***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 another position:
Pharmacyclics (6/20/07). Closed position 2/9/10 at $5.00 for a 62% GAIN.
Here’s another that worked thanks to a lot of patience. Back in March, 2008, Pharmacyclics had sunk to 65 cents, but we hung in there because its balance sheet did. Over recent months, the stock got a nice boost probably due to the mini rebirth in biotechs, along with some upbeat clinical trial news and a brokerage house “buy” signal.
The markets keep drifting down. One day the Dow is up 180 points and then down 250 over the next two. We sense this will be the pattern for quite some time. Investors are starting to realize that any real economic rebound is in the distant future. We do not foresee any massive panic selling in the near-term, but, sometime, over the next six to twelve months, look for it. There are still too many adversities keeping a damper on things; we need not give a list, since you have heard them all. At some point, all of these components will converge at once, creating a “perfect storm of selling.”
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.
Microtune (TUNE)(2/5/10). Numbers hit top end of guidance; balance sheet still looks very strong. Hits 150 million TV tuner shipment milestone.
Cytokinetics (CYTK)(2/5/10). Announces non-clinical data from multiple programs to be presented at the Biophysical Society annual meeting February 20-24. Recent balance sheet still looks strong and company provides product update. Gets a nice mention in article at Forbes.com
XATA, Inc (XATA)(9/20/07). Releases good-looking quarterly revenue numbers; balance sheet still looks okay. Schnucks chooses XATA for fleet visibility and efficiency.
A.P. Pharma (APPA)(8/5/07). We are removing this from the Endangered List. Stock has made a remarkable run over the last month or so. Wish we knew why. Could be something is up or the momentum players have made it a favorite. Who knows?
Radcom (RDCM)(7/20/07). Here is another one we are removing from the “Endangered List” as company reports some nice-looking revenue numbers; we would like to see the balance sheet be a little stronger. Swisscom purchases Radcom’s Omni-Q to monitor their new IMS Network.
Endologix (ELGX)(1/20/07). Sets earnings call for February 18.
YM Biosciences (YMI)(11/5/06). Presents CYT387 and CYT997 data at cancer conference. Granted two U.S. patents for AeroLEF. Balance sheet still looks good. Completes merger with Cytopia.
The Inventure Group (SNAK)(3/5/06). Slates earnings call for February 25.
8×8 (EGHT)(1/20/06). Communications patent reissued by U.S. patent office. Announces voice over 3G update to its Virtual Office mobile iPhone App.
Chelsea Therapeutics (CHTP)(1/20/10). Supports initiation of Phase II study of Droxidopa in combination with Carbodopa in adult attention deficit hyperactivity disorder. Announces advancements in neurogenic orthostatic hypotension registration program.
NIVS IntelliMedia (NIV)(1/20/10). Introduces its LCD TV and home theater products to North American market.
OxiGene (OXGN)(11/20/09). Announces restructuring to focus resources on key programs and provides business update. VaxGen shareholders vote against proposed merger.
Helicos BioSciences (HLCS)(10/20/09). Announces additional system installations for the St. Laurent Institute and Stanford University.
Qualstar (QBAK)(10/20/09). Quarterly numbers, though not great, meet guidance; balance sheet still looks good.
Avanir Pharmaceuticals (AVNR)(10/5/09). Announces issuance of new U.S. Zeniva patent. Recent balance sheet still looks good.
BioClinica (BIOC)(8/5/09). Inks multi-year outsourcing deal with Cephalon. Recent numbers look pretty good, as does balance sheet.
Performance Technologies (PTIX)(7/20/09). Debuts NGN Xpress product line. Comfone expands international connectivity with PTIX SEGway signaling solution. Although revenues are down year-over-year, company sees sequential quarterly revenue growth; balance sheet still looks good.
Salary.com (SLRY)(7/5/09). Recent numbers show some revenue growth and paring of losses; balance sheet still looks okay.
USA Technologies (USAT)(6/5/09). Recent numbers show revenue growth but losses uptick a little; balance sheet still looks good. Settles proxy suit with dissident shareholders.
Ligand Pharmaceuticals (LGND)(2/20/09). Recent balance sheet looks okay as company summarizes key programs and provides a 2010 outlook.
Akeena Solar (AKNS)(10/20/08). Recent numbers disappoint but company is upbeat; balance sheet could look better.
Identive Group (INVE)(10/5/08). To close Mainz facility in Germany and integrate Indian operations. Thumb-sized PIV card reader now GSA approved for use by U.S. government agencies.
Planar Systems (PLNR)(9/20/08). Selected to provide thin film electroluminescent technology to Dytecna Systems Engineering for military vehicle displays. Latest numbers beat guidance but could be better; balance sheet still looks strong.
Life Quotes (QUOT)(9/5/08). Recent numbers a little skewed because of asset sale; balance sheet still looks good.
U.S. Geothermal (HTM)(8/5/08). Files quarterly report. Resale registration statements declared effective.
Bridgeline Software (BLSW)(6/5/08). Maryland Hospital Association chooses iAPPS Content Manager and iAPPS Analytics.
Microvision (MVIS)(5/20/08). SHOWWX laser Pico projector grabs top honors at Macworld Expo 2010.
ActivIdentity (ACTI)(3/5/08). Teams with IronKey to deliver CAC/PIV authentication on IronKey Enterprise devices for mobile workers. Feltl gives the stock a “buy”. Recent revenue numbers not great; balance sheet still looks strong.
Sunesis Pharmaceuticals (SNSS)(11/5/07). Grants Carmot Therapeutics license to its drug discovery technology.
American Technology (ATCO)(10/5/07). Releases some pretty good revenue and profit numbers; balance sheet still looks okay.
Our picks for this Newsletter are another biotech and a specialty retailer, both NASDAQ listed.
ROSETTA GENOMICS LTD. (NASDAQ: ROSG) – $1.60. Twelve-month hi-low has been $3.80 – $1.65. Based in Rehovot, Israel, with about 110 employees, this biotech has 14.2 million shares outstanding, $13.97 million in total current assets, $15.75 million in total assets, and $5.5 million in total liabilities. Institutional ownership is around 27%. One analyst has the stock as a “hold”. www.rosettagenomics.com
Over the years, we have fared pretty well with Israeli stocks, and, yes, we still have a few in the Current Portfolio that are on the “Endangered List”; however, even those are looking better than they did a few months ago and we may rethink their status. Rosetta Genomics Ltd. has a pretty decent balance sheet, which they just bolstered with a $5 million secondary, and they have what appears to be some pretty nifty technology.
Founded in 2000, and trading on NASDAQ for less than a year, Rosetta bills itself as a leading developer of microRNA-based diagnostic tests and therapeutic tools. MicroRNAs (miRNAs) are a recently discovered group of short (21-23 nucleotides in length), non-coding genes which regulate the expression of other genes. They also have been shown to have varying expression levels across various pathological conditions, and offer a new class of highly sensitive and tissue specific biomarkers. MicroRNA-based diagnostics may offer physicians and patients an objective tool to accurately identify cancer, predict outcomes and help guide treatment.
Rosetta Genomics develops microRNA-based diagnostic programs for various cancers, as well as for the identification of the origin of the primary tumor of metastates; for differentiating squamous from non-squamous non-small cell lung cancer; and for differentiating mesothelioma from other carcinomas in the lung and pleura. The company also focuses on developing minimally/non-invasive, blood or serum-based molecular diagnostic tests. In addition, it develops microRNA-based therapeutic products for treating liver cancer and chronic infections. Rosetta has a license and collaboration agreement with Prometheus Labs to license and sublicense certain rights to the company’s microRNA-based cancer diagnostic tests; and a testing and administrative services pact with Teva Pharmaceutical to distribute these tests in Turkey and Israel.
At the end of January, Rosetta fortified its US patent position with the allowance of claims covering human microRNAs miR-21 and hcmv-miR-UL112. Earlier in that month, the company announced that Johns Hopkins University researchers demonstrated miRview squamous classifies non-small cell lung cancer with an extremely high degree of accuracy.
Rosetta Genomics is typical of many small biotechs insomuch as it makes little on the revenue side and racks up some hefty losses. For the nine months ending 9/30/09, revenues were $31,000 with $12.5 million in losses.
Our thinking here is that Rosetta has agreements with some major biotech players who must feel the microRNA platform has some merit; and with the stock trading at the lower end of its range, this may be worth a shot.
Our 24-month target for the stock is $3.00 to $3.25.
For more information, contact ROSG’s Ron Kamienchick at 646-509-1893; investors@rosettagenomics.com
ZAGG, INC. (NASDAQ: ZAGG) – $2.50. Twelve-month hi-low has been $7.91 – $1.00. Located in Salt Lake City, UT, with about 70 employees, this specialty retailer has 21.7 million shares outstanding, $15.98 million in total current assets, $16.9 million in total assets, little debt, and $4.6 million in total liabilities. Institutional ownership is around 3%. Four analysts rate the stock a “strong buy”. www.zagg.com
We don’t normally follow retail companies nor companies that are sort of light in the cash column. But, Zagg, Inc. has been making money over the last year and when four analysts give the stock a “strong buy” that catches our attention. “The Street”, whoever they are, was recently disappointed when the company guided down on 2009 earnings from a projected 20 cents a share to 15 – 17 cents a share. Give us a break!
Trading on NASDAQ for less than three years, Zagg designs, makes, and distributes protective clear coverings and accessories for consumer electronic and hand-held devices worldwide under the brand names invisibleSHIELD and ZAGGaudio. Zagg has also introduced appSpace, what it claims is a powerful recommendation engine for the fast-growing app market, combined with the networking power of social media. The invisibleSHIELD is a protective, high-tech covering, designed for iPODS, laptops, cell phones, digital cameras, PDAs, watch faces, GPS systems, gaming devices, and other items. This patent-pending application of clear protective film covering a device is the first scratch protection solution of its kind on the market, according to the company, and has sold millions of units. The ZAGGaudio brand primarily comprises headphones, speakers, car chargers, ear buds, and audio products.
Currently, ZAGG offers over 4000 precision pre-cut designs of invisibleSHIELD with a lifetime replacement warranty through ZAGG.com, major retailers like Best Buy, Radio Shack, and Cricket, resellers, college bookstores, MAC stores, mall kiosks, and other online retailers. Zagg just introduced the ZAGGbox, which it hails as a breakthrough gadget waterproofing technology.
For FY2008, ending 12/31/08, revenues were $19.79 million with $2 million in net income. During the first nine months of FY2009, ending 9/30/09, revenue was $26.96 million with $3.13 million in net income.
Okay, this is not an overly sexy play, but the company seems to have a penchant for making money, and we are somewhat impressed with the four “strong buys”.
Our 24-month target for the stock is $4.00 to $4.50.
For more information, contact ZAGG’s Brandon O’Brien at 801-263-0699, ext. 122; brandon@zagg.com
Look for the March 5, 2010 Newsletter to be posted on 3/1 or 3/2.
Thank you,
George