***We no longer follow the companies mentioned in these backdated newsletter issues. These samples of past newsletters are generated to give you an idea of what you can expect when you subscribe. Please do not use any of the information contained in the samples below as current advice. If you would like to purchase a newsletter subscription, please click here. ***
Hello Readers,
Since the last Newsletter, we closed three more positions; two for gains and one for a loss.
AMICAS (1/20/08). Closed position 11/27/09 at $4.72 for a 65% GAIN.
EVOLUTION PETROLEUM (8/20/09). Closed position 11/17/09 at $4.48 for a 52% GAIN.
NUCRYST PHARMA (10/5/07). Closed position 11/17/09 at $1.76 for a 42% LOSS.
Amicas went on a nice run after reporting decent numbers earlier in November, and we are happy with a 65% gain. Ever since picking Evolution Petroleum back in August, the stock enjoyed a steady uptick probably buoyed by an upbeat quarterly report and rising commodity prices. In the last Newsletter, we mentioned that Nucryst was acquired and that we would soon close the position.
As we write this Newsletter, the markets are trying to digest the Dubai Debt Crisis. Most of the gurus have been saying that this is an isolated incident and not to worry, but is it? When “experts” tell us not to worry, we sweat. Dubai’s problems were triggered by an overload of commercial real estate debt, which we know is a major overhang in the U.S. and much of the developed world. Is Dubai the Paul Revere of the next major bubble? Honestly, we don’t know, but this is a sobering wake up call that all is not right on the planet. Once again, we urge extreme caution.
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 substantial.
OXiGENE (OXGN)(11/20/09). Drug meets safety goals in study.
Dynavax (DVAX)(11/5/09). Completes enrollment of first cohort of patients in Phase 1b clinical trial for Hepatitis B therapy.
Helicos BioSciences (HLCS)(10/20/09). Sells a Genetic Analysis System to the Leiden University Medical Center in the Netherlands.
Qualstar (QBAK)(10/20/09). Announces two new XLS enterprise tape libraries.
Avanir Pharmaceuticals (AVNR)(10/5/09). To present at the Piper Jaffray health care conference on December 2. Recent balance sheet looks good.
Solta Medical (SLTM)(10/5/09). Announces new Fraxel re:store dual laser system; receives CE mark for European market.
Investors Capital (ICH)(9/20/09). Posts a net profit for the 2ndQT; balance sheet still looks good.
Anadys Pharmaceuticals (ANDS)(8/20/09). To present at the Piper Jaffray healthcare confab on December 1, the day we post this Newsletter.
USA Technologies (USAT)(6/5/09). Asks shareholders to side with company against dissidents.
Durect (DRRX)(4/20/09). To present at the Piper Jaffray health care conference on December 1, the day we post this Newsletter.
Ligand Pharmaceuticals (LGND)(2/20/09). Presents new preclinical data on its lead SARM molecule LGD-4033. Receives $2 million in milestone payments from Merck.
The Orchard (ORCD)(11/20/08). TrustNordisk chooses company for digital marketing and distribution.
Oilsands Quest (BQI)(10/20/08). Restates financials.
Akeena Solar (AKNS)(10/20/08). Partners with Highland Solar to distribute 1.75 MW of Andalay AC solar panels in Canada.
SCM Microsystems (SCMM)(10/5/08). Releases pretty upbeat quarterly report; balance sheet looks okay.
Planar Systems (PLNR)(9/20/08). Begins shipping Clarity Matrix LCD video wall system. Although revenue drops year-over-year, losses are greatly pared; balance sheet still looks good.
Energy Focus (EFOI)(6/5/08). Reports dismal numbers and deteriorating balance sheet. We have placed this on the “Endangered List”.
Bridgeline Software (BLSW)(6/5/08). Wins 2009 MITX Interactive Award.
Microvision (MVIS)(5/20/08). Prices 3.3 million share stock offering at $3 per share.
ActivIdentity (ACTI)(3/5/08). Releases positive FY numbers; balance sheet still looks strong.
Hollis-Eden Pharmaceuticals (HEPH)(12/20/07). Presents interim data from prostate cancer Phase I/II clinical studies of Apotone (HE3235).
Linktone (LTON)(11/5/07). Earnings release.
American Technology (ATCO)(10/5/07). To release earnings on December 2.
TTI Team Telecom (TTIL)(3/5/07). Stock gets a nice pop on positive earnings news; balance sheet still looks strong.
Endologix (ELGX)(1/20/07). Asks court to stay Cook Medical lawsuit. Receives IDE approval for fully percutaneous approach to EVAR.
YM Biosciences (YMI)(11/5/06). Several releases about various drug candidates.
8×8 (EGHT)(1/20/06). To present at 2nd Annual LD MICRO confab on December 3.
Our picks for this Newsletter are another solar company and a diagnostic substance tester, both NASDAQ-listed.
REAL GOODS SOLAR, INC. (NASDAQ: RSOL) – $3.00. Twelve-month hi-low has been $6.00 – $1.42. Based in Louisville, KY, with about 170 employees, this alternative energy outfit has 18.3 million shares outstanding, $32.96 million in total current assets, $43.16 million in total assets, little debt, and $13.11 million in total liabilities. Institutional ownership is around 21%. One analyst rates the stock a “strong buy” and two have it as a “moderate buy”. www.realgoodssolar.com
Over the last dozen years, we have fared well with solar stocks. Yes, we know that Akeena Solar, which has been in the Current Portfolio for over a year, has taken a hit, but that, we still feel, should work with time. Real Goods Solar, Inc has a decent looking balance sheet and just came off a pretty nice quarter.
Founded in 1978, and trading on NASDAQ for less than two years, and a subsidiary of Gaiam, Inc., Real Goods Solar bills itself as a leading residential solar energy integrator offering turnkey services to its solar system customers, including design, procurement, permitting, build-out, grid connection, financing referrals and warranty activities. RSOL’s systems use solar PV modules from manufacturers such as Sharp, SunPower, and Kyocera Solar. Its residential and commercial systems are generally between 1 kilowatt and 250 kilowatts output, with the average residential installation being approximately four kilowatts output. This is a company that has had much growth through acquisitions. In 2008 alone, RSOL’s 88%-owned subsidiary bought certain assets of Carlson Solar; the company acquired 100% interest in Independent Energy Systems; and it acquired 100% ownership of Regrid Power, Inc.
Several key developments occurred over the last five months that should keep RSOL’s revenues buoyant. The company signed a large multi-site contract with Northrop Grumman to design and install three large solar electric systems on two separate U.S. Navy bases; construction is slated to begin during the current quarter and should take four to six months to complete. Next, RSOL inked a contract to install a $30 million solar power program for the Freemont Union High School District that covers Sunnyvale, Cupertino, and west San Jose, CA. Five systems will contribute enough electricity for about 45% of the power usage at each school.
For FY2008, ending 12/31/08, revenue was $39.22 million with $27.95 million in net losses. During the first nine months of the current FY, ending 9/30/09, revenue was $45.21 million with $1.8 million in losses. In the last quarter, the company claimed to see a return of strong demand for residential solar.
For one reason or another, solar stocks got whacked over the last year, but what goes around usually comes around and RSOL seems to be in a good position to ride the next solar updraft.
Our 24-month target for the stock is $4.75 to $5.50.
For more information, contact RSOL’s Erik Zech at 415-456-2800, ext. 107; erik.zech@realgoods.com
ORCHID CELLMARK, INC. (NASDAQ: ORCH) – $1.42. Twelve-month hi-low has been $2.20 – 42 cents. Located in Princeton, NJ, with around 400 employees, this diagnostic substance tester has 30 million shares outstanding, $30.19 million in total assets, $51.38 million in total assets, little debt, and $6.95 million in total liabilities. Institutional ownership is about 60%. One analyst rates the stock a “strong buy”. www.orchid.com
Over the years, we have stumbled across some pretty novel companies, and Orchid Cellmark, Inc. comes close to the top of the list. It also helps that the company has a good-looking balance sheet and seems to be holding its own during a very difficult year.
Founded in 1995 as Orchid Biosciences, and trading on NASDAQ for nearly ten years, Orchid Cellmark, simply put, provides DNA testing services that generate genetic information by analyzing and organism’s genetic identity. The company focuses on DNA testing for human identity and agricultural applications. In the human identity area, Orchid provides DNA testing services for forensic, family relationship, and security applications. For agricultural uses, the company provides DNA testing for selective trait breeding. Orchid has operations in both the U.S. and the U.K. Their forensic, family relationship, and security DNA testing services are conducted in both countries, while all of its agricultural services are done in the U.K.
In mid-October, Orchid Cellmark granted a worldwide license valued at $1 million to Illumina, Inc. for the commercial development of the company’s single-base nucleotide extension technology for the diagnostic and forensic fields. At the end of September, Orchid was selected as sole CODIS supplier to provide convicted offender DNA typing services for the State of Washington, Washington State Patrol (WSP).
For FY2008, ending 12/31/09, revenue was $57.59 million with $4.48 million in losses. During the first nine months of the current FY, ending 9/30/09, revenue was $43.32 million with $2.4 million in net losses.
Despite a very slight drop in revenue during the current FY, we have to believe that, given the current security climate, companies like Orchid Cellmark should see better growth in the upcoming years.
Our 24-month target for the stock is $2.50 to $2.75.
For more information, contact ORCH’s Tom Bologna at 609-750-2324; ir@orchid.com
Look for the December 20, 2009 Newsletter to be posted on 12/16 or 12/17.
Thank you,
George