its other brands. Another mild winter in the second half of the year could hurt sales of winter boots and the Bogs brand again. Due to a lack of earnings drivers, Weyco remains a hold.

Stock Talk

Ken Shelton

Ken Shelton

I just recently purchased SGMO. They had a poor second art but long term I think this stock will explode, opinions?

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