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Hello Readers,
Since the last Newsletter, we closed one position for a minor loss.
ALLOS THERAPEUTICS (7/20/11). Closed position 7/21/11 at $1.84 for an 8% LOSS.
OUCH! During our 15-year history, this has only happened on three other occasions when a new pick is acquired within days of our posting the Newsletter. Allos Therapeutics is being acquired by Amag Pharmaceuticals for 0.1282 shares of Amag stock for each share of Allos. Or, if our math is almost right, eight shares of Allos gets you one share of Amag. Yes, we feel that Amag got Allos for a steal and, judging from all of the lawsuits being filed, we are not the only ones who think this. Those of you who bought Allos have two choices. Either sell it now for a minor loss or wait until you are issued Amag shares and see what happens. We do not know much about Amag except that it looks to have a strong balance sheet and is trading at nearly its 52-week low.
And now, DOUBLE OUCH as the markets continue what only can be called the “The Debt Crisis Swoon”. What stumps us is that a lot of energy is being spent on what looks to be a lot of nothing. Both sides are offering ten-year “spending cut” plans on money that hasn’t even been budgeted. Are we missing something here? And yes, this latest Washington fiasco has taken its toll on our Current Portfolio.
Here are the headlines since the last Newsletter about companies in the Current Portfolio; dates in parentheses are when we first recommend them. We are not giving updates about companies on the “Endangered List” unless we feel the news to be highly significant.
Somaxon Pharmaceuticals (SOMX)(7/5/11). Coverage initiated by Global Hunter Securities. Plans earnings call for August 2, the day after we post this Newsletter.
Opnext (OPXT)(6/20/11). Sets earnings call for August 4.
Gleacher & Co. (GLCH)(6/5/11). Plans earnings news for August 2, the day after we post this Newsletter.
Idera Pharmaceuticals (IDRA)(6/5/11). FDA puts clinical hold on proposed Phase 2 clinical trial of IMO-3100 for treating psoriasis.
Neostem (NBS)(5/20/11). Subsidiary announces extension of manufacturing agreements with two existing clients. Announces proposed $16.5 million secondary offering, which whacked the stock pretty badly.
Energy Recovery (ERII)(5/5/11). Coverage initiated by Rodman & Renshaw.
Innodata Isogen (INOD)(5/5/11). Releases positive quarterly report; balance sheet still looks good.
Jamba, Inc. (JMBA)(3/20/11). To present at the Canaccord Genuity Growth Conference on August 9.
Oculus Innovative Sciences (OCLS)(3/5/11). Announces multi-year licensing agreement with Eloquest Healthcare for Microcyn-based wound care products. Sets earnings call for August 4.
Network Engines (NEI)(2/5/11). Recent quarterly numbers show 7% year-over-year revenue increase and record profitability; balance sheet still looks pretty good.
Real Goods Solar (RSOL)(1/20/11). To release earnings on August 8.
Sprint Nextel (S)(1/5/11). Stock got clocked when it reported that it had lost over 100,000 contract customers in the latest quarter. This has now become a ‘wait and see’ situation.
Trident Microsystems (TRID)(12/20/10). Licenses its MEMC patent portfolio to Sunplus. Latest numbers not great but company expects to do better in the current quarter; balance sheet still looks okay.
SuperGen (SUPG)(12/5/10). Sets earnings call for August 3. Completes acquisition of Astex Therapeutics.
PixelWorks (PXLW)(11/20/10). Recent numbers not bad, but not great; balance sheet still looks good.
Alpha Pro Tech (APT)(7/20/10). Sets earnings news for August 3.
Adolor (ADLR)(5/5/10). Recent numbers show promise; balance sheet still looks good.
Novavax (NVAX)(4/5/10). To report quarterly results on August 5.
Cerus Corp (CERS)(3/20/10). Latest quarter show positive revenue growth, though losses need paring; balance sheet still looks good.
Cytokinetics (CYTK)(2/5/10). Balance sheet still looks strong.
CytRx (CYTR)(1/5/10). Stock gets downward pressure as company prices $20.4 million secondary offering.
Performance Technologies (PTIX)(7/20/09). Sets earnings call for August 4.
USA Technologies (USAT)(6/5/09). Issues letter to shareholders.
Bridgeline Digital (BLIN)(6/5/08). Hoveround launches new mission critical web site on the iAPPS product suite; as does a leading independent electronic foreign exchange platform.
MicroVision (MVIS)(5/20/08). Signs agreement with Intel to expand SHOWWX+ distribution. Announces contract with major auto maker to develop in-vehicle head-up display. Recent numbers not great; balance sheet still looks good.
GlobalSCAPE (GSB)(5/20/08). Sets earnings call for August 11. Cloud-based managed file transfer solution from GSB helps AVI-SPL streamline global operations.
Move, Inc. (MOVE)(1/5/08). Sets August 8 for earnings call.
Our picks for this Newsletter are a NASDAQ-listed provider of clean energy technology and a drug maker listed on the AMEX.
SATCON TECHNOLOGY CORPORATION (NASADAQ: SATC) – $1.89. Twelve-month hi-low has been $5.51 – $1.90. Based in Boston, MA, with about 300 employees, this clean energy technology provider has 119 million shares outstanding, $181 million in total current assets, $189.86 million in total assets, and $137.8 million in total liabilities, of which $8.14 million is long-term debt. Institutional ownership is around 43%. Five analysts rate the stock a “strong buy”, three a “moderate buy”, and two have it as a “hold”. www.satcon.com
At some point in our 15-plus year history, we picked SatCon Technology Corporation and it worked well, so, we thought we would try it, again. This time it has many more analysts lined up behind the stock, even though the company recently gave a revised downward guidance in revenues, which it feels may be a short-term condition; and we are inclined to give them the benefit of the doubt.
Founded in 1985, and public for nearly 20 years, SatCon provides a suite of utility grade power conversion solutions and services for commercial and utility scale renewable energy installations and distributed energy markets in the U.S. and internationally. With over 2.5 gigawatts of solutions deployed worldwide, SatCon claims to be the world’s most widely utilized utility-ready solar inverter system solution provider. Its renewable energy solutions include utility grade inverters for solar photovoltaic and fuel cell applications that offer modular inverters for use in connection with large, utility-scale, renewable energy power systems, such as stationary fuel cell power plants, photovoltaic power plants, and distributed power generation systems. The company’s PowerGate Plus inverters convert the AC power; and provide an interface with the electric utility grid, an energy storage device, and end user applications.
SatCon’s solutions also comprise micro grid solutions that provide stable renewable power locally, at the point of demand. Its micro grid solutions also offer uninterrupted utility grade renewable energy to deliver the energy securely.
At the end of June SatCon was selected by BIOSAR Energy SA, one of Europe’s leading photovoltaic solar energy development companies, for multiple utility-scale power plants across Italy, Greece, and Bulgaria. BIOSAR will deploy thirty two 625 kilowatt Equinox inverters, which is Satcon’s next-generation utility-ready solution.
For FY2010, ending 12/31/10, revenue was $173.3 million with $11.82 million in net losses. During the first quarter of the current FY, ending 6/30/11, revenue was $62 million with loss of $2.14 million. When the company announces 2ndQT numbers on August 9, it will probably disappoint on the revenue side and gross margins. The company is blaming much of this on changes in government incentives in Europe and delays in certain projects, but the company thinks things are moving in the right direction.
SatCon has been a rollercoaster stock for a lot of years, and is currently in a dip. But, we still like the fact the eight analysts are still behind the company and that SatCon still has the wherewithal to nail down some nice business, as evidenced with the BIOSAR award.
Our 24-month target for the stock is $3.25 to $3.75.
For more information, contact SATC’s Leah Gibson at 617-897-2400; Leah.Gibson@satcon.com
ANTARES PHARMA, INC (AMEX: AIS) – $2.32. Twelve-month hi-low has been $2.44 – $1.32. Based in Trenton, NJ, with about 20 employees, this pharmaceutical products developer has 100.69 million shares outstanding, $15.91 million in total current assets, $18.29 million in total assets, little debt, and $7.5 million in total liabilities. Institutional ownership is about 25%. Four analysts rate the stock a “strong buy” and one as a “moderate buy”. www.antarespharma.com
For the better part the last five years, the chart for Antares Pharma, Inc. has been pretty much a flat line. However, the company could see some positive events in the near future that may send the stock on an upward blip. It has recently drawn the attention of Deerfield Capital, which has reported a 9.59% passive stake in the company, and is now being covered by Oppenheimer.
Founded in 1979, and public for nearly 15 years, Antares focuses on self-injection pharmaceutical products, and topical gel-based products. It offers injection devices, which include Medi-Jector Vision for insulin; Zomajet 2 Vision, Zomajet Vision X, Twin-Jector EZ II, and Tjet for human growth hormone; Vibex pressure auto injector platform that enables a controlled pressure delivery of drugs into the body using a spring power source; and disposable pen injectors, which are needle-based devices designed to deliver multiple injections from multi-dose cartridges. The company also develops/commercializes Anturol, an oxybutynin ATD (advanced transdermal delivery) gel, which is in Phase III clinical trials for treating overactive bladders; Elestrin, a transdermal estradiol gel for treating moderate to severe vasomotor symptoms associated with menopause; LibiGel, a transdermal testosterone gel that is in Phase III clinical studies for treating female sexual dysfunction; Nestorone contraceptive formulation products, which has completed Phase II clinical trials; and Ropinerole to treat the central nervous system.
Antares has collaborative arrangements with Teva Pharmaceuticals, BioSante Pharmaceuticals, Jazz Pharmaceuticals, Population Council, Ferring Pharmaceuticals, Eli Lilly, JCR Pharmaceuticals, and Solvay Pharmaceuticals, as well as an alliance with Uman Pharma.
Creating much of the buzz, lately, is Anturol Gel for patients with overactive bladders. The company filed for FDA review a New Drug Application (NDA). It was recently assigned a Prescription Drug User Fee Act (PDUFA) date of December 8 for Anturol, which is the target date for the FDA to complete its review of the NDA.
Antares does derive some revenue from product sales and licensing fees. During the 1stQT of the current FY, ending 3/31/11, revenue was $3.56 million with net losses of $1.38 million.
There appears to be a lot happening here and some big name brokerage firms are taking notice.
Our 24-month target for the stock is $3.75 to $4.25.
For more information, contact AIS’s Robert Apple at 609-359-3020.
Look for the August 20, 2011 Newsletter to be posted on 8/16 or 8/17.
Thank you,
George