Hurray is currently trading at 48.3x our fiscal 2008 EPADS, which is at a premium to both S&P 500 average and the peer group average. However, with respect to other selected valuation metrics, the stock is trading significantly below peer levels. According to our view, the company has not yet derived the required benefit from its diversification strategy. Therefore, we maintain our target price of $4, based on a 1.6x Price/Sales using our 2008 sales estimates, closer to the S&P 500 average.

Hittite Microwave's High Margins - Analyst Blog

We maintain our Buy rating on the shares of Hittite Microwave Corp. (HITT). Although the company provided fairly weak guidance for the third quarter, business at HITT remains strong. The company is gaining traction with new product lines, which is driving sales growth, and maintains high margins.

Hittite is currently trading at 17.6x our estimated 2009 EPS of $1.99. Although a premium to its peers on an absolute P/E multiple, its stronger growth rate makes the stock look more attractive with a PEG ratio of 0.6. The company's track record of growth and strong margins are impressive as it has posted better than 19% growth year-to-date in a fairly lackluster market.

We believe that the stock should trade at a premium to its peers given its stronger IP position and strength in large and growing markets. Given an outlook for lower equity valuations and a slow economy, we cut our six-month price target to $45, which we believe is more realistic by year-end. This target represents a P/E multiple of 22.6, which we believe is very reasonable.

Hittite generated an impressive return on equity (ROE) of 28% for the full year 2007. ROE has declined due to the increased level of equity from its IPO and is forecasted to decline further due to its strong cash generation. This in turn reduces its activity and solvency ratios. The more important component of ROE, net margin, has improved steadily over the past year, which we expect it to maintain at close to 30%, a very healthy rate.

Hallmark Finc'l Slogs Through - Analyst Blog

Hallmark Financial Services, Inc.'s (HALL) core 2Q08 results were a penny ahead of our expectations, benefiting from good earned premium growth, additional income from a larger investment portfolio resulting from increased retention of premiums, and a favorable prior-year loss reserve development.

Excellent risk-adjusted capitalization, favorable operating performance, and financial flexibility helped the company in maintaining its A- rating. The acquisition of various agency production sources has resulted in geographic as well product risk for the group. We believe these factors will bring stability to HALL's earnings. As such, we keep the shares on Hold.

Following a review of the 2Q08 results, we are fine-tuning our 2008 and 2009 earnings expectations to $1.35 per share and $1.35 per share, respectively, from $1.37 per share and $1.40 per share. At the current level, the shares of Hallmark trade at 0.99x the 2Q08 book value of $9.20 per share. On October 29, 2007, the shares achieved an intraday high of $17.62 per share and reached an interim price-to-perfection of 2.1x price-to-book value per share, exceeding our previous $17.00 per share target.

Our new six-month price target of $10.40 per share (down from $12.95 per share recently), incorporates a price-to-book multiple of 1.05x (down from 1.35x previously) on our estimated book value of $9.90 per share at September 30, 2008.

Anadigics Target Adjusted Down - Analyst Blog

Anadigics, Inc. (ANAD) recently downgraded its guidance and now expects revenue around $62-$65 million, down from the previous estimate of $75-$81 million. Pro-forma EPS should now be between -$0.01 and $0.01. As a result, ANAD will also defer additional investments in its China fab. We are appalled by the significant outlook revision given that the company held their conference call only a few weeks ago.

Earlier, the company reported second-quarter results, which topped our estimates, driven by stronger than anticipated growth in broadband. Revenue of $80.5 million, up 8% quarter-over-quarter and 49% year-over-year, exceeded our estimate of $78 million. Pro-forma EPS of $0.18 beat our estimate by two cents. However, wireless segment was down 3.7% sequentially and the management indicated that the softness is going to continue in the third quarter due to softness in the market and some inventory correction at customers. We reiterate our Hold rating.

The stock is currently trading at 9.6x our current FY2008 EPS estimate of $0.58. Given the current negative guidance, coupled with an uncertain macro environment, we have adjusted our fiscal 2008 estimates and sharply reduced target price to $4. Our current six-month target price is 11.1x our FY2008 EPS estimate and 12.1x our preliminary FY2009 EPS estimate.