At the conclusion of each week, VFC's Stock House examines some news items, stocks and stories that made headlines during the previous trading week, but may also make headlines or influence trends during the upcoming week as well. Although focusing intently on the biotech and healthcare sectors, due attention is also given to potential market-moving or game-changing companies in a broad variety of markets and industries. The 'Weekly Stock Watch' will also introduce new companies for coverage and identify some stocks that may have entered 'buy territory'.
Here's a toast to the first quarter of 2012, one that returned quite a bit of green to the portfolios of many an investor, renewed confidence in the markets and also had many forget the dog days of early 2009 when everybody and their brother was telling you to sell everything.
Those that might have bucked the selling trend and used the dip to buy are sitting pretty right about now, but that doesn't mean another market correction isn't in the works.
If one does transpire, however, few believe it will be as drastic as the drop of 2008-09, but it could be significant enough to spark fear into the more conservative who couldn't stomach another dip, even a modest one. That's why it's always a good idea, in my opinion, to take advantage of the runs that do materialize and at least sell some trading shares on the way up in order to play on 'house money' for the duration of an investment.
There's nothing wrong with missing out on the back end of a prolonged run as long as some profits were banked on the way up. Using Oncothyreon (ONTY) and Galena (GALE) as the most recent examples, we're able to see that a good run can disappear even quicker than it takes shape and, at least for this guy, it's a whole lot worse of a feeling to watch a stock rise and fall without having sold a dime in profit than it is to bank some profits only to see a stock go higher.
Trust me on that one, I've tried both strategies.
To prepare for a possible market retreat, I like having some free cash on the sidelines to jump in where and when necessary, but that doesn't mean it's time to rule out sustained higher prices. It's an election year, after all, so you know Washington is going to keep the news as good as it can and outside of Europe right now, things are starting to look pretty rosy.
On that note, it is funny how news coverage of the weak economic situations in Europe has kind of fallen off the map over the past couple of weeks; but you know the coverage will be back in a quick minute if the market does start to teeter.
That's just the nature of the media beast - hold the news in the back pocket only to throw it on everyone when it's time to sensationalize and dramatize.
On the note of sensationalizing, what were Spike Lee and Roseanne Barr thinking when they posted someone else's personal home addresses on their Twitter accounts?
Were they trying to incite a vigilante to take matters into his or her own hands? Because I thought that's what started this whole mess in the first place.
Or was it an act of opportunism? The opportunists have been all over the talk show circuits these days getting their names in the media again discussing a situation that they know little about, so it only seems fitting that Spike and Roseanne join the party, too.
Anyone who doesn't visit Madison Square Garden on a regular basis hasn't heard a peep from Spike Lee in forever, and for Roseanne, well she hasn't been a news item since she butchered the National Anthem all those years ago and now she has a new TV show to promote; you know what they say, even bad press is press, and controversy sells ratings.
Gotta love the opportunists.
And you gotta love Vladimir Putin. If ever there was a guy who relishes in the glory of the Great Cold War, it's that guy. The stories over the past few days of the US Ambassador to Russia allegedly being spied on are almost comical, while the social media aspect - the Ambassador has aired his complaints on Twitter - reminds us of the PR blitz undertaken by Russian spy Anna Chapman a few years back.
Mitt & Co. have already made bank for the makers of Etch-A-Sketch during this campaign season, and now that he's all but wrapped-up the Republican nomination for President, I hear that sales of Aquanet hairspray are going through the roof as Mitt takes to the talk show circuits.
It takes super-strong hold to keep the hair in place for the late night Leno appearances.
Reports from Europe are indicating the EU may be ready to charge additional airport taxes to foreign carriers utilizing their airports and flying through their airspace. As per officials in Europe, the notion is based on aircraft emissions and would be used to persuade airlines to curb those emissions.
It's more likely that the increased taxes are related to the dire economic straights that Europe is engulfed in right now, and it's a bold, if not dangerous move as Middle Eastern countries, such as the United Arab Emirates, have a whole lot of desert to build runways and airports and are looking to steal some of the business away from the European airline hubs. This one barely gets any attention, but it could reshape cross-hemisphere air travel.
Did the Knicks really just beat Miami? And beat them convincingly?
I've been dogging the Mets all spring, bad-mouthed the Wilpons and swore off the team this year thanks to the futility of the owners, but I can't help but get excited again as the season draws nearer. If Davis, Wright and Duda can put together decent seasons, and if Bay can be at least a shadow of his former self, and if Murphy keeps up the .300 hitting, then the lineup could be pretty good.
And although Pelfrey's ERA is rising faster than the AMLN share price, Santana has looked sharp.
All they're missing is a dynamic, table-setting leadoff guy.
Let's see what's up in the markets...
Research In Motion Limited (RIMM): Research In Motion (RIMM) reminds me of Blockbuster (now part of the Dish Network (DISH)) as a company that had dominated its space for years, but failed to stay ahead of the game and transform itself into a next-generation company before the 'new generation' had expired.
In the world of technology the competition is not looking to compete in the landscape of today, but it's the landscape of tomorrow that matters.
Blockbuster failed to prepare for the day of DVD-by-mail and streaming video in time to compete with Netflix (NFLX) - even Redbox chipped away at the one-time giant by hitting the scene with DVD-by-kiosk - and that miscalculation cost Blockbuster everything.
In the case of RIM, the company enjoyed such dominance in the smart phone market for so long that it forgot to evolve from email, appointments and calendars. By the time Apple (AAPL) threw the iPhone onto the market, it was too late for RIM, especially so when Google's (GOOG) Android proved to be light years ahead of the BlackBerry, too.
The earnings report this week showed that the bleeding is far from over - and the share price showed that, too.
That said, the company is looking to set itself straight again. Numerous board members have departed and the new board will steer the new course ahead by returning to the company's roots and strength - business enterprise. RIM will also issue no sales and earnings guidance for the near future until the closet is in order.
Too little, too late?
We'll see. But it's a risky bet to jump in right now looking for a rebound, in my opinion, although RIMM shares rebounded on Friday after the new corporate plans were announced.
FuelCell Energy (FCEL): Shares of FuelCell Energy (FCEL) spiked by over five percent into Friday's close, prodded by a little volume boost that ended up seeing more than double the expected share count trade hands.
Some key partnerships and the potential of this company's green technology pushed shares to over two dollars for a time earlier in the year, but a stock offering sent them right back to the $1.50 mark. Although the offering stalled an otherwise encouraging price run, investor interest has remained strong - judging by consistent volume - and Friday's late-day burst should help to maintain that trend.
The news has been picking up for FuelCell, with the mentioned partnerships highlighting the first quarter. Margins and order volume have also been picking up on a positive trend and FuelCell is positioned to take well advantage of the growing tide towards sources of green energy.
It's common in the investing world to assume investors expect news on the following Monday when volume and price shoots up on Friday afternoon, but it could also have just been a case of some shorts closing out their positions before the weekend.
Sirius XM Radio Inc. (SIRI): Defying many of the short arguments that have been put forth of late regarding Sirius XM Radio (SIRI), SIRI shares jumped by just about five percent on Friday on volume twice the daily norm, good enough for a mention on the Nasdaq most-actives list.
The spike and volume increase came on news that Liberty Media is looking to increase its stake in Sirius from 40% to 51%, enough to take control of the company and then spin it off. Liberty helped Sirius avoid bankruptcy back in early 2009 by swooping in with the last-minute deal to acquire 40% of the company, offer loans and avert disaster.
Although the trading reflected a positive sentiment among investors, it's likely that some are still unsure of how a Liberty-controlled and spun-off Sirius will effect investors, so expect volatility to surround the issue moving forward, especially since Sirius officials asked the FCC to dismiss Liberty's assertions, according to a Bloomberg report.
One to always keep an eye on anyway, the renewed Liberty speculation makes SIRI a stock to watch this week.
Sunesis Pharmaceuticals (SNSS): Shares of Sunesis (SNSS) closed Friday higher by 15%, but traded even higher at points during the day, after a Thursday afternoon announcement of a licensing deal with Royalty Pharma.
The deal, based on vasoroxin, which Sunesis is currently testing in Phase III trials as a treatment for first relapsed or refractory acute myeloid leukemia, could be worth an up-front payment of $25 million. The money, should certain conditions be met, will be paid after an interim analysis of the trial data.
Needless to say, the boost in share price reflected the positive sentiment of investors who know that any developmental stage company banking a partnership payday like this one is a boon because it lessens the risk of massive dilution to keep operations running.
Friday's move may continue into next week.
Oncothyreon Inc (ONTY): The rise and fall of Oncothyreon (ONTY) has been week documented at VFC's Stock House, and after a volatile week that included a stock offering that priced shares far less than where they trading just a month ago, it could be another see-saw ride coming up this week.
The offering came just weeks after the announcement that the Stimuvax Phase III trial results would not be available until early 2013, beyond the time frame previously expected by investors.
Although shares were priced for four dollars, ONTY has held its own and not dipped quite that low - at least not yet.
For those looking at taking a chance on Stimuvax, the recent slide could be a buying opportunity. The risk/reward at the current levels is far greater than it was when the stock was trading at twice these levels not too long ago, although the inherent risk of the sector - and of the success rate for cancer immunotherapies in general - should also be respected.
This company is positioned to remain in the headlines up until the time the Stimuvax results are released, and that means that some decent trading opportunities could be in store.
Cel-Sci Corp (CVM): Although silent on the news front of late, shares of Cel-Sci (CVM) traded as high as ten percent to the upside on Friday before settling in for a two percent rise on the day. Volume was well below the norm.
Cel-Sci and its partners, Orient EuroPharma and Teva (TEVA), are conducting a world-wide Phase III trial for Multikine, a potential immunotherapeutic treatment for head and neck cancer.
Advanced Cell Technology (ACTC): Eyes are heavily on Advanced Cell Technology (ACTC) as a potential leader in the revolutionary new field of stem cell science and treatments. With that being said, new investor interest may not be on the company so much right now since the recent announcement that shareholders will seek a reverse stock split at the next shareholder meeting.
While boosting the share price by conducting the split makes sense in order to attract larger institutional investors, most of whom won't touch bulletin board or pink sheet stocks, the prospects of a reverse split will scare some investors off, since most stocks fall immediately following implementation; some fall pretty significantly.
Because ACT has so many shares outstanding, the prospects of achieving high enough prices without conducting a split are slim to none with the pipeline in the early stages that it's in, so the split is a necessity.
Most will wait until the (potential) post-split dip to add shares, but some will consider the sub-nine cent prices that have resulted from the split announcement as a good time to add.
The lower the prices go, the better the speculative buy this company becomes, in terms of taking a chance on a potentially ground-breaking new treatment for severe vision loss.
Siga Technologies (SIGA): Siga Technologies (SIGA) was "upgraded" by TheStreet.com this past week.
I don't understand how such a heavily opinionated, glorified blog like TheStreet can issue upgrades and downgrades and expect it to be interpreted as news to investors, and judging by the (lack of) investor reaction to the "news," I don't think anyone else understands - or cares - either.
That said, I still like SIGA, too, and I loved it when it was trading for under two bucks when TheStreet still had a "sell" rating on it.
The goal of VFC's Stock House is to bring new ideas, companies, and discussions to investors and readers. The biotech and healthcare sectors, especially, are unique in the sense that investors are able to take in part in treatments and science that can potentially change - and even save - lives. Because of the speculative nature of the sector, the gains could be huge if a drug or treatment makes it, but the gains are also measured with the impact such an event has on mankind. I have enjoyed my time building this blog and website. With respect to the increased amount of time I am devoting to VFC's Stock House, I have started taking compensation from third parties to research and cover certain companies that I believe have potential and also fit the profile of what readers of this website look for.
VFC's Stock House has been compensated by a third party to research and bring to the eyes of readers and potential investors Coronado Biosciences (CNDO), for a period of one month.
Coronado Biosciences (CNDO): Investors may be drawn to Coronado for its unique pipeline and market potential. the company has two flagship products in development with multiple tria-based catalysts coming due in 2012.
CNDO-201, is known as TSO (Trichuris suis ova) and is a biologic being developed for the treatment of numerous autoimmune diseases, including Crohn's disease, ulcerative colitis and multiple sclerosis. The biologic treatment itself is actually a porcine whipworm that has proven in early studies to reduce, and sometimes eliminate altogether, the effects of the conditions listed above. Because the whipworm ova being used for treatment have not adapted to reproduction in humans, there is no threat of them multiplying and the safety profile has been sound.
Through the course of 2012 Coronado plans to initiate a Phase IIb Chron's trial in the US (2Q), a Phase II Multiple Sclerosis trial in the US (2H) and a European Phase II Chron's study, in conjunction with licensing partner, Falk.
CNDO-109, or Activated Natural Killer Cells, is being developed for the treatment of acute myeloid leukemia (AML). A Phase I has already been completed and presented for this indication and the company expects to launch a Phase II is mid-2012. Preclinical studies of this technology have also demonstrated success in multiple other cancer types, including breast, prostate and ovarian, leaving open a significant market opportunity, should additional trials prove as successful as the early ones.
Coronado has two solid pipelines moving forward in multi-billion dollar markets that have thus far demonstrated solid results. Generally, the patient investor benefits most by getting into a sound technology early. With multiple catalysts pending this year, and considering that there are no prescription alternatives available for some of the indications being targeted by CNDO-201, Coronado may be presenting a unique investing opportunity.
A full report on Coronado will be available at VFC's Stock House early in the week.
A few stocks that based on recent history and trends could potentially be sitting in Buy territory...
Accentia Biopharmaceuticals (ABPI) and Biovest International (BVTI): Both have slipped from early-year prices and may be sitting towards the lower end of their respective trading ranges. Being that Biovest is a subsidiary to Accentia, and Accentia has a market cap of well less than half that of BVTI, Accentia may be the better buy.
Capstone Turbine (CPST): Capstone loves to trade between the one and two dollar marks, but for the most part one dollar proves to be the bottom. During periods of broad market downswings, however, CPST has been known to temporarily dip below that mark, but never for too long.
The company's low-emission microturbine units have steadily been gaining headway in both the domestic and international markets and could eventually become a big player in green energy production.
Investors are waiting for profitability.
Ampio Pharmaceuticals (AMPE): Ampio is fresh off a run to four, but as it trades to the south of $3.50, it could be time load up again.
Oncothyreon (ONTY): As mentioned above, ONTY may be sitting in the buy zone for those wanting to play the Stimuvax catalyst. It's my opinion, however, that we'll see four bucks before it's all said and done.
Titan Pharmaceuticals (TTNP): Anytime Titan visits the dollar mark, it's proven to be a decent pickup. News has been slow lately and investors are waiting on a partnership to be announced for Probuphine, which has cleared multiple late stage trials for the treatment of opioid addiction.
Here's to another week of Happy trading...
Disclosure: Long TTNP, SIGA, CVM, CPST, FCEL.
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