SIRI: Shares of the SiriusXM satellite radio responded positively to news that losses narrowed and revenues increased during the third quarter of 2009. Aside from one time charges, the company reported cash flow break even.
While I am confident in the ability of SiriusXM to continue demonstrating growth, we can't ignore the fact that the cash for clunkers program, which gave a boost to the auto industry in the third quarter, also gave a boost SiriusXM. Satellite radio is not entirely dependent on the auto industry for survival, but it's safe to say that it is significantly dependent on the industry. Let's face it, Americans are lazy and they're more apt to buy SatRad if it's already installed in a new car rather than purchasing a radio on line that they have to install and activate themselves.
If the auto recovery remains strong, then so will the SatRad recovery, in my opinion; although I believe that the more consumers are exposed to the service, the more they'll be apt to purchase portable SatRad devices such as the Sirius Stiletto.
There's nothing like being able to listen to your favorite football team anytime and anywhere - even if wifey has you out watching a concert in the park.
However, SIRI is not completely out of the woods yet; SatRad is a luxury item and if the auto industry falls into another rut and/or the unemployment rate continues to rise, then the rise of SiriusXM will also be put on hold.
That being said - barring a market setback - I still see SIRI inching up towards the one dollar mark, with some periods of consolidation along the way.
Disclosure: VFC is long SIRI.
NRIFF.pk: Covidien and Nuvo Research Inc., announced on Thursday morning that the US FDA has granted approval of Pennsaid, an anti-inflammatory drug used for the treatment of osteoarthritis of the knee.
Upon approval, Nuvo is due to receive a $15 million milestone payment from Covidien and is due to receive royalties on sales "in line with industry standards."
Investors were disappointed with the price action of the NRIFF stock (just under fifty cents) at Thursday's open before dipping down to the low forty cent range, but that action is in line with the recent price action of stocks that have just received FDA approvals.
In my opinion, in this market investors and traders are more impatient than ever and are willing to take advantage of anticipatory, short term spikes before an approval decision (in order to bank some quick profits) before then changing course and going long after the drop that occurs at the point of "sell the news."
It's a manipulative game, in my opinion - BDSI got beat down, for instance, on Wednesday after starting to run early in the day - but it's also a game that can also benefit the small investor just as much as it benefits the big boys.
It's a lot less gut-wrenching to buy a stock for a decent price when you KNOW the approval is in rather than having to be all-in at decision time when you're sweating the decision.
In the case of NRIFF, at this point patience is needed. The drug will not be launched until the first half of 2010, so if you can get in for a decent price now and have the patience to hang one - I think that at least a double could be in order by launch time. I'm not expecting too much more than that for now, but the risk of this investment just dropped significantly; with an approved product and a strong partner, NRIFF is a pretty safe bet to rise.
Just my opinion, do your own DD.
Disclosure: VFC is long NRIFF.
