When reviewing the financial news I, like many others, usually look for one of three things: a stock that has significant growth prospects but is priced on a reasonable multiple; a stock that is priced on a low valuation compared to earnings or book value; or a stock that has seen recent notable insider purchases. Two stocks that have caught my notice this week are Ambarella Inc and Corcept Therapeutics Inc.
Ambaraella, developer of HD image processing semiconductors, smashed consensus forecasts as sales increased 21% year-over-year and adjusted earnings jumped 19%. Fermi Wang, president and CEO, said that he expects expanding markets for HD cameras to generate growing revenues for the year ahead and consensus forecasts point to EPS growth of 25%. The stock has pulled back 25% since January highs and priced on a forward multiple of 23 looks like growth at a reasonable price.
Several insiders think there is potential value in Corcept Therapeutics Inc after the stock price slumped 40%. The market was disappointed after Corcept reported last month that it was discontinuing its late stage psychotic depression study for Mifepristone based on the recommendations that it was unlikely to prove successful. However, the company reported that its own research and the research of academic investigators has shown that Korlym (Corcept’s FDA approved drug for hyperglycemia) has therapeutic potential in many serious diseases including breast cancer. Based on this four directors purchased $1 million of stock at the lower levels.
- Warning! GuruFocus has detected 2 Warning Signs with AMBA. Click here to check it out.
- AMBA 15-Year Financial Data
- The intrinsic value of AMBA
- Peter Lynch Chart of AMBA
The author is a blogger at SurgingEarnings.com
Risk Disclaimer: This article does not constitute a recommendation to buy or sell. Investing in stocks or other securities and derivatives is a high risk activity and not suitable for everyone. It is strongly recommended that individuals should consult with a SEC registered investment adviser prior to making any investment decisions.
Disclosure: The author holds no positions in any of the stocks mentioned nor has any intentions to initiate any in the next 72 hours.