The Unusual Suspects (AMAG, AAPL, BIDU, DENN, APD, ARG, MU, GILD, XNPT)

This past week was filled with many surprises and earnings are still coming on strong.  We wanted to look at some companies that either have unfinished business or are on deck with pending news this coming week for our review of the Unusual Suspects.  AMAG Pharmaceuticals, Inc. (NASDAQ: AMAG) has a rebuttal, Apple Inc. (NASDAQ: AAPL) needs to be watched like a hawk over the chart, Baidu, Inc. (NASDAQ: BIDU) is on deck with earnings, and Denny’s Corp. (NASDAQ: DENN) is another Super Bowl play.  We have two issues in M&A with Airgas Inc. (NYSE: ARG) and then potentially in Micron Technology Inc. (NASDAQ: MU).  And we have FDA events pending in Gilead Sciences Inc. (NASDAQ: GILD) and in XenoPort, Inc. (Nasdaq: XNPT).

We have compiled details on each stock with certain expectations and relevant data on each.

AMAG Pharmaceuticals, Inc. (NASDAQ: AMAG) was hit very hard with shares going from $45 to $35 before a late Friday recovery.  The drop was due to a boutique analyst cutting the stock over concerns that Feraheme patients are being hospitalized with severe allergic reaction events.  After the close on Friday the company defended itself showing that the risks here are very low and may not be any different than previously thought.   Shares closed at $37.77 but were up at $39 on almost 100,000 shares in the after-hours session.

Apple Inc. (NASDAQ: AAPL) is going to be one to watch this week, if for no other reason than its stock chart.  Late in January, just as in December, Google fell under the 50-day moving average.  We are looking for some resolution here because it is at a classic right side of a head and shoulders pattern yet again.  By Wednesday the stock will have spent close to the same number of days as in the past before challenging that 50-Day moving average.  In short, Apple will need to rise or more technicians are going to join in the call from our affiliate Adam Hewison looking for $182 or much lower.  On the valuation front, Apple is still #5 on our own Real-Time 500 measuring companies by free market capitalization at $177+ billion.

Baidu, Inc. (NASDAQ: BIDU) is on deck with earnings this week, and we are going to get to hear  from the Chinese search giant about just how much Google’s China-War is helping the company.  This stock closed up 1.8% on Friday at $448.80 and that was almost $10 off its lows of the day.  was up ahead of next week’s earnings, so maybe China’s loan halts are not affecting quite everyone.  Shares were up 1.85% at $449.00 right before the close.  For such a bad week in the market, Baidu closed up 9% this week.  This is the one to watch for earnings movers this week, and we’d expect those light volume days of stock options to get more active.  The estimates today are $1.68 EPS and $180 million in revenues, although this also marks its fiscal-2009 report.

Denny’s Corp. (NASDAQ: DENN) was a mystery move on Friday with a 5.8% gain to $2.54.  Some are betting that the casual dining chain will be a winner from its Super Bowl advertisement this year.  It is just as easy to show that it is a waste of money considering its low cash and declining sales.  There is one other issue, and that is that in late-January Oak Street Capital Management, Soundpost Advisors, and Lyrical Partners formed a joint filing group collectively owning 4,850,943 shares, about 5.02%.  At the time, they did not have any plans or proposals for ‘Lenny’s.’

In the Land of M&A, we have to watch this Air Products & Chemicals Inc. (NYSE: APD) $60 cash buyout of Airgas Inc. (NYSE: ARG).  ARG closed at $60.96 and traded as high as $62.82 because the company had already turned down higher offers from the company.  Jefferies believes a higher deal price is very likely, and $68 was not ruled out in that analysis.  Our own math looks more like a $65 buyout price, market conditions permitting.

There is another deal to ‘potentially watch for’ from Micron Technology Inc. (NASDAQ: MU).  Last week’s rumor mill has the DRAM giant considering making a play for Numonyx, which is the flash memory spin-off of Intel Corp. (NASDAQ: INTC) and STMicroelectronics (NYSE: STM) formed in 2008.  Micron has been in a state of change for some time, and it might make sense to double its efforts away from mostly DRAM.

Gilead Sciences Inc. (NASDAQ: GILD) has two issues on deck this coming week.   The company has a presentation at BIO CEO on February 9 and there is a pending February 13 date for a FDA decision on its Cayston antibiotic for cystic fibrosis.  This stock has been very quiet over the last two years and at $46.38 it is in the middle of its $40.62 to $53.03 trading range over the last 52-weeks. With many products on the market and a $41 billion market cap, it takes a lot to move the needle here… just do not bother telling that to those who made big options bets on Friday in the Feb-2010 CALLS: $47 saw 15,464 contracts trade versus an open interest of 8,084 contracts; the $49 strike saw 16,371 contracts trade versus an open interest of 9,238 contracts.

XenoPort, Inc. (Nasdaq: XNPT) has a February 9 FDA decision date for its GSK1838262/XP13512 a.k.a. Horizant treatment for moderate-to-severe primary restless legs syndrome with partner GlaxoSmithKline (NYSE: GSK).  This is a big deal, although it is far from a final resolution.  Options have traded based on this event.  Keep in mind that GSK is a risk now because it has told the company that it is proposing to cease discovery research in certain neuroscience areas, including depression and pain and will disclose this development plan at a future date.  Full details and background at at BioHealthInvestor.com.

You are invited to join our free daily email distribution list to hear about top analyst upgrades and downgrades, IPOs and secondary offerings, ongoing day trader and options trader alerts, stock and market rumors, Buffett and guru investor news, M&A and more.

JON C. OGG