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Hello Readers,
Since the last Newsletter, we closed one position, for a gain.
THE HACKETT GROUP (4/20/09). Closed position 10/22/09 at $3.48 for a 56% GAIN.
For the last month, or so, The Hackett Group had climbed steadily and pierced our 50%-plus threshold on news that it had entered into a strategic alliance with South Africa’s IQ Business Group.
The fact that we only closed a single position over the last few weeks speaks volumes about the course of the markets during that time. Does the recent selloff mean that the reality of the economy has finally caught up to the markets’ psyche? With rates still a 0%, the unwarranted enthusiasm of the last seven months may start to resurface. But, at some point in the not-so-distant future, realities will really stick.
We should further add that the market downturn since mid-October has obviously put pressure on stocks in the Current Portfolio.
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 that the news is highly significant.
Helicos BioSciences (HLCS)(10/20/09). Releases pretty upbeat 3rdQT operating highlights but stock sees weakness over concerns about company’s burn rate. HLCS has retained Thomas Weisel Partners to explore strategic alternatives and partnerships.
Solta Medical (SLTM)(10/5/09). Sets earnings call for November 3, the day after we post this Newsletter.
BioSante Pharmaceuticals (BPAX)(9/20/09). To present at the Oppenheimer Health Care conference on November 3. Reports positive LibiGel safety data in Phase III program.
Drugstore.com (DSCM)(9/5/09). Reports good revenue growth and narrower losses year-over-year; balance sheet still looks strong.
Adept Technology (ADEP)(9/5/09). To release 4thQT and FY earnings on November 4. Several news items regarding product updates and improvements.
Anadys Pharmaceuticals (ANDS)(8/20/09). Latest balance sheet still looks good as company also provides updates. To present at Oppenheimer Healthcare Conference on November 4.
Occam Networks (OCNW)(8/5/09). To report 3rdQT results November 5.
BioClinica (BIOC)(8/5/09). Schedules earnings call for November 4.
Performance Technologies (PTIX)(7/20/09). Recent revenue numbers not good compared to a year ago, but better than previous quarter; balance sheet still looks good.
Salary.com (SLRY)(7/5/09). Launches PayrollManager Express small business payroll solution. Named to Deloitte’s Technology Fast 500 for fifth consecutive year.
Integrated Silicon Solution (ISSI)(6/20/09). To present at TechAmerica AeA Classic confab on November 3. Latest quarterly results show pretty good net income; balance sheet still seems strong.
USA Technologies (USAT)(6/5/09). Issued 71st patent.
Durect Corp (DRRX)(4/20/09). Recent balance sheet still looks strong.
Ligand Pharmaceuticals (LGND)(2/20/09). To acquire drug developer Metabasis for $3.2 million. Sets earnings call for November 5.
SuperGen (SUPG)(2/5/09). Signs cancer-drug deal with GlaxoSmithKline and receives $5 million upfront payment. Recent quarterly numbers look pretty good as does balance sheet.
MakeMusic (MMUS)(1/20/09). Sets earnings call for November 4.
Market Leader (LEDR)(12/20/08). Recent numbers not great; balance sheet still looks pretty good.
The Orchard (ORCD)(11/20/08). Partners with DailyMotion to deliver music videos to DailyMotion’s global data base. Ranked 66th fastest growing company in North America on Deloitte’s 2009 Technology Fast 500.
Oilsands Quest (BQI)(10/20/08). Skymark Research initiates independent coverage on company.
Akeena Solar (AKNS)(10/20/08). Although 3rdQT revenue outpaces previous quarter, year-over-year sales are way off but backlog rises; balance sheet weakens as cash dwindles.
SCM Microsystems (SCMM)(10/5/08). Announces results of annual meeting.
Planar Systems (PLNR)(9/20/08). Sets earnings call for November 17.
Endeavour Silver (EXK)(9/5/08). Reports 3rdQT production results.
Insure.com (NSUR)(9/5/08). Changes name to Life Quotes and new NASD symbol is QUOT.
ICAgen (ICGN)(8/5/08). We have placed this on the “Endangered List” since its asthma drug failed and the company stopped development.
U.S. Geothermal (HTM)(8/5/08). Awarded $3.77 million in DOE grants at its San Emidio Project. Coverage initiated by Thomas Weisel. Completes second successful production well at Neal Hot Springs Project.
Neurobiological Technologies (NTII)(7/5/08). Shareholders okay company liquidation and board declares extraordinary dividend of 75 cents a share to shareholders of record as of November 10. Please consider this a CLOSED POSITION while we see what the final numbers are.
Energy Focus (EFOI)(6/5/08). Awarded additional $100,000 to develop high efficiency solar module with DARPA fund consortium.
Microvision (MVIS)(5/20/08). Lands order for SHOWWX laser Pico projectors with leading mobile phone operator. Stock gets clocked on worse than expected loss; balance sheet still looks okay.
GlobalSCAPE (GSB)(5/20/08). Company’s Enhanced File Transfer Server receives certificate of networthiness. To announce FY results on November 10. Named to Deloitte’s 2009 Technology Fast 500.
Biolase (BLTI)(4/5/08). Announces new gum disease treatment. Sets earnings call for November 5. To present at the AeA confab on November 3.
Amicas (AMCS)(1/20/08). Sets earnings call for November 3.
Nanophase Technologies (NANX)(1/20/08). Recent quarterly numbers not great; balance sheet still looks okay.
Hollywood Media (HOLL)(1/5/08). Schedules earnings release for November 4.
Continucare (CNU)(11/20/07). Buys two more sleep disorder centers.
Linktone (LTON)(11/5/07). Announces results of 2009 shareholders meeting.
American Technology (ATCO)(10/5/07). Receives LRAD order from China for national law enforcement. Also, $1.6 million in new LRAD orders from the U.S. Army and Navy.
XATA (XATA)(9/20/07). Wins 2009 Tekne “Technology Service” award. Debuts new Reefer Management capability.
Alliance Fiber Optic (AFOP)(7/20/07). To present at the AeA confab on November 3. Declares special cash dividend. Recent quarterly results about as expected; balance sheet still looks strong.
Pharmacyclics (PCYC)(6/20/07). Balance sheet strengthens due to recent secondary offering.
ECTel (ECTX)(5/5/07). Being acquired by cVidya Networks for $1.26 a share. Transaction should be final by end of the year. So, for now, consider this a CLOSED POSITION.
Urologix (ULGX)(2/20/07). Posts upbeat quarterly numbers; balance sheet still looks okay.
Endologix (ELGX)(1/20/07). Recent quarterly numbers look pretty good, as does balance sheet.
Lantronix (LTRX)(12/5/06). To report quarter results on November 5.
YM Biosciences (YMI)(11/5/06). Reports additional results from Nimotuzumab Phase III study in children with Glioma presented by Oncoscience Ag.
The Inventure Group (SNAK)(3/5/06). Reports 7th consecutive quarter of year-over-year earnings growth and new distribution gains; balance sheet still looks okay.
8×8 (EGHT)(1/20/06). Latest numbers look decent with really good earnings; balance sheet still seems steady. Awarded new U.S. patent in Internet telephony. Ranked one of the fastest growing companies in North America on Deloitte’s 2009 Technology Fast 500. And no, we haven’t a clue as to why the stock is only trading at slightly over a dollar.
RAE Systems (RAE)(10/5/05). To announce earnings November 4.
Our picks for this Newsletter are an application software developer and another drug developer, both NASDAQ-listed.
TIGERLOGIC CORPORATION (NASDAQ: TIGR) – $3.00. Twelve-month hi-low has been $4.75 – $1.00. Based in Irvine, CA, with about 80 employees, this application software maker has 26.8 million shares outstanding, $13.24 million in total current assets, $41.1 million in total assets, little debt, and $6.64 million in total liabilities. Institutional ownership is under 2%. www.tigerlogic.com
If you really believe that a major rebound in tech stocks is afoot, then TigerLogic Corporation may be worth a stab, since it could benefit from an updraft from the whole sector. The company has a pretty decent balance sheet, although it, like many others, took a revenue hit over the last year.
Formerly Raining Data Corp., the company was created in 2000 by merging Pick Systems and Omnis Technology and has been trading on the NASDAQ for nearly eight years. Basically, TigerLogic designs and sells software infrastructure. It offers TigerLogic Yolink, a browser-based search enhancement tool that provides “xray vision” into any Web page and its embedded links; TigerLogic XDMS, an enterprise native XML database management server with data and document centric capabilities; and multi-dimensional databases that consist of a D3 data base management system, which runs on various operating systems that allow application programmers to create new business solution software in less time than it normally takes in other environments. In addition, the company offers continuing maintenance, customer support, and professional and training services.
TigerLogic serves more than a half million active users representing over 20,000 unique customer sites worldwide. Its strategic partners include DataDirect Technologies, Stylus Studio, Microsoft, NetBeans, Red Hat, Sun Microsystems, and AccuSoft.
At the end of September, TigerLogic announced the general availability of Omnis Studio 5, which introduced the new Omnis Mobile Client allowing developers to create apps for the growing range of Windows Mobile-based devices, including Smartphones, PDSs, tablet PCs, and other mobile devices. Enhanced localization features and full Unicode compatibility provides support for thousands of languages and a wealth of scientific notation.
For the FY, ending 3/31/09, revenue was $16.25 million with $5.14 million in losses. During the 1stQT of its current FY, ending 6/30/09, revenue was $3.58 million with $297,000 in profits. Will its first quarter set the trend for the next year?
TigerLogic seems to have some nifty technology that could do well should the recent tech rally hold up.
Our 24-month target for the stock is $4.75 to $5.50.
For more information, contact TIGR at 949-442-4400.
DYNAVAX TECHNOLOGIES CORPORATION (NASDAQ: DVAX) – $1.25. Twelve-month hi-low has been $3.35 – 15 cents. Located in Berkeley, CA, with about 150 employees, this drug developer has 39.9 million shares outstanding, $56.45 million in total current assets, $69.14 million in total assets, little debt, and $44.54 million in total liabilities, of which nearly $18 million is deferred long term liability charges. Institutional ownership is around 14%. Three analysts have the stock as a “hold”. www.dynavax.com
Yes, another one of those small biotechs, and like many of them Dynavax Technologies Corporation has a healthy-looking balance sheet, but, it also has some interesting vaccines that are in various clinical stages. The company recently gained attention because of its flu vaccine that is still in development.
Formerly known as Double Helix and founded in 1996, and trading on NASDAQ four nearly five years, Dynavax is developing a pipeline of Toll-like Receptor (TLR) product candidates. Based on its proprietary technology platform, these products specifically modify the innate immune response to infectious, respiratory, autoimmune, and inflammatory diseases. The company’s product candidates include HEPLISAV, a Phase 3 clinical stage product for the treatment of hepatitis B vaccine; SD-101, a Phase 1b clinical stage product for treating hepatitis C infection; and DV-601, a Phase 1b clinical stage product for treating hepatitis B infection. Its preclinical stage products include Universal Flu vaccine for influenza prevention; AZD1419 for treating asthma; and DV1079 for treating autoimmune and inflammatory diseases.
Dynavax’s product programs are supported by global partnerships with GlaxoSmithKline for its TLR inhibitor therapies; AstraZeneca for the asthma/COPD therapies; and Novartis for its Universal Flu vaccine, which is also partially funded by NIH grants. The company’s hepatitis C therapy is funded under a $50 million agreement with Symphony Capital.
At the end of September, Dynavax initiated a Phase 3 registration trial in chronic kidney disease patients for HEPLISAV hepatitis B vaccine.
For FY2008, ending 12/31/08, revenue was $37.09 million with $20.83 million in losses. During the first six months of the current FY, ending 6/30/09, revenue was $35.22 million with $7.21 million in net income.
It seems obvious that Dynavax has some promising drug candidates in its pipeline insomuch as some pretty big pharmas have shown their support.
Our 24-month target for the stock is $2.25 to $2.50.
For more information, contact DVAX’s Amy Figueroa at 510-665-7211; afigueroa@dynavax.com
Look for the November 20, 2009 Newsletter to be posted on 11/16 or 11/17.
Thank you,
George