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Hello Readers,
Since the last Newsletter, we closed three positions; two for gains and one for a loss.
LEXICON PHARMACEUTICALS (9/20/08). Closed position 9/15/09 at $3.55 for a 92% GAIN.
MIND CTI (2/5/06). Closed position 9/14/09 at $1.43 for a 56% LOSS.
RETRACTABLE TECHNOLOGIES (10/20/07). Closed position 9/1/09 at $2.92 for a 56% GAIN.
Two weeks ago, Lexicon was hovering at around $1.50 and then rocketed on news that the company had successfully completed a trial in patients for its drug canidate for Type 2 Diabetes. Many times, stocks just seem to have a “sugar rush” for no apparent fundamental reasons, and that appeared to be the case with Retractable Technologies as the stock roared nearly $2 in a single day. We closed MIND CTI for a loss.
The markets should have tanked many months ago, but, as we have said periodically, stocks have soared for no reason other than the fact that the Fed has kept interest rates at zero, forcing small investors, like us, to buy way-overpriced stocks, which is really a mass suicidal bet. When this ends, and it will, it will end ugly. What will ignite the sell-off of the current “equity bubble”? Pick one of any five dozen reasons. Chances are that the trigger will be some unforeseen flaw in the financial fabric that will open up all of the other sores. But, hey, this has been a good ride for our Current Portfolio, for the most part.
Here are the headlines since the last Newsletter about companies in the Current Portfolio; dates in parentheses are when we first recommended them. We are not giving updates about stocks on the “Endangered List” unless we feel the news to be significant.
Adept Technology (ADEP)(9/5/09). Selected by leading laser converting technology partner as robotics partner. Year-end and quarterly numbers down from a year earlier but company feels it has seen bottom of downturn; balance sheet still looks good.
Evolution Petroleum (EPM)(8/20/09). To host earnings call on September 16, the day we post this Newsletter. Reports fiscal year-end 2009 reserves.
Anadys Pharmaceuticals (ANDS)(8/20/09). Commences dosing in Phase II study of ANA598 in patients chronically infected with hepatitis C (HCV).
Occam Networks (OCNW)(8/5/09). Reaches settlement in stockholder class action. Introduces new GPON ONTs that accelerate the transition to FTTP while simplifying premise networks. Announces new high-density gigabit Ethernet FTTP blade featuring highest port density in its class. Says its new VDSL2 blade features industry-leading port density in a compact package.
BioClinica (BIOC)(8/5/09). Buys CardioNow unit from Agfa Healthcare for undisclosed amount.
Salary.com (SLRY)(7/5/09). Announces new customers for its on-demand compensation, payroll, and talent management solutions.
USA Technologies (USAT)(6/5/09). Receives patent relating to its ePort Intelligent Vending product line.
Durect (DRRX)(4/20/09). Raises $10 million in private placement.
TheStreet.com (TSCM)(4/5/09). Announces quarterly cash dividend.
SuperGen (SUPG)(2/5/09). To present at the NewsMakers in the Biotech Industry investment confab on September 16, the day we post this Newsletter.
MakeMusic (MMUS)(1/20/09). Big Phat Band titles added to SmartMusic. Updates SongWriter and PrintMusic. SmartMusic subscriptions as of August up 22% over the prior year.
Market Leader (LEDR)(12/20/08). RealtyGenerator to be offered to “Leading Real Estate Companies of the World’s” more than 5000 offices consisting of more than 600 real estate companies.
Oilsands Quest (BQI)(10/20/08). Files 10Q report and updates reservoir program.
Endeavour Silver (EXK)(9/5/08). Drills new high grade silver-gold discovery on recently acquired Porvenir Cuatro property in Guanacevi District, Durango, Mexico.
ICAgen (ICGN)(8/5/08). Stock gets a pop as asthma drug shows promise in mid-stage study.
U.S. Geothermal (HTM)(8/5/08). U.S. Department of Energy finalizes award grant for Raft River EGS program that now totals up to $10.21 million, with DOE providing up to 70% as part of the cost-sharing arrangement.
Energy Focus (EFOI)(6/5/08). Announces $3.5 million rights offering.
Bridgeline Software (BLSW)(6/5/08). iAPPS Content Manager and iAPPS Analytics chosen by worldwide distributor to electronics industry.
Microvision (MVIS)(5/20/08). Announces commercial launch of SHOW WX Laser Pico projector.
GlobalSCAPE (GSB)(5/20/08). Joins small business partner programs.
Ziopharm Oncology (ZIOP)(5/5/08). Announces at market private placement of $5.05 million.
Santarus (SNTS)(11/20/07). To present at UBS Global Life Sciences confab on September 22.
Continucare (CNU)(11/20/07). Releases some pretty good 4thQT and FY numbers; balance sheet still looks good.
Pharmacyclics (PCYC)(6/20/07). To host earnings call on September 17.
Xenonics (XNN)(6/5/07). Awarded $2 million IDIQ contract by U.S. Army.
Oncolytics Biotech (ONCY)(6/5/07). Issued 32nd U.S. patent. Encorium Group (ENCO)(5/20/07). Stock was at 20 cents and is on the “Endangered List”, but got a nice jump when it won $8.7 million in vaccine contracts, including a swine flu vaccine win.
Lantronix (LTRX)(12/5/06). Company pares its losses as top line growth wanes; balance sheet still looks good.
The Inventure Group (SNAK)(3/5/06). To present at the Canaccord Adams Healthy Living confab on September 23.
8×8 (EGHT)(1/20/06). Announces availability of IP business phones at 400 select OfficeMax outlets. Adds new “Virtual Meeting” Web conferencing solution to its business service offerings.
RAE Systems (RAE)(10/5/05). Introduces additional wireless MeshGuard monitors.
Nova Measuring (NVMI)(11/5/04). Announces acceptance for additional stand alone system from new memory customer.
Our picks for this Newsletter are another NASDAQ-traded biotech and a brokerage firm listed on the AMEX.
BIOSANTE PHARMACEUTICALS, INC. (NASDAQ: BPAX) – $1.88. Twelve-month hi-low has been $5.50 – 81 cents. Based in Lincolnshire, IL with about 25 employees, this biotech has 27.4 million shares outstanding, $7.73 million in total current assets, $9.52 million in total assets, little debt, and $3.72 million in total liabilities. Institutional ownership is around 4%. www.biosantepharma.com
Despite the fact that BioSante Pharmaceuticals, Inc. has a number of promising drug candidates for sexual needs, this is basically a swine flu play; it is estimated that nearly half of the U.S. population could catch this over the next six months. We should also note that the company recently completed a $12 million financing, which is not included in the above numbers.
Founded in 1996, and public for nearly nine years, BioSante develops products for female sexual health, menopause, contraception, and male hypogonadism. It also develops products for calcium phosphate nanotechnology (CaP) for aesthetic medicine, novel vaccines, and drug delivery. The company’s products include LibiGel, a transdermal testosterone gel in Phase III development for treating female sexual dysfunction; Elestrin, a transdermal estrodiol (estrogen) gel for treating moderate to severe vasomotor symptoms associated with menopause; Bio-T Gel, a transdermal testosterone gel in development for treating hypogonadism, or testosterone deficiency in men; and the Pill-Plus for treating female sexual dysfunction in women using oral or transdermal contraceptives.
BioSante’s CaP products in development comprise BioLook, which is a facial line filler; BioVant for treating viral and bacterial infections and autoimmune diseases; BioOral, a delivery system using CaP technology for oral/buccal/intranasal administration of proteins and other therapies; and BioAir, a delivery system using CaP technology for inhalable versions of proteins and other therapies. At the end of June, the company bought Cell Genesys for $38 million in stock. This has allowed BioSante to add the GVAX immunotherapies to its arsenal; these are targeted at certain cancers.
Over the last month or two, BioSante raised some eyebrows when it announced that BioVant increased the protective effect of vaccines for multiple flu strains, including a potential new vaccine against H1N1, or swine flu, which resulted in 100% protection from symptoms of illness, including weight loss, and death in animal studies.
BioSante is like most small biotechs in that it garners little revenue and piles up some pretty hefty losses. For example, for the quarter ending 6/30/09, revenue was $115,000 with $4.62 million in losses.
The company has a lot of “buzz” stuff in the hopper, and positive news about any of its candidates, especially BioVant, could give the stock a nice pop.
Our 24-month target for the stock is $3.25 to $3.75.
For more information, contact BPAX’s Phillip Donenberg at 847-478-0500, ext. 101; pdonenberg@biosantepharma.com
INVESTORS CAPITAL HOLDINGS LTD. (AMEX: ICH) – $1.95. Twelve-month hi-low has been $5.60 – 85 cents. Based in Lynnfield, MA, with about 65 employees (700 independent brokers nationwide), this brokerage firm has 6.6 million shares outstanding, $13.14 million in total current assets, $17.09 million in total assets, and $7.37 million in total liabilities, of which $669,000 is long-term liability. Institutional ownership is around 4%. www.investorscapital.comOver the years, we have added several brokerage firms to the Current Portfolio and most of them have worked out. Yes, they can be roller coaster rides, as has been Investors Capital Holdings Ltd., but, during wild market swings, they can make money.
Founded 1995, and public for nearly eight years, Investors Capital, through its subsidiaries, provides broker-dealer services that support trading and investing in stocks, bonds, U.S. government securities, municipal bonds, mutual funds, variable annuities, and variable life insurance, including Internet trading, market advice, portfolio tracking facilities, and records management.
For the FY ending 3/31/09, revenue was $81.6 million with $1.8 million in losses compared to the previous FY revenues of $90.98 million and $661,000 in losses. During the 1stQT of the current FY, ending 6/30/09, revenue was $18.61 million with $51,536 in earnings.
This is pretty basic stuff. There is not much to say except that ICH could keep seeing good numbers, since wild markets are usually good for brokerage firms.
Our 24-month target for the stock is $3.25 to $3.50.
For more information, contact ICH’s Robert Foney at 781-477-4814; rfoney@investorscapital.com
Look for the October 5, 2009 Newsletter to be posted on 10/1 or 10/2.
Thank you,
George