Our six-month price target of $14 represents a P/S multiple slightly above its peer group.

Novatel a Hold on Competition

We maintain our Hold recommendation and the same valuation target for Novatel Wireless (NVTL), a leading provider of wireless data access cards and embedded solutions, following first quarter 2008 financial results. Lack of proper business execution, delays in product shipment due to technical issues, and a shift in market demand towards the company's low-end products, were primary reasons sited for lackluster performance.

We believe these issues will continue to impact the company through the remainder of this fiscal year, as Novatel did not provide any specific time frame and visibility when opportunities from its new product-cycle can be derived. In addition, the market for wireless data access equipment has become more competitive as several large vendors are on the verge of introducing innovative products with attractive pricing.

Novatel is trading at 16.0x our estimated 2008 earnings, which represents a premium to the S&P 500 average but essentially at par with the comparable peer group average forward earnings. However, with respect to other selected valuation metrics, the stock is trading well below the peer group average. We believe this valuation discount reflects management's challenges to project changes in market demand which resulted in disconcerting first quarter performance.

Increased competition in the mobile data card market and ongoing economic weakness may also affect future reporting periods. We, therefore, maintain our Hold rating with a six-month valuation target of $10 based on P/S of 0.9x our 2008 estimated sales, closer to the peers.

Pipeline a Bit Early on Alexza

Alexza Pharmaceuticals, Inc. (ALXA) focuses on the development and commercialization of proprietary products for the treatment of acute and intermittent conditions. We are enthusiastic on the company's proprietary novel Staccato system that reformulates oral or injectable small molecule compounds into an inhalable aerosol.

The company has six product candidates in clinical stage trials, including leading candidates AZ-001 for migraine headache pain relief and AZ-004 for acute agitation in patients with schizophrenia. Recent data on both drugs lead us to believe the Staccato system is both safe and highly effective.

Our price target is $8 and our rating is Hold. At this time, we think investors can be patients with Alexza. Preliminary data on AZ-001 and AZ-004 looks encouraging, but the company still has to complete phase III trials before we proclaim either a success. Upside over the next few quarters could come from the announcement on a partnership or the phase II data on AZ-002.

Margin Concerns for LDS Solar

LDS Solar's (LDK) revenue and earnings for the first quarter continued to show strong growth, which again exceeded market expectations. We think LDK will continue to grow quickly in the next few quarters due to its aggressive capacity expansion and strong growth of solar power industry worldwide.