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Hello Readers,
We didn’t close any positions since the last Newsletter, and, given the market’s slump, it shouldn’t come as a big surprise. We still think that the current sell off is healthy and is setting the stage for another run up, however, some worries need to abate, namely the geopolitical concerns. It would be nice if Iraq began to calm a little. Also, we would like to see energy prices fall somewhat, and, if the Fed is going to raise rates before election day, please let them do it soon and get it cover with.
Here are the headlines since the last Newsletter about companies in the Current Portfolio. Dates in parentheses are when we first recommended them.
CE Franklin (CFK) (5/5/01). Stock gets a little boost on positive earnings news. Sells its 50% interest in Brittania Industries.
Arotech (ARTX) (6/5/01). Over the last ten days, this one has jumped nearly $1.70 as millions of shares have traded daily. Company released some more news about new contracts, but the real frenzy has been that ARTX is part of the “”hot security sector”.
VASCO Security (VDSI) (2/5/02). Launches Digipass 585.
Generex (GNBT) (8/5/02). Reports significant advance in cancer immunotherapy based upon boosting T Helper cell responses by novel mechanism.
Cryo-Cell (CCEL) (5/5/03). Releases 1st QT numbers with an upbeat spin.
Art Technology (ARTG) (8/5/03). French ministry chooses ATG solutions for overhaul of its intranet system.
Targeted Genetics (TGEN) (10/5/03). Concludes joint venture relationship with Elan.
Trio-Tech (TRT) (10/20/03). Agrees to buy certain assets of Malaysian company TS Matrix GHD for about $1 million.
Insmed (INSM) (11/5/03). Acquires manufacturing facility from Baxter Int’l.
AVANT Immuno (AVAN) (12/5/03). Announces complement inhibition license with Adprotech. SatCon (SATC) (12/5/03). Books over $3 million in new contracts.
Actuate (ACTU) (1/5/04). Launches reseller partner program.
Crossroads Systems (CRDS) (2/5/04). Delivers “Intelligence at the Edge” for midrange tape libraries. Announces new offering in its Storage Router product family. Demonstrates storage utilization and management technologies.
Analysts Intl (ANLY) (2/5/04). Says 1st QT revenues and EPS will be higher than previously estimated.
Transgene (TRGNY) (3/5/04). Presents data suggesting significant opportunities for anti-cancer immunotherpy Ad-IL2 product candidate for melanoma and other solid tumors.
OpenTV (OPTV) (3/20/04). Buzztime and DISH partner to launch premium multiplayer trivia game service.
Not a lot of updates for this issue, but PLEASE NOTE that a slew of our picks have scheduled earning releases on April 21 or April 22. We’ll let you know the highlights, or the lowlights, in the next Newsletter.
Our picks for this issue are another biotech/drug developer and a consultant provider.
AVI BIOPHARMA, INC. (NASDAQ: AVII) – $3.10. Twelve-month hi-low has been $7.48 – $2.70. Located in Portland, OR, with about 100 employees, this drug developer has 36.1 million shares outstanding, $38.39 million in total current assets, $47.1 million in total assets, little debt, and $3.76 million in total liabilities. Institutional ownership is around 24%. One analyst rates the stock a “strong sell”. http://www.antivirals.com
Put this one in the biotech category, and, no, we do not know why an analyst rates AVI BioPharma, Inc. a ‘strong sell’, since the company has what some would call a boatload of money and a ton of patents.
Trading on NASDAQ for nearly seven years, AVII develops drugs to treat various diseases by using what are known as third-generation antisense technology and cancer vaccines. Its two main drug candidates are NeuGene antisense and Avicine cancer vaccine. To date, AVII has 138 U.S. and foreign patents issued, allowed, and licensed.
So far, the company has completed nine clinical trials with NeuGene antisense drugs in more than 240 subjects addressing cancer, polycystic kidney disease, drug metabolism, and cardiovascular restenosis, which is their most advanced program. AVII has completed Phase II trials evaluating their antisense drug Reston-NG and expects to begin a Phase III study this year. These NeuGene drug candidates have also shown antiviral activity in preclinical and field trials against such viruses as hepatitis C, calicivirus, West Nile, and SARS.
Avicine has been evaluated in six clinical trials in a variety of cancer indications. AVII expects to begin an additional Phase II study evaluating this drug candidate in certain pancreatic cancer patients.
AVII has strategic alliances with Exelixis, DepoMed, VTL Biopharma, Medtronic, SuperGen, and Abgenix.
A few weeks ago, AVII presented positive results demonstrating the success of its NeuGene antisense compounds in two novel targeting approaches to cancer. Then, a month ago, the company announced positive results from a clinical study evaluating the oral administration of one of its NeuGene antisense drugs.
AVI BioPharma is typical of a small biotech in that it is light on revenue and heavy on losses. For FY2003, ending 12/31/03, revenue was $969,866 with $14.6 million in losses. The company recently received a new round of financing, which should be reflected in the new balance sheet and it has a “ton” of patents. Plus, it is getting some positive results, lately, from some of its technologies; usually a good sign.
Our 24-month target for the stock is $6.00 to $7.50.
For more information, contact AVII’s Michael Hubbard at 503-227-0554; hubbard@avibio.com
THE MANAGEMENT NETWORK GROUP, INC. (NASDAQ: TMNG) – $3.44. Twelve-month hi-low has been $5.62 – $1.20. Based in Overland Park, KS, with about 250 employees, this services provider has 33.6 million shares outstanding, $63 million in total current assets, $86.5 million in total assets, little debt, and $8.6 million in total liabilities. Institutional ownership is around 57%. One analyst rates the stock a “strong buy” and another as a “moderate buy”. http://www.tmng.com
A few months back, we recommended Analysts Int’l., and, for similar reasons, we are adding The Management Network Group, Inc. to the Current Portfolio. TMNG has a good balance sheet and should prosper if tech companies and telecoms can maintain their new-found resurrection. Founded in 1990 and trading on NASDAQ for over four years, TMNG provides strategy, management, marketing, operational, and technology consulting services to the communications industry, technology companies, and financial services firms located mainly in North America and Western Europe, but services almost all international markets. With over 550 consultants worldwide and located in about a dozen offices, the company basically operates through four subsidiaries, namely TMNG Marketing, TMNG Technologies, TMNG Strategy, and TMNG Europe.
TMNG has performed services for more than 600 clients, including nearly all of the Fortune 500 telecoms. Others include such notables as American Express, Apple, Microsoft, Goldman Sachs, Citibank, Oracle, and Morgan Stanley.
Several weeks ago, TMNG partnered with NetCentrex for VoIP deployments. The company will provide integration, deployment, and project management services for the NetCentrex IPlay3 solution.
For the FY ending 1/3/04, revenue was $23.47 million with $37.74 million in losses compared to the previous year revenues of $34.59 million and $23.4 million in losses.
TMNG has a very good-looking balance sheet and should do much better revenue-wise as the economy keeps improving.
Our 24-month target for the stock is $6.50 to $7.50.
For more information, contact TMNG at 913-345-9315.
Look for the May 5, 2004 issue to be posted on 5/4 or 5/5.
Thank you,
George