- UBS comments on BearingPoint (NYSE:BE) saying 06 pro forma results were ahead of aggressive ests & the business trends into F07 are very solid. Bookings & rev growth ests were very strong & oper margins of ~10% are a year ahead of schedule, but turnover remains a concern. 1x-ers will cause F06 cash & FCF to be lower than expected, but the firm thinks the outlook for recurring ops in F07 & beyond looks very compelling.
The firm spoke to several convert experts and think BE (to file the 10K & prevent mat'l business disruption) & the Series A/B holders (b/c they are subordinate to the banks & Class C/D tranches) are both incented to get a fair deal done quickly & move on (hopefully in the next few weeks). The process could drag on but b/c that would be debilitating to both parties, the firm thinks it's less likely.
Strong fundamentals, valuation & potential for a relatively quick resolution on the debt causes the firm to think potential weakness indicated in after-hrs trading will be short-lived. On even more conservative ests, DCF suggest a $12 value & they project a F07 FCF yield of 12%. Firm would view weakness as a buying opportunity.
Notablecalls: BE stock was down as much as 15% in after hrs trading. That looks a bit excessive. Would be a buyer around these levels.
The firm spoke to several convert experts and think BE (to file the 10K & prevent mat'l business disruption) & the Series A/B holders (b/c they are subordinate to the banks & Class C/D tranches) are both incented to get a fair deal done quickly & move on (hopefully in the next few weeks). The process could drag on but b/c that would be debilitating to both parties, the firm thinks it's less likely.
Strong fundamentals, valuation & potential for a relatively quick resolution on the debt causes the firm to think potential weakness indicated in after-hrs trading will be short-lived. On even more conservative ests, DCF suggest a $12 value & they project a F07 FCF yield of 12%. Firm would view weakness as a buying opportunity.
Notablecalls: BE stock was down as much as 15% in after hrs trading. That looks a bit excessive. Would be a buyer around these levels.
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