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Hello Readers,
Since the last Newsletter, we closed two positions; one for a gain and one for a loss.
NEGENOMICS (9/20/13). Closed position 10/24/13 at $4.12 for a 65% GAIN.
ANTHERA PHARMACEUTICALS (10/5/12). Closed position 10/24/13 at $3.52 for a 56% LOSS.
Sometimes, a simple thing, like a good earnings report can juice a stock, as appears to be the case with Neogenomics, which was a nice surprise since it was in the Current Portfolio for a little over a month. And, we closed Anthera Pharmaceuticals for a loss; we still have no clue as to why they ever did that bone-headed reverse split.
We cannot feel overly optimistic about the markets long-term. However, for the next month or so they could have a nice run, since the Fed will continue feeding the pot with even more honey. What worries us is that come next month, and after the first of the year, is that Washington needs to do the same thing all over again that they put us through last month. The underlying problem is that the country has really bad leadership in the White House and on both sides of the aisle in Congress.
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.
GTX, Inc. (GTXI)(10/20/13). To post earnings on November 12. Partners with Aeris to power a new era of personal location services and wearable technology. Presents results from Enobasarm POWER trials.
Agenus, Inc. (AGEN)(10/20/13). Balance sheet still looks good.
Hudson Global (HSON)(9/20/13). Quarterly numbers could have been better; balance sheet still looks good.
Durect Corp. (DRRX)(9/5/13). Schedules earnings news for November 4.
Towerstream (TWER)(8/5/13). To report earnings on November 12.
Solta Medical (SLTM)(8/5/13). Slates earnings news for November 11.
MeetMe (MEET)(7/20/13). Sets earnings call for November 5.
Baxano Surgical (BAXS)(7/5/13). Is issued patent for the VEO Lateral Access System. Sets earnings call for November 6.
Commtouch Software (CTCH)(7/5/13). Sets earnings call for November 14.
InspireMD (NSPR)(5/20/13). Says MGuard stent shows lower mortality rate in STEMI patients at twelve months compared to control group. Empire Asset Management gives the stock a “buy”. Secures additional financing.
Antares Pharma (ATRS)(5/20/13). Slates earnings call for November 6. Issued new U.S. patent on the VIBEX device platform.
MELA Sciences (MELA)(5/5/13). Announces $6 million secondary offering.
Synacor (SYNC)(4/20/13). Announces what it claims is the industry’s first white-label authentication solution for TV everywhere access, which is part of company’s cloud ID offering. Sets earnings call for November 5.
iPASS (IPAS)(4/5/13). To report earnings on November 6.
Joe’s Jeans (JOEZ)(3/20/13). Oakridge Centre adds Joe’s, a Canadian first.
Echelon (ELON)(3/5/13). Sets earnings news for November 7.
AlphaTec Holdings (ATEC)(2/20/13). Slates earnings results for November 7. Enters into collaboration with a group of experienced spine surgeons.
Gevo, Inc. (GEVO)(1/20/13). Slates earnings results for November 5.
EnteroMedics (ETRM)(1/20/13). Balance sheet still looks good.
Palatin Technologies (PTN)(12/5/12). Reports successful completion of device Bioequivalance trial.
Limelight Networks (LLNW)(11/20/12). Sets earnings news for November 5.
Lionbridge Technologies (LIOX)(11/5/12). Recent numbers hit a home run; balance sheet still looks very good.
Zynga, Inc. (ZNGA)(10/5/12). Besides the usual dozens of articles and releases, the company came out with what many consider to be decent earnings numbers.
ImmunoCellular Therapeutics (IMUC)(9/20/12). To release earnings reports on November 6.
AXT, Inc. (AXTI)(9/5/12). Quarterly numbers could have been better; balance sheet still looks strong.
AVIAT NETWORKS (AVNW)(7/20/12). Numbers could have been better; balance sheet still looks pretty strong.
Metabolix (MBLX)(7/5/12). Sets earnings call for November 5.
Athersys (ATHX)(7/5/12). Sets earnings date for November 14. Secures a new equity facility for $25 million.
Capstone Turbine (CPST)(5/20/12). Sets quarterly results for November 7.
Axcelis Technology (ACLS)(4/5/12). Slates earnings call for November 6. Wins multiple system order for “Purion XE” high energy implanter for new fab in Asia.
Mattson Technology (MTSN)(4/5/12). Releases pretty good quarterly numbers; balance sheet still looks okay.
Anadigics (ANAD)(11/20/11) Sets earnings news for November 4. Introduces DOCSIS 3.1 Edge QAM amplifier and expands DOCSIS 3.1 line amplifier family.
Synthesis Energy Systems (SYMX)(8/20/11). Signs MOU with Hulubeier Tianfu Energy for city gas project.
Cover-All Technologies (COVR)(7/20/11). Releases pretty good quarterly numbers; balance sheet still looks okay.
On Track Innovations (OTIV)(6/20/11). MasterCard certifies OTI’s “Wave” NFC device.
Thermogenesis (KOOL)(4/5/11). Announces strategic reorganization initiative.
Our picks for this Newsletter are another small biotech and an education provider, both NASDAQ-listed.
SEQUENOM, INC. (NASDAQ: SQNM) – $1.92. Twelve-month hi-low has been $5.36 – $1.70. Based in San Diego, CA, with nearly 600 employees, this biotech has 115.4 million shares outstanding, $197.47 million in total current assets, $248.95 million in total assets, and $200.95 million in total liabilities, of which $147.04 million is long-term debt. Institutional ownership is around 70%. Three analysts rate the stock a “strong buy”, two as a “buy”, and three as a “hold”. www.sequenom.com
This is another oldie that we picked a few years back and it worked well, at the time. So, why not give Sequenom, Inc. another shot? It appears to have even more analysts behind it than before. Yes, we see the long-term debt figure but it does not bother us, for now, since we suspect much of it could things like convertible notes. Also, the company is trying to sell what has become a major drag on its balance sheet.
Founded in 1994, and public for nearly fifteen years, Sequenom is a molecular diagnostic testing and genetics analysis company. It operates through two segments, Molecular Diagnostics and Genetic Analysis. The Molecular Diagnostics division researches, develops and commercializes various non-invasive tests for prenatal genetic disorders and diseases; women’s health-related disorders and diseases; and ophthalmologic, oncologic, and other medical conditions, such as autoimmunity and neurology. The Genetics Analysis segment offers Mass ARRAY system, a nucleic acid analysis research-only system that measures genetic target material and variations; and research use only iPLEX multiplexing assay, which permits multiplexed single nucleotide polymorphism (SNP) and somatic mutation analysis.
In September, the company retained Jefferies LLC to explore selling the Genetics Analysis segment, which has become a cash drain on the company. During the first six month of this FY, it only accounted for about a quarter of the company’s revenue. Sequenom would prefer using resources toward applications like its MaternT21, a blood test intended for women who are at high risk of carrying a fetus with Down syndrome, which the company claims can detect the chromosomal anomaly that causes the condition as early as ten weeks into pregnancy.
At the end of October, the company had what we feel to be a minor hick-cup over a patent ruling, which put some pressure on the stock.
For FY2012, ending 12/31/12, revenue was $89.69 million with $117.03 million in losses, much of the losses stemming from the Genetic Analysis division. During the first six months of the current FY, ending 6/30/13, revenue was $73.39 million with $60.38 million in losses. Please note that the next earnings report will be posted the same day as we post this Newsletter on November 1.
Yes, things seem to be a little chaotic at Sequenom for the moment, but revenues a still growing, and, if the company sheds its baggage, the stock could get a nice run.
Our 24-month target for the stock is $3.50 to $3.75.
For more information, contact SQNM at 858-202-9000.
CORINTHIAN COLLEGES, INC. (NASDAQ: COCO) – $2.10. Twelve-month hi-low has been $2.97 – $1.85. Headquartered in Santa Ana, CA, with about 10,000 employees, this education provider has 86.4 million shares outstanding, $286 million in total current assets, $1.02 billion in total assets, and $457.9 million in total liabilities, of which $134.2 million is long-term debt. Institutional ownership is around 78%. One analyst has the stock as a “buy”, five as a “hold”, and one as a “sell”. www.cci.edu
We cannot help but think there is a lot of room for non-traditional education providers, such as Corinthian Colleges, Inc. By non-traditional we mean sans the ivy walls, dorms, and mega-campuses. This may not be the sexiest of plays, but the company has been showing revenue growth for the last three years, while nicely paring the losses.
Founded in 1995, and trading publicly for over a dozen years, Corinthian Colleges operates as a post-secondary education company. It offers various diploma programs, as well as associate, bachelors, and masters’ degrees. The school provides training programs in healthcare, criminal justice, business, mechanics, trades and information technology. The company’s diploma curricula includes medical assisting, medical insurance billing and coding, massage therapy, dental assisting, pharmacy technician, medical administrative assisting, surgical technology, automotive and diesel technology, HVAC, plumbing, electrical, and licensed nursing programs. Its degree curricula encompass business administration, accounting paralegal, criminal justice medical assisting, and registered nursing programs.
The latest numbers has Corinthian offering over 300 courses online and serving over 31,000 online students out of a total student enrollment of over 91,000. The company has about 100 schools in 26 states and sixteen schools in the province of Ontario, Canada under the Everest, WyoTech, and Heald brand names.
For the FY ending 6/30/13, revenue was $1.6 billion with $1.66 million in losses compared to previous year revenue of $1.58 billion and $10.24 million in losses.
Online education is of course the wave on the future and Corinthian Colleges is in a narrow group of companies that seem to be getting a good head start.
Our 24-month target for the stock is $3.50 to $3.75.
For more information, contact COCO’s Anna Marie Dunlap at 714-424-2678.
Look the November 20, 2013 Newsletter to be posted on 11/18 or 11/19.
Thank you,
George