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Hello Readers,
Since the last Newsletter, we closed four more positions; three for gains and one for a loss.
BIOLASE TECHNOLOGY (4/5/08). Closed position 3/11/11 at $4.90 for 60% GAIN.
DUSA PHARMACEUTICALS (6/5/10). Closed position 3/3/11 at $4.34 for a 100% GAIN.
IDENTIVE GROUP (10/5/08). Closed position 3/3/11 at $3.50 for a 52% GAIN.
NEUROMETRIX (3/20/10). Closed position 3/3/11 at 52 cents for a 74% LOSS.
Biolase Technology made a terrific run, finally, on pretty good revenue and earnings news. It has been quite some time since we closed a position for triple-digit gains but DUSA Pharmaceuticals provided that opportunity when the company released an eye-popping earnings release. Good financial numbers also boosted Identive Group pass our 50%-plus threshold. And, we finally gave up on Neurometrix for a sizeable loss.
For the last six to eight weeks, the markets’ direction has been dictated by world events, and, more importantly, the price of oil. We don’t see this scenario changing anytime, soon. And, yes, the recent downslide has played havoc on our Current Portfolio. Keep in mind that this market is way overdue for a correction.
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 companies on the “Endangered List” unless we feel the news to be highly significant.
Inhibitex (INHX)(3/5/11). Recent balance sheet still looks good.
AdventRx (ANX)(2/20/11). Balance sheet still looks strong.
Biodel (BIOD)(2/20/11). Accelerates development plan for ultra-rapid-acting insulins: to initiate Phase 2 in 2011 and Phase 3 pivotal trials in 2012. To present at the Roth OC Growth Stock Conference on March 16, the day we post this Newsletter.
Real Goods Solar (RSOL)(1/20/11). Reports sixth consecutive quarter of profitability; balance sheet still looks good.
Sprint Nextel (S)(1/5/11). The usual several dozen articles with the most significant being rumors of a Sprint/T-Mobil merger, which many believe is not likely. Also, of note, Sprint plans to launch the Kyocera Echo on April 17, which will be the nation’s first dual-touchscreen smartphone.
SuperGen (SUPG)(12/5/10). TheStreet.com rating’s stock model upgrades SUPG to a “buy”.
RELM Wireless (RWC)(11/5/10). FY and quarterly numbers disappointing; balance sheet still looks okay.
Inpvio Pharmaceuticals (INO)(10/20/10). Licenses non-DNA vaccine tumor therapy technology to OncoSec Medical.
ProPhase Labs (PRPH)(10/5/10). Numbers not stellar, but company claims transition phase has been successful, so far; balance sheet still looks good.
Advanced Analogic (AATI)(9/20/10). Launches small, quiet, serial, step-up LED backlight drivers for handheld devices.
Rexahn Pharmaceuticals (RNN)(7/20/10). To present at the Roth Capital OC Growth Stock confab on March 16, the day we post this Newsletter. Searches for new CEO.
Alpha Pro Tech (APT)(7/20/10). Latest numbers not great; balance sheet still looks okay. Receives multiple awards from international supply chain partner.
American CareSourcE (ANCI)(4/20/10). To release earnings on March 17.
NovaBay Pharmaceuticals (NBY)(4/20/10). Brokerage firm Wedbush initiates coverage on company. Latest balance sheet still looks okay. Will present at the Roth Growth Stock Conference on March 16, the day we post this Newsletter. Initiates Phase 2 clinical trial for treating urinary catheter blockage and encrustation.
Novavax (NVAX)(4/5/10). Awarded $179 million contract by U.S. government to develop flu vaccines.
Cerus Corp (CERS)(3/20/10). Company posts much-improved QT and FY numbers, but stock plunges because report did not meet analysts’ expectations; balance sheet still looks pretty good.
CytRx (CYTR)(1/5/10). Balance sheet still looks strong. Receives delisting notice from NASDAQ saying, in effect, that the company has six months to see its stock get back to over a dollar.
BioSante Pharmaceuticals (BPAX)(9/20/09). Closes $25.1 million offering. Pancreas cancer vaccine shows survival increase in newly published study.
Anadys Pharmaceuticals (ANDS)(8/20/09). Recent balance sheet looks strong.
U.S. Geothermal (HTM)(8/5/08). Closes $5 million financing.
Bridgeline Digital (BLIN)(6/5/08). iAPPS product suite powers website for leading distributor of upholstery and interior design fabrics.
GlobalSCAPE (GSB)(5/20/08). Releases new security and end user capabilities for Mail Express customers. Sets earnings call for March 29.
XATA Corp (XATA)(9/20/07). Signs value-added reseller agreement with SkyBitz to give fleets increased ability to track assets.
YM Biosciences (YMI)(11/5/06). JMP Securities initiates coverage on company.
Our picks for this Newsletter are a well-known nutrition company and another one of those small biotechs, both NASDAQ-listed.
JAMBA, INC. (NASDAQ: JMBA) – $2.07. Twelve-month hi-low has been $3.83 – $1.60. Located in Emeryville, CA, with about 8,000 employees, this restaurant retailer has 61.68 million shares outstanding, $46.05 million in total current assets, $100.05 million in total assets, little debt, and $72.11 million in total liabilities. Institutional ownership is around 37%. Four analysts rate the stock a “strong buy” and two have it as a “hold”. www.jambajuice.com
Admittedly, we usually steer clear of “food” stocks, but since Jamba, Inc. is a pretty recognized name with respected products, we think it may be worth a shot. Also helping our decision is their balance sheet and the fact that four analysts are very high on the stock.
Founded in 1990, and public for nearly six years, Jamba bills itself as a leading restaurant retailer of “better-for-you” food and beverage offerings, including fruit smoothies, fresh-squeezed juices, Iced Fruit Tea Infusions, Hot Blends organic tea lattes and hot teas, oatmeal made with organic steel cut oats, wraps, salads, sandwiches, California Flatbreads, and other baked good and snacks. As of last year, it operated 745 store locations, mostly in California, consisting of 458 company-owned stores and 287 franchise stores. In addition, nearly 7000 retail stores already sell Jamba All Natural Smoothies.
In mid-March, the company debuted a nutritious line of fruit and veggie smoothies. In mid-February, Jamba announced it will begin expansion of its Smoothies to the East Coast and Midwest this month, resulting in full national distribution of the product line this year. Also, the company celebrated the grand opening of its first Louisiana store in New Orleans. Earlier in February, the company formed an alliance with the national food service distributor SYGMA allowing Jamba to consolidate distribution channels and achieve greater efficiencies in their supply chains as well as position Jamba for faster expansion into new markets.
For FY2009, ending 12/31/09, revenue was $301.55 million with $24 million in losses. During the first nine months of FY2010, ending 9/30/10, revenue was $220.59 with $4.44 million in losses. Yes, revenue slipped last year, but the company seems to have taken a big hatchet to its losses.
We’re betting that Jamba’s new growth initiative will pay off down the road.
Our 24-month target for the stock is $3.75 to $4.00.
For more information, contact JMBA’s Don Duffy at 510-596-0100; investors@jambajuice.com
PLURISTEM THERAPEUTICS, INC. (NASDAQ: PSTI) – $2.32. Twelve-month hi-low has been $4.38 – 94 cents. Based in Haifa, Israel, with about 40 employees, this biotech has 41.32 million shares outstanding, $5.53 million in total current assets, $7.88 million in total assets, little debt, and $1.9 million in total liabilities. Institutional ownership is less than 1%. One analyst rates the stock a strong buy. www.pluristem.com
Not included in the above numbers for Pluristem Therapeutics, Inc. is a recent secondary offering the company closed for $38 million; so, it appears the company should be able to make some headway on its non-fetal stem cell technologies.
Founded in 2001 and public for nearly eight years, Pluristem is developing placental-derived adherent stromal cells (ACSs). The company is also involved in commercializing non-personalized, or allogeneic, cell therapy products for treating various severe degenerative, ischemic, and autoimmune disorders. Pluristem is developing a pipeline of products that are derived from human placenta, which, of course, is a non-controversial, non-embryonic, and adult stem cell source. These placental ACSs are expanded in the company’s proprietary PluriX three-dimensional bioreactor, which imitates the natural microstructure of bone marrow and does not require supplemental growth factors or other exogenous materials.
Pluristem’s principal product under Phase I clinical trial is PLX-PAD for people suffering from peripheral artery disease. Its pre-clinical products include PLX-IBD for inflammatory bowel diseases; PLX-STROKE for ischemic strokes; PLX-BMT for bone marrow transplantation; and PLX-MS for multiple sclerosis. PLX cells are immune privileged, possess immunomodulatory properties, and are expanded in vitro without showing signs of phenotypic, or karyotypic changes.
In mid-March, the company and NYU Medical Center partnered to study the use of PLX cells in treating diabetic foot ulcers.
Pluristem is pretty typical of many small biotechs in as much as it has zero revenues and some ugly losses, though, in this case, the losses are not as bad as most. For example, during the quarter ending 12/31/10, revenue was nil and losses were $2.82 million. The company has been averaging just over $2.2 million a quarter.
At some point, stem cell stocks should form their own whirlwind, and Pluristem, armed with a fresh $38 million, should catch the eddy.
Our 24-month target for the stock is $4.25 to $4.50.
For more information, contact PSTI at +972-74-7107171, ext. 131; investor.relations@pluristem.com
Look for the April 5, 2011 Newsletter to be posted on 4/1 or 4/4.
Thank you,
George