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Hello Readers,
Since the last Newsletter, we closed four more positions; two for gains and two for losses.
INTEGRATED SILICON SOLUTION (6/20/09). Closed position 11/9/09 at $4.28 for a 65% GAIN.
ENDEAVOUR SILVER (9/5/08). Closed position 11/9/09 at $3.40 for a 50% GAIN.
NEUROBIOLOGICAL TECH (7/5/08). Closed position 11/2/09 at 93 cents for a 34% LOSS.
ECTEL (5/5/07). Closed position 11/2/09 at $1.24 for a 64% LOSS.
Ever since picking Integrated Silicon Solution back in June, the stock, except for a minor drop in July, had pretty steady upward progress. We suspect that Endeavour Silver got a nice bump over the last few weeks due to a declining dollar and rising commodity prices. As we said in the last issue, we were soon going to close Neurobiological Technologies and ECTel, and we did just that.
As we approach Thanksgiving, the market has one person to be thankful for – the Fed Chairman. Other than zero interest rates, there is no plausible reason as to why the markets have gone on a nine-month rampage. Don’t believe for one moment that this surge has been because the economy has improved, it hasn’t. In fact, the economy has worsened. How do we know that? Why else would the Fed keep rates at zero? Those “green shoots” that Chairman Ben fondly refers to are really weeds. We get the feeling that the Fed/government hasn’t been telling us the whole story, and the sad part about this is that the financial media, for the most part, is afraid to dig up the true facts, or, more likely, their only forte is being able to read cue cards. What we are watching is another house of cards being built on top of the old house of cards. Sure, enjoy this while it last, but be very careful. Something, and we have no clue as to what, is going to set off a series of disastrous events. When? That is anyone’s guess.
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.
Tiger Logic(TIGR)(11/5/09). Recent quarterly report shows revenue drop year over year but company slices losses; balance sheet still looks good.
Dynavax(DVAX)(11/5/09). To acquire Symphony Dynamo, which will give the company about $20 million in unrestricted cash and regain all rights to its hepatitis C and cancer therapy programs.
Helicos Biosciences(HLCS)(10/20/09). Ever since we picked this last month, the stock has tanked, mainly because the company, once again, raised the idea about strategic alternatives. Now, Helicos has decided to disengage from discussing a possible sale of the company, at this time, based on what it sees as improving standalone prospects.
Qualstar(QBAK)(10/20/09). Declares 6-cent per share dividend. Latest quarterly numbers not great; balance sheet still looks good.
Avanir Pharmaceuticals(AVNR)(10/5/09). To present at Lazard healthcare conference on November 18. Posts positive Zenvia data.
Solta Medical(SLTM)(10/5/09). Posts pretty good revenue numbers, but needs to pare losses; balance sheet still looks good.
BioSante Pharmaceuticals(BPAX)(9/20/09). Recent balance sheet still shows good cash position. Coverage initiated by Rodman & Renshaw.
Adept Technology(ADEP)(9/5/09). Recent numbers show improvement over previous quarter; balance sheet still looks okay.
Evolution Petroleum(EPM)(8/20/09). Wunderlich upgrades the stock to a “buy”. Provides quarterly operations update; balance sheet still seems okay.
Anadys Pharmaceuticals(ANDS)(8/20/09). Stock upgraded by Piper Jaffray.
Occam Networks(OCNW)(8/5/09). Several news items about new products. Jefferies & Co. gives the stock a “buy”. Recent quarterly revenue numbers show slight improvement over previous quarter; balance sheet still appears strong.
Bioclinica(BIOC)(8/5/09). Recent numbers look pretty good, as does balance sheet. To host medical imaging symposium on November 18.
Salary.com(SLRY)(7/5/09). Recent numbers show revenue improvement and loss paring; balance sheet still looks good.
USA Technologies(USAT)(6/5/09). Recent numbers show improvement from a year ago; balance sheet still seems strong.
Ligand Pharmaceuticals(LGND)(2/20/09). Recent cash position still okay. Company’s JAK3 research collaboration extended by Pfizer. Ligand and Exelixis amend license deal.
SuperGen(SUPG)(2/5/09). To present at the Lazard healthcare confab on November 18 and announces presentations at the AACR-NCI-EORTC.
MakeMusic(MMUS)(1/20/09). Company posts upbeat subscription growth despite a slight loss in revenue growth; balance sheet still looks okay.
Market Leader(LEDR)(12/20/08). Launches JustListed Alliance to select real estate agents.
The Orchard(ORCD)(11/20/08). Recent numbers show year-over-year revenue growth but losses are ugly due to restructuring charges and a non-cash charge for goodwill impairment. Receives Nasdaq notice of non-compliance with minimum market value requirement.
Oilsands Quest(BQI)(10/20/08). Provides reservoir test program update.
SCM Microsystems(SCMM)(10/5/08). Establishes strategic cooperations with BiolD AG and LEGIC Identsystems.
U.S. Geothermal(HTM)(8/5/08). Key construction permit approved for its Neal Hot Springs Project.
Energy Focus(EFOI)(6/5/08). Slates earnings news for November 16, the day we post this Newsletter. Announces completion of its rights offering.
Bridgeline Software(BLSW)(6/5/08). Releases iAPPS Commerce. SavingStreet selects iAPPS Content Manager and iAPPS Analytics.
GlobalScape(GSB)(5/20/08). Recent quarterly numbers show revenue and earnings growth compared to a year ago; balance sheet still looks good.
Ziopharm Oncology(ZIOP)(5/5/08). Reports 3rdQT results and updated clinical progress. Will host an investor/analysts meeting on November 19. Stock got a nice pop when company presented positive data on its cancer drug to treat soft-tissue tumors.
Biolase Technology(BLTI)(4/5/08). Although revenue drops from a year earlier, company posts earnings; balance sheet so-so as cash position weakens.
ActivIdentity(ACTI)(3/5/08). Slates earnings call for November 19.
Amicas(AMCS)(1/20/08). Releases pretty good revenue and earnings numbers; balance sheet still looks strong. Will showcase mammography capabilities of AMICAS PAC at radiology meeting November 29 to December 4.
Hollywood Media(HOLL)(1/5/08). Recent numbers nothing to crow about; balance sheet still seems okay.
MOVE, Inc(MOVE)(1/5/08). ThinkEquity downgrades the stock as recent numbers show revenue decline; balance sheet still looks pretty good.
Continucare(CNU)(11/20/07). Posts strong revenue and earnings growth; balance sheet also still looks strong.
Nucryst Pharmaceuticals(NCST)(10/5/07). Company being bought by Smith & Nephew for about $1.77 a share. We will soon be closing this position, which is on the “Endangered List”.
American Technology(ATCO)(10/5/07). Gets $1.6 million follow-on LRAD order from U.S. Army Reserves.
XATA(XATA)(9/20/07). Brookshire Grocery chooses XATA for fleet optimization.
Pharmacyclics(PCYC)(6/20/07). Announces poster presentations and clinical update.
Endologix(ELGX)(1/20/07). To present at the Lazard healthcare conference on November 18 and at the Piper Jaffray healthcare confab on December 1.
Lantronix(LTRX)(12/5/06). Recent numbers not great but balance sheet still looks okay. To present at the Small Cap Ideas Conference on November 16, the day we post this Newsletter.
YM Biosciences(YMI)(11/5/06). Recent balance sheet looks good. Merriman gives the stock a “buy”. Reports positive Nimotuzumab four-year survival data.
RAE Systems(RAE)(10/5/05). Reports dismal quarterly numbers; balance sheet still looks good. However, we are placing this on the “Endangered List”, since stock price has really tanked over the last four months.
Our picks for this Newsletter are another small biotech trading on NASDAQ and a uranium exploration outfit listed on the AMEX
OXIGENE, INC. (NASDAQ: OXGN) – $1.28. Twelve-month hi-low has been $2.78 – 52 cents. Based in Waltham, MA, with about 30 employees, this biotech has 62.5 million shares outstanding, $21.5 million in total current assets, $22.44 million in total assets, little debt, and $13.53 million in total liabilities. Institutional ownership is around 6%. One analyst gives the stock a “strong buy”. http://www.oxigene.com
Sometimes a stock drops for no rational reason and this seems to be the case with OXiGENE, Inc. The company appears to have some promising drug candidates in its pipeline and just made an acquisition that should strengthen its business and balance sheet even further.
Founded in 1988 and trading on NASDAQ for nearly six years, Oxigene develops small-molecule therapeutics to treat cancer and eye diseases. It focuses on developing drug candidates that disrupt abnormal blood vessels, also known as Vascular Disrupting Agents, or VDAs. These VDAs are a new type of potential cancer therapy that works by collapsing the blood vessels inside of a tumor and “starving” the tumor from within. As VDAs enter the blood stream, they bind to tubulin, which is a protein found in the cells lining blood vessels. In normal blood vessels, this tubulin binding has little effect because these vessels also have a well-organized ‘scaffolding’ system to keep them intact. In abnormal cells, however, such as those found in tumors or on the retina in some eye diseases, such supports are not present and the VDA causes the cell to become round. As these cells round up, they block the flow of blood to the tumor.
Oxigene’s lead product is ZYBRESTAT, which is in a Phase II/III pivotal registration study as a potential treatment for anaplastic thyroid cancer, as well as in Phase II clinical trials for other solid tumors, including non-small cell lung cancer and platinum resistant ovarian cancer. It also develops a topical formulation of ZYBRESTAT for ophthalmologic diseases and conditions, such as age-related macular degeneration. Approximately 375 subjects have been treated with ZYBRESTAT in human clinical trials. In addition, Oxigene develops OXi4503, which is on Phase I clinical trial for solid tumors. The company has a strategic collaboration agreement with Symphony Capital Partners.
In mid-October, Oxigene announced it was acquiring VaxGen in a stock-for-merger and that the acquisition would add almost $33 million to the company’s balance sheet. VaxGen, which trades on the Bulletin Board, owns a biopharmaceutical manufacturing facility with a 1000-liter bioreactor that can be used to make cell culture or microbial products.
Oxigene is pretty typical of most small biotechs in that in makes little money and runs up piles of losses. For example, for the quarter ending 6/30/09, revenue was zilch and losses were $5.27 million.
Here’s a company with some promising drug candidates that is about to get more cash into its coffers, so, with the stock price just above a dollar, this may worth a flyer.
Our 24-month target for the stock is $2.00 to $2.25.
For more information, contact OXGN’s Michelle Edwards at 650-635-7006; medwards@OXiGENE.com
URANERZ ENERGY CORPORATION (AMEX: URZ) – $1.55. Twelve-month hi-low has been $2.50 – 40 cents. Headquartered in Vancouver, BC, Canada, with unknown number of employees, this energy exploration company has 55.5 million shares outstanding, $19 million in total current assets, $19.9 million in total assets, little debt, and $740,000 in liabilities. Institutional ownership is around 4%. Three analysts give the stock a “strong buy” and one gives it a “moderate buy”. http://www.uranerz.com
Uranerz Energy Corporation is an energy play, plain and simple. It also helps that the company has a decent balance sheet and that four analysts have “buys” on a stock that trades at about $1.50.
Founded in 1999 and trading on AMEX for almost five years, Uranerz is an exploration-stage company, which means it makes little or no money, that acquires, explores, and, if warranted, develops uranium properties. The company is mainly focused on exploring properties in the Powder River Basin of Wyoming with the objective of assessing their viability for a commercial in-situ recovery (ISR) uranium mining project. Uranerz also owns interests in properties in the Great Divide Basin area of Wyoming, in Texas, and in Saskatchewan, Canada. The company’s Powder River Basin properties include its 100% owned properties that totaled 33,972 acres as of 12/31/08; its 81% interest Arkose Mining Venture properties that totaled 90,210 acres as of 12/31/08, and additional properties that it has acquired in the Powder River Basin.
At the end of October, Uranerz closed a secondary offering of gross proceeds totaling $17 million that should shore up its balance sheet even more. Also, at around the same time, the company received an air quality permit for ISR mine construction of the Nichols Ranch Uranium ISR Project.
As we alluded above, Uranerz is a small exploration company making very little money and racking up hefty losses. For example, for the quarter ending 6/30/09, revenue was nil and losses came to $1.9 million.
Uranerz appears to have some interesting properties, and given its cash position, just may be able to bring some projects to fruition.
Our 24-month target for the stock is $2.75 to $3.00.
For more information, contact URZ at 800-689-1659.
Look for the December 5, 2009 Newsletter to be posted on 12/1 or 12/2.
Happy Thanksgiving,
George