Daily Archives: May 16, 2008

52-Week Low Club (GY, GSAT, LIOX, NCC, PLA, SWWC, WNR)

Today didn’t look like the normal 52-week low brigade.  Usually there is a massive implosion of some sort that took a stock under.  Most of these were just more selling trends on news that has already been out.  Here are today’s featured lows:

  • GenCorp Inc. (NYSE: GY) wasn’t under its 52-week low in the last hour today, but hit $8.23 vs. an $8.28 prior. Aerospace & Defense and Real Estate. Bad combo.
  • Globalstar (NASDAQ: GSAT) got back above its prior $3.08 low over the last 52-weeks, but this one just seems to keep getting worse.
  • Lionbridge Technologies Inc. (NASDAQ: LIOX) was down at $2.66, under the $2.70 to $6.29 range.  It looks like the lion’s roar is is a meow, at best.
  • National Citiy Corp (NYSE: NCC) was down over 4% at $5.55, under the $5.76 to $35.86 range.
  • Playboy (NYSE: PLA) going from bad to worse, and still not a cheap stock.  Down another 7% at $6.00 late in the day with a $6.38 to $12.00 52-week range.  If this keeps up Heff might have to turn in that mansion, and his activities too.
  • Southwest Water (NASDAQ: SWWC) managed to get back above the 52-week lows of $10.52 today, but water (and water utilities) is supposed to be one of those safe sectors.
  • Western Refining (NYSE: WNR) merely hit its prior low of $7.81 today.  But this stock was at $66.00 over the last year.

Jon C. Ogg
May 16, 2008

Posted on: May 16, 2008 – 2:15 pm in HI/LOW, , , , , , ,

Ascent Solar Bogged Down By Spot Offering (ASTI)

Ascent Solar Technologies, Inc. (NASDAQ: ASTI) is seeing shares under pressure because of its secondary offering.  The company priced a secondary offering of 3,800,000 shares of common stock for $14.00 per share.  After the drop and before the added share inclusion, Ascent’s market cap was $210 million.

J.P. Morgan was the managing lead underwriter; co-managers were listed as Cowen & Co., Jefferies, and Merriman Curhan Ford.

Ascent plans to use the net proceeds from the offering for the design, purchase, installation, qualification and testing of production tools for approximately 30 MW capacity for the production of thin-film PV modules, and for general corporate purposes.

Unfortunately, the company’s close was $15.89 yesterday, so it took a huge haircut for this share sale. Its 52-week trading range is $6.50 to $28.35. Shares are down 6% at $14.94, and with such a deep discount it is surprising that shares are not down even more.

You can join our open email distribution list to hear about other IPO’s, secondary offerings, special financings, mergers, spin-offs, and other special situations.

Jon C. Ogg
May 16, 2008

Jon Ogg produces and edits the "10 Stocks Under $10" newsletter and he does not own securities in the companies he covers.

Posted on: May 16, 2008 – 1:05 pm in Alternative Energy, Secondary Offering,

Del Monte Ready To Scrap StarKist (DLM)

Del Monte Foods Company (NYSE: DLM) is responding to written reports and confirmed that the company is exploring strategic alternatives for its seafood business, which could include a potential sale of the business.

Of course it cannot assure that its exploration of strategic alternatives will result in a transaction and that the Board of Directors has not approved a transaction at this time.

Del Monte Foods generated $3.414 Billion in sales for fiscal April 29, 2007, and StarKist Seafood operating segment had sales of $542.4 million, a decrease of $23.5 million or 4.2%, compared to fiscal 2006.  Del Monte’s total market cap is $1.87 Billion with shares down about 1.6% today.

The company also noted that it and two others accounted for some 79% of the canned tuna market, with Del Monte’s StarKist having some 33.7% of that market.

StarKist is a brand that it should be able to unload rather easily despite some of the slowing from 2006 to 2007, or so it would seem.  Owning that much market share is perhaps value enough, particularly if this can be combined with another operation.

You can join our open email distribution list to hear about other break-ups, secondary offerings, IPO’s, secondary offerings, special financings, mergers, spin-offs, and other special situations.

Jon C. Ogg
May 16, 2008

Jon Ogg produces and edits the "10 Stocks Under $10" newsletter and he does not own securities in the companies he covers.

Posted on: May 16, 2008 – 12:31 pm in Food, Mergers and Buy Outs,

Can Carl Icahn Fix Broken Biotechs? (ANX, BIIB, ENZN, IMCL, TELK, FOLD, AMLN, REGN)

Carl Icahn is a billionaire financier, activist, and investor.  Most think of Icahn as an activist investor that wants to get inside and drive value without having to acquire the whole company to resell it later.  This strategy works and works well, so long as the right strategies and efforts are applied properly to each stock.  The underlying sector a company is in is critical too, and for some reason Carl Icahn has been trying to do this in biotech stocks.  We took the biotech filings from both Mr. Icahn’s own holdings and from Icahn Capital LP to see what Mr. Icahn thinks he has up his sleeves.

CARL ICAHN direct holdings, via several investment vehicles:

Adventrx Pharmaceuticals Inc. (AMEX: ANX) down 80% from highs

  • $467,000.00 for 864,865 shares

Biogen-Idec (NASDAQ: BIIB) down about 25% from highs 

  • $153.4M for 2,487,181 shares

Enzon Pharmaceuticals (NASDAQ: ENZN) down only 16% from highs

  • $5.6M for 614,420 shares

ImClone Systems (NASDAQ: IMCL) down 18% from highs

  • $494.9M for 11,669,544 shares

Telik Inc. (NASDAQ: TELK) down over 50% from highs

  • $2.536M for 1,039,165 shares

ICAHN CAPITAL LP direct holdings:

Adventrx Pharmaceuticals Inc. (AMEX: ANX) down 80% from highs

  • $1.8M for 3,459,459 shares

Amicus Therapeutics, Inc. (NASDAQ: FOLD) down 45% from highs

  • $2.16M for 201,940 shares

Amylin Pharmaceuticals Inc. (AMLN) down 40% from highs

  • $185.1M for 6,339,653 shares

APPLERA (NYSE: ABI) down 10% from highs

  • $21.3M for 649,026 shares

Biogen-Idec (NASDAQ: BIIB) down about 25% from highs 

  • $613.7M for 9,948,723 shares

Enzon Pharmaceuticals (NASDAQ: ENZN) down only 16% from highs

  • $22.6M for 2,457,683 shares

Regenron Pharmaceuticals (NASDAQ: REGN) down about 28% from highs

  • $48.1M for 2,508,001 shares

Telik Inc. (NASDAQ: TELK) down over 50% from highs

  • $10.1M for 4,156,663 shares

*** percentage down from highs means the 52-week highs, so many are off much more than all-time or historical highs.

It may not be fair to refer to all of these as broken, because many aren’t.  What is interesting here is that if you follow biotech stocks and if you know these companies, most of these have fallen from their former glory.

Here is the problem with biotech stocks: They almost HAVE to be public to live up to expectations, so they very rarely go private because of the need for capital.  The mere nature of putting molecules and modified products into your body has risks, and many companies cannot control what happens or how people their meds after a while.  Biotech companies cannot control the FDA and they cannot control independent verification or investigative studies.  No company can control whether or not a competitor comes out with a greater product.  Biotechs are different in that investors would rather see a biotech spend cash to acquire another biotech rather than engage in a share buyback or pay out a dividend.  When was the last time you heard a broker or an investor discuss the high dividend check they expect from their biotech?  Me neither…

Mr. Icahn has a great track record of influencing companies.  He made a fortune off the move in Time Warner.  Motorola has so far been a flop and Yahoo! is just getting started.  But he didn’t become a billionaire by throwing darts nor by investing in mutual funds. 

But there is a real discourse here from biotechs to other sectors, and it would just seem much easier for Mr. Icahn to get better returns elsewhere.  It might be easier backing high-risk and high-reward biotech ventures from scratch instead of trying to fix existing biotechs with problems.

You can join our open email distribution list to hear about activist investing, special financings, M&A, IPO’s, secondary offerings, and other special situations.

Jon C. Ogg
May 16, 2008

Posted on: May 16, 2008 – 10:43 am in Biotech, , , , , , , ,

Hypertension Results Drive Pharmacopeia (PCOP)

Pharmacopeia, Inc. (NASDAQ: PCOP) is seeing shares surge in pre-market and at the open of trading today.

The company said that PS433540, its first-in-class Dual Acting Receptor Antagonist, showed statistically significant blood pressure reductions in a Phase IIa study in patients with mild to moderate hypertension.

PS433540 is being evaluated and developed as a potential treatment for hypertension and diabetic nephropathy, and the company said this is a novel blood pressure product candidate that possesses two validated action mechanisms in a single molecule.

The data will be presented today at the at the American Society of Hypertension Scientific Meeting and Exposition in New Orleans.

The company has also announced that it will seek to release a Phase IIb result of 375 subjects in Stage I and II hypertension to evaluate safety and efficacy at three different doses versus placebo at the end of 2008.

While there are millions of Americans with hypertension and while there are many hypertension medications that have been on the market for years, the novel aspect of this is the single molecule that addresses hypertension and the possible complications from that mixed with diabetes.

Shortly after the open, shares are up almost 40% at $4.49 on nearly 1 million shares.  Its 52-week trading range is $2.89 to $6.14 and its current market cap is only $133 million.  As of last look, the company had $61.4 million in cash on the books.

Jon C. Ogg
May 16, 2008

Posted on: May 16, 2008 – 8:43 am in Biotech,

GE Confirms Appliances Soon To Be History (GE)

General Electric Co. (NYSE: GE) has confirmed that it is reviewing strategic options for its Appliances business operations.  Three possibilities were noted for the unit:

  • a strategic partnership or joint venture;
  • spin off;
  • or the sale of the business.

GE’s Chairman & CEO Jeff Immelt said that it has exited slower growth and more volatile businesses and generated $52 billion in gross proceeds from those dispositions.

Well, when you have Ecomagination, GE Oil, jet engines and services, medical tech, key finance operations, and more, maybe kicking out the appliances operations will let the company get closer to that old target of 20% return on capital.

You can join our open email distribution list to hear about special financings, M&A, IPO’s, secondary offerings, and other special situations.

Jon C. Ogg
May 16, 2008

Posted on: May 16, 2008 – 7:39 am in Conglomerates,

Select Positive ASCO Data (ARRY, AZN, LLY, DNA, GSK, ONXX, PFE, ZGEN)

Last night was a novel release from the American Society of Clinical Oncology (or ASCO) as the society decided to publish all of the findings to the public at once.  Keep in mind that many of the larger drug companies will have other presentations as well.  Below is some of the key and very brief data:

Array BioPharma (NASDAQ: ARRY) and AstraZeneca have announced plans for two additional randomized Phase II trials for AZD6244 in the second half of 2008 to test AZD6244 (ARRY-886) in combination with a chemotherapeutic agent; one trial will be for melanoma patients and the other for non-small cell lung cancer patients.  AstraZeneca (NYSE: AZN) showed positive breast cancer data in survivability.

Eli Lilly (NYSE: LLY) showed that its Alimta showed 3 months longer survival in a lung cancer sub-set group.

Genentech (NYSE: DNA) showed that Avastin in brain cancer trials showed 9 months survival while most patients live only 6 months from the study point.

GlaxoSmithKline (NYSE: GSK) showed that Tykerb added 1 year survival on advanced breast cancer patients.

Onyx Pharmaceuticals, Inc. (NASDAQ: ONXX) and Bayer HealthCare Pharmaceuticals announced that Nexavar tablets significantly improved overall survival by 47.3% in patients in the Asia-Pacific region with primary liver cancer versus those receiving placebo; Nexavar improved time to progression in these patients by 74%.

Pfizer (NYSE: PFE) presented data showing Celebrex may prevent lung cancer in current and former smokers.

ZymoGenetics, Inc. (NASDAQ: ZGEN) showed additional data from Phase 1 confirm that the combination is well-tolerated and shows anti-tumor activity; also reported positive results from the cohort expansion portion of a Phase 1 study with IL-21 and Rituxan in relapsed/refractory indolent lymphoma.

In the past investors had to wait for abstracts to be published and for presentations to be made.  It also was a situation where embargoes were used with media on releasing certain data.  Needless to say, there were many leaks on key data on who got what information when… and many profited from it.

This is only a brief summary of data from only a handful of the companies.  You can count on there being more data from many more biotech and drug companies… Floods of it.

Jon C. Ogg
May 16, 2008

Jon Ogg produces and edits the "10 Stocks Under $10" newsletter and he does not own securities in the companies he covers.

Posted on: May 16, 2008 – 7:26 am in Biotech, , , , , , , , , ,

Top 10 Pre-Market Analyst Calls (APC, FISV, IPCM, KR, RSH, RAI, SWY, SNDK, URBN, ZEP)

These are ten analyst calls we are focusing on in pre-market trading this Friday morning:

  • Anadarko Petroleum (NYSE: APC) Raised to Overweight from Equal-weight at Lehman.
  • Fiserv (NASDAQ: FISV) Raised to Market Outperform from Market Perform at JMP Securities.
  • IPC The Hospitalist (NASDAQ: IPCM) Cut to Market Perform from Outperform at Wachovia.
  • Kroger (NYSE: KR) Raised to Overweight from Equalweight at Morgan Stanley.
  • RadioShack (NYSE: RSH) Raised to Buy from Neutral at Goldman Sachs.
  • Reynolds American (NYSE: RAI)  Cut to Underweight from Neutral at JPMorgan.
  • Safeway (NYSE: SWY) Cut to Equal-weight from Overweight at Morgan Stanley.
  • SanDisk (NASDAQ: SNDK) Cut to Market Underperform from Market Perform at JMP Securities.
  • Urban Outfitters (NASDAQ: URBN) Cut to Equal-weight from Overweight at Lehman Brothers.
  • Zep (NYSE: ZEP) started as Buy at KeyBanc Capital.

Jon C. Ogg
May 16, 2008

Jon Ogg produces and edits the "10 Stocks Under $10" newsletter and he does not own securities in the companies he covers.

Posted on: May 16, 2008 – 6:37 am in Analyst Calls, , , , , , , , , ,

The Petroleum Price Problem: Guns For Oil

The balance of trade between the US and its Arab allies has taken several odd twists since the price oil began to move up sharply last year. The US buys oil at $125 a barrel. It has recently sold Saudi Arabia, Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates about $20 billion in new weapons.

While some of this guns and ammo will be used to defend borders, a part of the planes, rifles, and explosives are quietly enlisted to keep militants from overthrowing the local kingdoms.

It has been eighteen years since Iraq invaded Kuwait. The US spent several billion dollars to push Saddam out. It was an expensive few days in the desert.

Iraq is no longer a threat to the kings and their courts, but Iran is. US carrier groups in the Gulf region are a display of commitment to keep sovereign states safe from the forces of evil. Batman in a battle group.

In exchange for protecting six nation states, all of which are targets of destabilizing parties who wish to see them out of power, the US gets no increase in oil production. Crude prices, which may be the largest inflationary force in the American economy, are not falling.

All of it may be a little unbalanced.

Douglas A. McIntyre

Posted on: May 16, 2008 – 5:44 am in Oil & Gas

Goldman Sachs Pushes Up 2008 Oil Forecast To $141

Goldman Sachs (GS), king of the oil bulls, has raised its forecast for oil prices in the second half of this year to $141 from a previous estimate of $107. For those without a calculator handy, that is an increase of 32%.

The forecast does make sense no matter how unfortunate that may be. With oil at $125, it will only take modest interruption in supply caused by militias in Nigeria or mad bombers in Iraq to push the price up again.

So far, major Western nations have not been able to come up with a policy for bringing down oil prices. That may be because there is not one. That is, short of threatening to withdraw military and other aid from OPEC countries.

That may be next.

Douglas A. McIntyre

Posted on: May 16, 2008 – 5:21 am in Oil & Gas

The Oil Refiners’ New Ouija Board

Oil refiners have decided to produce more diesel and less gas. They believe that diesel is more profitable, which is true, and that demand for it will rise in developing countries, which may not be true.

Refiners have been losing money as the price of oil rises. They cannot always pass the increase on to customers. And, diesel prices are up 56% over the last year while gas in up only 20%. That makes gas production a bad deal. According to The Wall Street Journal "Diesel’s higher price means the fuel is more lucrative for refiners at a time when gasoline profits are shrinking."

Part of the thinking by refiners is that gas consumption will drop as the economy falls off. This means that they cannot push up gas prices and make more money.

Refiners now view themselves as soothsayers in hardhats. Because gas prices are still rising sharply, it is not a foregone conclusion the it will be the low margin fuel. If large refineries move production toward diesel, they cannot turn on a dime and move back to gas.

Large developed countries like China and India are underwriting the price of diesel so that it is cheap for their citizens. That keeps demand up. But, if there are economic problems in those countries and the subsidies go away, demand for diesel will dry up.

Focusing less on the gasoline market is a dangerous game as long as the price the consumer will pay keeps going up.

Douglas A. McIntyre

Posted on: May 16, 2008 – 5:03 am in Oil & Gas

Yahoo!: A New Ad Sales Model

Yahoo! (YHOO) and big global ad agency WPP will begin a marketing partnership aimed at better targeting of ads. Yahoo! will give WPP access to the thousand of independent sites on its ad network and help target messages which are allied with the behavior of the users of the sites.

The websites will get access to a broader array of WPP clients.

WPP will use software which helps identify the characteristics of the consumers who use sites on the Yahoo! network. According to The New York Times, "WPP’s clients will benefit from the extra information the agency will be able to collect about the behavior and demographic profile of people who visit sites on the Yahoo auction service."

The privacy police are likely to want to have a look at this system. It does use data from individuals and the data is very specific.

Big Brother is watching.

Douglas A. McIntyre

Posted on: May 16, 2008 – 4:47 am in Uncategorized,

American (AMR) Inspections: Gee, We Skipped Those Planes

AMR (AMR), parent of American Airlines, decided to skip inspections on certain of its airplanes due mostly to cost issues. The aircraft in question were suspected of being hit by lightening. American reasons that there has not been a crash caused by electric bolts in over 30 years. Tell that to the people who are on the next plane that crashes during an electrical storm.

According to The Wall Street Journal "American made the procedural changes and revised its maintenance manual in an effort to prevent planes from being pulled out of service."

AMR does have a hard choice. It can risk going into bankruptcy because it cannot cover all of its costs, including FAA mandated inspections, or it can risk killing its passengers. Tough call.

If the government is going to expect that airlines will follow the letter of the law, it will have to find some way to offset airline inspection costs with subsidies. Having an industry which is largely in Chapter 11 does not do the airlines or the government any good. With rising fuel prices, the next few quarters may be so bad that banks start looking at balance sheets at companies like AMR.

If airlines cannot afford safety procedures, the may just have to stiff their creditors.

Douglas A. McIntyre

Posted on: May 16, 2008 – 4:30 am in Airlines,

Media Digest 5/16/2008 Reuters, WSJ, NYTimes, FT, Bloomberg

According to Reuters, Carl Ichan will fight to get Yahoo! (YHOO) to accept Microsoft’s (MSFT) bid.

Reuters writes that the Senate has reached an agreement on a housing rescue.

Reuters reports that Warren Buffett will pul out of the RBS (RBS) insurance sale.

Reuters writes that Fannie Mae (FNM) will change its down payment policy.

Reuters reports that the Fed is seeing some healing of the credit markets.

Reuters writes that Yahoo and WPP has entered into an agreement for the ad agency to buy from the portal’s ad inventory.

The Wall Street Journal reports that the FAA is looking to why AMR (AMR) skipped certain safety inspections.

The Wall Street Journal writes that US refineries are producing more diesel because of its profit margin and demand is growing in the developing world.

The Wall Street Journal writes that an Eli Lilly (LLY) drug has been shown to slow lung cancer.

The Wall Street Journal reports that RIM (RIMM) is producing a product to compete with the Apple (AAPL) iPhone.

The Wall Street Journal writes that a home building recover is still on hold.

The Wall Street Journal writes that airline mergers are being considered riskier but United (UAUA) and US Air (LCC) are still talking.

The New York Times writes that oil moved up after a volatile session.

The FT writes that Blackstone (BX) has begun to focus on depressed assets.

Bloomberg writes that profits at British Airways almost doubled.

Bloomberg also reports the the price of rice dropped sharply as supplies increase.

Douglas A. McIntrye

Posted on: May 16, 2008 – 3:01 am in Press Digest, , , , , , , , , , ,

Asia Markets 5/16/2008 (SNP)(PTR)

Markets in Asia were mixed.

The Nikkei fell .2% to 14,219. Mitsubishi Corp rose 3.4% to 3690. NEC fell 2.4% to 538.

The Hang Seng rose .3% to 25,598. China Petroleum (SNP) rose 3..4% to 7.69. PetroChina (PTR) rose 3.4% to 11.52.

The Shanghai Composite was down .4% to 3,624.

Data from Reuters

Douglas A. McIntyre

Posted on: May 16, 2008 – 2:37 am in International Markets, ,