***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,
Just when it appeared that our Current Portfolio was digging out of the hole caused by the late summer massacre, POW! Europe raised its ugly head, again, and during the latter half of November the markets saw their worst action since the 1930s for that time period. When the financial media begins to use the 1930s as a comparison to present day ills, it’s not good. You have all heard and read about the reasons as to why the markets are caving, but the unspoken underlying reason is the simple fact that world leadership stinks, starting with our own.
And, that is why the world’s central banks colluded to pump more liquidity into the banks and the markets at the end of November. World leaders cannot get a handle on their respective countries’ debts and that is draining money from private sectors. In other words, this action by the central bankers is a band aid, which makes everyone feel good for a few weeks. So, enjoy the moment. It may be fleeting.
Here are the headlines since the last Newsletter about companies in our 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.
FSI International (FSII)(11/20/11). Receives follow-on order for its ORION System from a leading semiconductor producer.
Anadigics (ANAD)(11/20/11). Expands family of 4G power amplifiers.
ECOtality (ECTY)(11/5/11). To install EV charging stations at select Wal-Mart stores.
BioDelivery Sciences (BDSI)(11/5/11). U.S. Patent Office rejects all 191 claims in key MonoSol patent asserted against BDSI; yes, this is viewed as good news.
BioMimetic Therapeutics (BMTI)(9/20/11). Research firm Collins Stewart initiates a “buy” on the stock.
Celldex Therapeutics (CLDX)(9/20/11). Says its brain cancer vaccine is promising in trial.
Satcon Technology (SATC)(8/5/11). Launches industry ‘leading’ inverter performance management capabilities with EDGE Adaptive Control Architecture (ACA).
Antares Pharma (AIS)(8/5/11). Announces issuance of new U.S. patent covering LibiGel.
Galena BioPharma (GALE)(7/5/11). Announces clinical development collaboration with Genentech/Roche to develop NeuVax. Announces NeuVax poster presentations at the annual CTRC-AACR breast cancer symposium.
On Track Innovations (OTIV)(6/20/11). Recent numbers lower than expected; balance sheet still looks good. Signs $7 million core technology license agreement.
Idera Pharmaceuticals (IDRA)(6/5/11). Regains global rights to IMO-2055 in oncology from Merck.
GSE Systems (GVP)(4/20/11). Announces $7.5 million credit facility with Susquehanna Bank.
Jamba, Inc. (JMBA)(3/20/11). To present at Wedbush conference on December 7.
Network Engines (NEI)(2/5/11). Announces customer portal enhancements for real-time access and control of global manufacturing and logistics.
Sprint Nextel (S)(1/5/11). The usual several dozen stories and releases. Most important is probably that the AT&T and T-Mobile merger appears on the skids. This news would probably have seen the stock price much higher, but the current market conditions appear to have dampened enthusiasm, as is the case with many our picks that have released good news.
Astex Pharmaceuticals (ASTX)(12/5/10). To present at the World Epigenetics Summit on December 8.
Inovio Pharmaceuticals (INO)(10/20/10). Says its synthetic avian flu vaccine demonstrates inhibition of multiple H5N1 strains in Phase I trial.
ProPhase Labs (PRPH)(10/5/10). Cold-EEZE cold remedy awarded Parent Tested Parent Approved (PTPA) Seal of Approval, which helped the stock soar, one of the few exceptions in this market.
NovaBay Pharma (NBY)(4/20/10). Establishes primary proof of concept for NVC-422 Phase 2 UCBE clinical program.
Novavax (NVAX)(4/5/10). Acquires new manufacturing and office facilities in Gaithersburg, MD.
Cytokinetics (CYTK)(2/5/10). Announces positive results from Phase II clinical trial evaluating CK-2017357 in patients with ALS. Opens third Phase II clinical trial of CK-2017357 in patients with ALS. Files replacement shelf registration statement.
USA Technologies (USAT)(6/5/09). Connects AMI Entertainment to ePort Connect Service.
GlobalScape (GSB)(5/20/08). Names new CEO.
Hollywood Media (HOLL)(1/5/08). Latest quarterly numbers not real good; balance sheet still okay, but has weakened considerably over last nine months. We have placed this on the “Endangered List”.
Move, Inc. (MOVE)(1/5/08). They just did a 1 for 4 split, which no longer makes this a penny stock; so, we are placing this on the “Endangered List”.
LRAD Corporation (LRAD)(10/5/07). To release FY financial results on December 5. Receives a follow-on LRAD order for bird preservation at international mining site.
Our picks for this Newsletter are a diagnostics developer and a lighting manufacturer, both NASDAQ-listed.
VERMILLION, INC. (NASDAQ: VRML) – $1.33. Twelve-month hi-low has been $9.49 – $1.17. Based in Austin, TX, with about 26 employees, this maker of diagnostics 23.62 million shares outstanding, $27.79 million in total current assets, $28 million in total assets, and $14.9 million in total liabilities, of which is $7 million is long-term debt. Institutional ownership is around 16%. Four analysts rate the stock as a “strong buy” and one as a “hold”. www.vermillion.com
One of the reasons that Vermillion, Inc. stock price has taken a tumble is that there is a litigation cloud hanging over the company. However, this is not scaring off the analysts who are still high on the company. Also helpful is that the company has a decent pile of cash and some promising products.
Founded in 1993 as Ciphergen Biosystems, and public for over ten years, Vermillion is developing diagnostic tests in the fields of oncology, hematology, cardiology, and women’s health with the initial focus on ovarian cancer. It combines multiple biomarkers into a single, reportable index score. Its lead product includes OVA1 ovarian tumor triage test (the OVA1 test), which addresses pre-surgical identification of women who are at high risk of having malignant ovarian cancer. The OVA1 is the first blood test cleared by the FDA for evaluating an ovarian adnexal mass prior to planned surgery. The test uses a panel of five biomarkers that may help identify women with cancer so they can be referred directly to a gynecologic oncologist for their initial surgery. During the last quarter, ending 9/30, over 4100 of these tests were performed.
Vermillion is also developing VACLIR in collaboration with Stanford University to help physicians in diagnosing Peripheral Artery Disease (PAD), which is a disorder affecting about 12 million Americans and that is under-diagnosed and under-treated. The company also has collaborations with The Johns Hopkins School of Medicine, University College London, The University of Texas Medical Branch, The Katholieke Universiteit Leuven, Copenhagen University Hospital, OSU Research Foundation, and the University of Kentucky. The company also has a strategic relationship with Quest Diagnostics to develop and commercialize up to three diagnostic tests.
In early November, Vermillion received a Notice of Allowance for its fifth biomarker patent related to PAD.
Vermillion is another one of those small healthcare stocks with little revenue and mega losses. For example, for the quarter ending 9/30/11, revenue was $206,000 with $4.65 million in losses.
We like the analysts who are lined up behind the company. We like the OVA1 test. We like the institutions that collaborate with the company. And, we like the stock price at this level.
Our 24-month target for the stock is $2.25 to $2.50.
For more information, contact VRML at 512-519-0400; info@vermillion.com
NEXXUS LIGHTING, INC. (NASDAQ: NEXS) – $1.22. Twelve-month hi-low has been $4.36 – $1.07. Based in Charlotte, NC, with about 30 employees, this lighting manufacturer has 16.45 million shares outstanding, $8.68 million in total current assets, $14.7 million in total assets, and $4.17 million in total liabilities, of which $2.3 million is long-term debt. Institutional ownership is around 27%. Two analysts rated the stock a “strong buy”. www.nexxuslighting.com
The first thing to say about Lexxus Lighting, Inc. is that this can be called another ‘boring’ company. However, despite the slow demand, for now, for its products, the company is seeing revenue growth while paring its losses. Also, the stock price, at these levels, appears to be real cheap.
Founded in 1991 as Super Vision, Int’l, and public since 1994, Lexxus makes and sells light emitting diode (LED) replacement light bulbs and LED-based signage, channel letter, and contour lighting products in the U.S., Canada, and internationally. It offers white light LED replacement bulbs for commercial, hospitality, entertainment, institutional, and retail locations; and general LED lighting in signage and lighting strips. Lexxus sells its products under the Array Lighting and Lumificient brand names, which are distributed through multiple networks of independent sales reps and distributors.
Lexxus has a deal with Lowe’s to sell its products in-store, but, as everyone knows, LED lights, though they help drive down electricity costs, have some pricey upfront costs. However, China recently announced that within a year it will begin banning incandescent bulbs, which should great boost the fortunes of companies like Lexxus. And, don’t forget that the U.S. and the EU will start phasing them out next year, as well.
For FY 2010, ending 12/31/10, revenue was $5.42 million with $8.01 million in losses. During the first nine months of the current FY, ending 9/30/11, revenue has been $7.73 million with $3.26 million in losses. However, these numbers, while a huge improvement over 2010, did not live up to expectations, which were fueled by the company.
It is only a matter of time before LED buying builds up a nice head of steam. Even so, we still like the company’s “disappointing” numbers for 2011. And, don’t forget the low stock price.
Our 24-month target for the stock is $2.00 to $2.25.
For more information, contact NEXS at 704-405-0416; investor.relations@nexxuslighting.com
Look for the December 20, 2011 Newsletter to be posted on 12/16 or 12/19.
Thank you,
George