Sell Vishay Precision
NMI Holdings (NSDQ: NMIH) reported second-quarter net income of $2 million, or 3 cents per share, compared to a net loss of $10.4 million, or 18 cents per share, for the same period in 2015. The company benefited from stronger new insurance written that soared 129% to $5.8 billion. Sales during the quarter also grew 33% year-over-year to $29.6 million.
In the second quarter, management entered into a quota share reinsurance agreement with a panel of eight third-party reinsurance providers. This will allow NMI to receive a 20% commission for ceding 23% of its existing policies and another 23% commission from future policies written through the end of 2017.
Rackspace Hosting (NYSE: RAX) reported second-quarter net income increased 5.8% year-over-year to $36 million. Revenue increased 7% year-over-year to $524 million, despite the negative effect of currency exchange rates and the divestment of its Jungle Disk business. The company credits the strong second-quarter performance to growing demand for its managed services.
As it continues divesting non-core services, Rackspace depends more on the demand for its core services. Last month, it agreed to sell its Cloud Sites business, which generates about $90 million in annual revenue, to Liquid Web. The deal should close in the third quarter of 2016.
The company expects third-quarter revenue to range between $510 million and $515 million. Full-year 2016 revenue should come in between $2.06 billion and $2.08 billion, estimates that factor in about a $70 million hit from currency effects and divestitures.
U.S. Ecology (NSDQ: ECOL) reported second-quarter revenue of $122.4 million, compared to $139.7 million in the second quarter of 2015, a figure that includes $16.9 million from the sale of Allstate Power Vac last November.
Net income for the quarter came in at $8.9 million, or 41 cents per diluted share, compared to $2.1 million, or 10 cents per diluted share, in the 2015 quarter. The increase was due to a gain from the sale of its divested businesses. U.S. Ecology expects revenue for its existing businesses to remain in the low single digits for the rest of the year.
Weis Markets (NYSE: WMK) announced 2016 second-quarter revenue increased 1.7% to $730.4 million while comparable store sales increased 1.8% compared to the second quarter in 2015. An increase in customer traffic improved produce, deli and pharmacy sales, driving up overall revenue.
Earnings fell 8.3% to $15.3 million, while earnings per share fell to 57 cents, compared to 62 cents last year, due to higher base wages during the quarter.
Vishay Precision Group (NYSE: VPG) reported second-quarter earnings at $1.96 million, or 15 cents per share, up from $1.77 million, or 13 cents per share. Revenue continues to slip, falling 2.5% to $58 million from a tightening global market.
The company’s cost-cutting efforts have improved its margins, but Vishay’s third-quarter revenue guidance of $55 million to $60 million is flat compared to the same quarter last year. Even as the company introduces new products, we expect overall growth to remain subdued.
Vishay currently trades slightly above the price we bought it for in October 2014, which gives us a good opportunity to exit this position.
Sell Vishay Precision Group.