Winning Stocks on a Down Week (ADY, BCRX, DDRX, DGI, FAZ, LORL, RHT, WX)
This was a week of profit taking and a probable realization that a move of 30% and more from the lows in March was probably a bit much in the face of only consistent “less-bad” economic data. But as every optimist says, “There is always a bull market somewhere.” We saw a drop of about -3.6% to 8,268.64, while the S&P 500 Index slid by -4.% to 882.88. The NASDAQ was the ‘better’ of the losers with a drop of -3.4% to 1,680.14. But there are many standout stocks, and some of the key big movers and winners this week were American Dairy Inc. (NYSE: ADY), Biocryst Pharmaceuticals Inc. (NASDAQ: BCRX), Diedrich Coffee Inc. (NASDAQ: DDRX), DigitalGlobe, Inc. (NYSE: DGI), Direxion Daily Financial Bear 3X Shares (NYSE: FAZ), Loral Space & Communications, Inc. (NASDAQ: LORL), Red Hat Inc. (NYSE: RHT) and WuXi PharmaTech Inc. (NYSE: WX).
Believe it or not, some of these are up exponentially off of the lows. One is up 30-fold from the end of March, and amazingly the best winners were not in tech or biotech. We have provided a weekly synopsis and the reason for their from the lows.
American Dairy Inc. (NYSE: ADY) is one that many have not even heard of as a stock for the annals of winners. Yet Friday’s 54% gain to $28.48 made it the biggest winner of the day of all listed stocks, and the shares finished up 62% for the week. On a year-over-year basis, sales rose a sharp 191%, income from operations rose by 523%, and net income rose by 282%. The company is a producer and distributor of premium infant formula, milk powder and soybean, rice and walnut products in China. That is a new 52-week high, and up about 250% from its lows of the year.
Biocryst Pharmaceuticals Inc. (NASDAQ: BCRX) rose 31% to $3.19 on heavy volume of more than 2.6 million shares on news of an ASCO pre-presentation abstract showing positive Phase II results from its clinical trial for forodesine in the treatment of cutaneous T-cell lymphoma. Because of heavy selling on Monday after disappointing flu drug news, BioCryst was ‘only’ up 8% for the week from the $2.95 close the prior Friday and this essentially took the stock back to last week’s highs. As a reminder, this was one of the speculative swine flu stocks, and its stock has come way off of the levels after the Swine Flu hit Mexico and then the U.S.
Diedrich Coffee Inc. (NASDAQ: DDRX) is coming back from the dead. Shares were only up 2.7% to $12.91 Friday, but this was up 30% from the prior Friday. You better be sitting down when we tell you this. Diedrich was a $0.42 stock at the end of March. The company has completed its transition to a premier coffee roaster and wholesaler that recently sold its Gloria Jean’s franchise operations. This is enough to make a man cry, but this stock is up over 30-fold since the end of March.
DigitalGlobe, Inc. (NYSE: DGI) completed its IPO this week. The first early huge gains did not hold, but the IPO did close the week up in positive territory. The IPO priced at $19.00, which is over 10% above the mid-point of the expected $16 to $18 expected price range. At $20.50 after a 4% drop, and even after seeing some initial prints at $25.00, we are welcoming this one as one of the week’s key winners. Digital imaging from satellites that powers defense agencies, oil and mining, and even Google, that is good enough considering how few IPO’s we have had in the last six months.
Maybe it takes a ‘triple-leverage inverse ETF’ to win when the banks and financials spend the week doing massive amounts of secondary offerings after huge recoveries from the March lows. The Direxion Daily Financial Bear 3X Shares (NYSE: FAZ) was the winner for that move, and it had the volume to prove it. This gained less than 6% on Friday to close at $5.90 for the week, but that is up over 30% for the week from a prior Friday close of $4.49.
Loral Space & Communications, Inc. (NASDAQ: LORL) hit a new 52-week high on Friday after closing up only 3%, yet shares finished up over 22% for the week and shares are up some 150% over the last two months. The company’s earnings this week were no major standout, but as the company CEO said, “We are buoyed by the steady overall industry demand, despite the economic climate… The strong backlogs at both Telesat and SS/L will continue to support our progress toward creating long term shareholder value.” Space, the Final Frontier.
Red Hat Inc. (NYSE: RHT) was almost a stealth stock. On Friday, its shares rose by a sharp 9.6% to $19.86 after Jefferies reiterated a the stock with a Buy rating and lifted the target to $21.00. There has been speculation that IBM or Oracle or another player may want to buy the Linux software suite seller. After a $17.60 close the week before, Red Hat was up almost 13% for the week and is up almost 200% from its 52-week lows.
WuXi Pharma Tec (NYSE: WX) was a total screamer. You might even be able to say that the Chinese dug, biotech, and medical outsourcing company is coming back from the grave based on its performance. Earnings were good enough despite a drop, yet two analysts upgrades exacerbated the move. Shares rose over 40% Friday to end at $7.98, making this one up roughly 33% for the week.
JON C. OGG
May 16, 2009