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Hello Readers,
Since the last Newsletter, we have closed three positions; two for some nice gains and one for a loss.
STAKTEK HOLDINGS (9/5/05). Closed position 11/29/05 at $6.05 for a 86% GAIN.
OPTICAL COMMUNICATION (4/20/05). position 11/25/05 at $2.43 for a 50% GAIN.
AVANEX (7/20/04). Closed position 11/25/05 at 72¢ for a 78% LOSS.
Ever since mid last month, Staktek had been on a tear, and the major impetus could either be from momentum players or fund managers.Optical Communication posted some pretty decent quarterly numbers, and this may have juiced the stock. As for Avanex, we have just lost hope.
Our feelings about the markets are as they have been for the last month or two – very, very bullish. Barring a major calamity or the Fed going way overboard, we’re expecting a nice run-up over the next six months, or so.
Here are the headlines since the last Newsletter about companies in the Current Portfolio. Dates in parentheses are when we first recommended them.
Napster (NAPS) (11/20/05). Launches XM + Napster integrated music service with XM Satellite Radio.
NEON Systems (NEON) (11/20/05). Delivers real-time business intelligence mainframe integration on Oracle Warehouse Builder.
IONA Technologies (IONA) (11/5/05). Completes BEA validation program.
Cognitronics (CGN) (10/20/05). Completes acquisition of ThinkEngine Networks.
Westell ((WSTL) (10/20/05). International trade association names Conference Plus for global conferencing services.
Discovery Partners ((DPII) (10/5/05). We thought the stock would have been massacred after DPII terminated the new collaboration talks with Pfizer, since it means a loss of revenue and a restructuring. Yes, the stock fell a little, and could get lower, however, aiding DPII is a pretty strong-looking balance sheet. Let’s just hope the cash isn’t eaten up by legal fees.
EntreMed (ENMD) (9/5/05). FDA accepts IND application for company’s lead cancer drug candidate Panzem NCD.
CDC Corp (CHINA) (7/20/05). Posts slimmer 3rd QT loss and a 31% revenue jump, compared to same time last year. Vantage Credit Union selects Pivotal Financial Services.
Sirenza Microdevices ((SMDI) (6/5/05). Announces production release of CATV RF tuner/transmitter.
Exact Sciences (EXAS) (5/20/05). To Webcast presentation at investor forum on December 7.
Verticalnet (VERT) (4/5/05). Files Form 8-K sale of equity. Named to Software Magazine’s 23rd Annual Software 500.
Loudeye (LOUD) (4/5/05). To support Intel Viiv technology platform initiatives for mobile, PC, and home entertainment experiences. Appoints new CFO.
Mindspeed (MSPD) (2/20/05). To present at Lehman technology confab on December 7 and at CSFB’s on December 1, the day this Newsletter is posted.
B.O.S. (BOSC) (1/5/05). Quarterly net loss steeper than most would like; balance sheet still seems fair.
Vion Pharma (VION) (5/20/05). Recent balance sheet looks very healthy.
Net2Phone (NTOP) (11/5/04). Board committee has no opinion on IDT’s latest takeover offer, which to us still seems like a steal. Receives $18.8 million from European cable operator. Earnings call set for December 7.
IGATE (IGTE) (10/20/04). Sells Canadian staffing unit for $11 million.
Loudeye (LOUD) (4/5/05). Although revenues are increasing, losses are getting wider; balance sheet still seems okay. This is making us nervous.
Chordiant Software (CHRD) (9/20/04). Sets 4th QT and year-end earnings call for December 6.
Tripath (TRPH) (8/5/04). Sets earnings release for December 1, the day this Newsletter is posted. This is on the “Endangered List”.
Aixtron ((AIXG) (7/5/04). Says Huga Optotech expands with a Thomas Swan CCS system and that a Taiwan university has also selected one.
Glowpoint (GLOW.PK) (5/20/04). Sony and GLOW launch free, unlimited use video plus voice service for consumers. This is on the “Endangered List” but has shown some iotas of life, lately.
Palatin (PTN) (4/5/04). The stock, which had been in the doldrums, got a nice lift probably due to a mention in Barron’s.
Socket Communications (SCKT) (3/20/04). Says its Strategic Vertical Integrator (SVI) program has expanded 30% in six months.
OpenTV (OPTV) (3/20/04). Ferris Baker Watts gives a “buy” signal on the stock.
Trikon (TRKN) (10/5/04). Quarterly numbers don’t seem too bad; balance sheet appears good. Sets December 1 vote on merger transaction with Aviza.
Crossroads Systems (CRDS) (2/5/04). Disappointing revenue numbers drop the stock even more, balance sheet still looks good. This is now a “wait and see” situation. Delivers library resource management for Sun tape libraries.
Actuate (ACTU) (1/5/04). Ranked number 66 by FinTech as a top 100 provider of financial technology. Adds first spreadsheet application platform to financial performance management solution.
AVANT Immuno ((AVAN) (12/5/03). Will present at investor confab on December 7.
Art Technology (ARTG) (8/5/03). American Eagle Outfitters launch e-commerce site powered by ARTG.
Our picks for this Newsletter are a provider of services to the health care industry and a telecom provider.
BIO-IMAGING TECHNOLOGIES, INC. (NASDAQ: BITI) – $2.51. Twelve-month hi-low has been $5.80 – $2.10. Based in Newtown, PA, with about 265 employees, this health services company has 11.1 million shares outstanding, $17.39 million in total current assets, $27.54 million in total assets, and $10.1 million in total liabilities, of which $654,000 is long-term debt. Institutional ownership is around 43%. One analyst has the stock as a “hold”. http://www.bioimaging.com
Sometimes we pick a company that may not be at all sexy, but apparently has withstood the test of time. Such is the case with Bio-Imaging Technologies, Inc.
Founded nearly 15 years ago, and trading on NASDAQ since 1992, Bio-Imaging is a global pharmaceutical contract service organization that operates through two divisions, Pharmaceutical Services and CapMed. The Pharmaceutical Services arm supports product development processes in the pharma, biotech, and medical device industries. It assists clients in designing and managing the medical imaging component of clinical trials for all modalities, which consist of computerized tomography (CT), MRIs, X-rays, dual energy x-ray absorptiometry, positron emission tomography, single photon emission CT, quantitative coronary angiography, cardiac MRI and CT, intravascular ultrasound, peripheral quantitative angiography and ultrasound. This division also provides the processing and analysis of medical images, as well as the data-basing and regulatory submission of medical images, quantitative data, and text. It also offers a service for certifying medical staff for medical imaging equipment.
BITI’s CapMed division offers what is known as Personal Health Record (PHR) software and the patent-pending Personal HealthKey technology. PHR allows users to manage and store personal health information, including their medical images on their desktop computer, while linking directly to sponsor-directed resources, such as drug information, patient education, or disease guidelines. Over the last several months, CapMed landed some pretty nice business from major medical facilities in Delaware and Las Vegas.
In October, BITI established a collaborative working agreement with the Society of Nuclear Medicine for setting up multicenter clinical trial capabilities and educational programs. For FY2004, ending 12/31/04, revenue was $29.61 million with $949,000 in net income. During the first nine months of FY2005, ending 9/30/05, revenue was $21.8 million with $2.24 million in losses. Although this FY has not been all that was hoped, management feels profitability is soon possible due to a record backlog of $55.2 million, a 43% increase from the beginning of the year.
BITI appears to be on the verge of seeing black ink, once again.
Our 24-month target for the stock is $5.00 to $5.50.
For more information, call BITI’s Mark Weinstein at 267-757-3000; IR@Bioimaging.com
FUSION TELECOMMUNICATIONS INT’L, INC. (AMEX: FSN) – $2.60. Twelve-month hi-low has been $8.20 – $2.35. Located in New York City, with about 55 employees, this communications provider has 26.9 million shares outstanding, $20.95 million in total current assets, $32.6 million in total assets, and $12 million in total liabilities. Institutional ownership is less than 1%. http://www.fusiontel.com
Many small telecom stocks have been somewhat lifeless, lately, which forces us to ask if this is the tail-end of a cycle? So, hoping we get an answer, soon, Fusion Technologies Int’l., Inc. is added to the portfolio.
Founded in 1997, and recently public on NASDAQ, Fusion provides voice over Internet protocol (VoIP) and other Internet services in Asia, the Middle East, Africa, the Caribbean, and Latin America. For those who are unfamiliar, VoIP lets customers place voice calls worldwide using their PC, Internet protocol phone, or regular telephone when accompanied by a hardware device. FSN offers these services mainly to corporations, postal telephone and telegraph companies, international carriers, government entities, ISPs, and consumers. The company also has InterView, which provides personal desktop video conferencing and instant messaging from a laptop or PC worldwide.
Fusion also offers managed end-to-end networks that connect multinational corporations or government facilities in emerging markets with locations in other countries. These services are primarily offered to software developers, call centers, and telemarketers. Additionally, the company provides Internet video conferencing and co-location services; Internet connectivity services; and point-to-point private lines, virtual private networking, and call center communications services. FSN sells through its sales force, agents, partnerships, and strategic alliances. It currently provides services to customers in over 45 countries.
Fusion has not been shy about growing through acquisitions. Last month, the company agreed to acquire the assets of iFreedom Communications, which markets recurring international VoIP in Hong Kong, Malaysia, the Philippines, the UK, and the U.S. In April, FSN bought a 75% interest in a Turkish telecommunications carrier. Also, the company recently achieved operational status in Jamaica with Fusion Jamaica.
Fusion appears to have many options for future customers. The bet here is that the company will put its IPO money to good marketing use.
Our 24-month target for the stock is $4.75 to $5.25.
For more information, contact FSN at 212-972-2000; info@fusiontel.com
Look for the December 20, 2005 Newsletter to be posted on 12/16 or 12/19.
Thank you,
George