***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 four positions; three for okay gains and one for a loss.
DELTATHREE (1/5/07). Closed position 3/17/07 at $1.95 for a 56% GAIN.
RIT TECHNOLOGIES (8/5/06). Closed position 3/5/07 at $1.67 for a 52% GAIN.
CHORDIANT (9/20/04). Closed position 3/2/07 at $9.40 for a 45% GAIN. (price reflects reverse split)
INSMED (11/5/03). Closed position 3/2/07 at $1.55 for a 49% LOSS.
DeltaThree had a nice pop on news of a deal with Panasonic, and, even though DDDC could go higher, we’ll take the 56% in this market climate. Same goes for RiT Technologies, which could also go higher, but we’re happy with the 52% gain. Chordiant may, too, have more life left, but, because of the reverse split, which surprisingly worked out, it is now way out of our range. It was time to close Insmed, which was on the “Endangered List” and in the Current Portfolio way longer than we liked.
So, have you lost all faith in the market, yet? If so, you are not alone, which means this collective pessimism is usually a buying opportunity, or at least a great time to window shop. We can’t help but feel there should be many stocks in our beaten up Current Portfolio that are at fire sale prices.
Here are the headlines since the last Newsletter about companies in our Current Portfolio. Dates in parentheses are when we first recommended them.
CommTouch (CTCH) (3/5/07). Cyberoam integrates CommTouch for real-time spam detection. Claims it can stop Bagle Worm.
Eon Communications (EONC) (2/5/07). Stock takes a hit on disappointing 2ndQT numbers, but CEO expects improvements in current quarter; balance sheet still looks okay.
Endologix (ELGX) (1/20/07). First thoracic patient successfully treated with company’s Powerlink dissection stent system.
Etrails (ETWC) (1/20/07). Says top 10 pharma selects eClinical software for third consecutive trail.
Critical Therapeutics (CRTX) (1/5/07). Enters into promotion pact with Dey, L.P. for respiratory care products.
Neose Technologies (NTEC) (12/20/06). Gets FDA clearance to start clinical trials for NE-180. Closes $43.3 million private placement, which may be a short to medium-term drag on the stock, but could be good for company’s long-term health. Slates earnings call for March 19.
YM Biosciences (YMI) (11/5/06). CE Unterberg Towbin gives the stock a “buy”. Completes enrollment of AeroLEF Phase IIB pain trial.
HealthStream (HSTM) (10/20/06). Buys private research firm and boosts its 2007 outlook.
Autobytel (ABTL) (10/5/06). Year-end numbers nothing to cheer about; balance sheet still looks good, but weaker from a year earlier.
Hydrogencis (HYGS) (9/20/06). To release earnings report March 21.
TVI Corp (TVIN) (9/5/06). Receives order for surge capacity systems from Lehigh Valley Hospital and Health Network. Completes independent probe of sale to SSES and finds no wrongdoing. Yearly numbers seem pretty good, but company suffers a slight 4th QT loss; balance sheet could look better.
Advanced Life Sciences (ADLS) (7/20/06). Announces that Cethromycin is given FDA orphan drug designation for anthrax. To host earnings call March 22.
NTN Buzztime (NTN) (7/5/06). Year-end results show improved revenue growth, but losses widen; balance sheet still looks good.
Point Therapeutics (POTP) (7/5/06). Receives non-compliance letter from NASD. This is on the “Endangered List”.
Curis (CRIS) (6/5/06). Selects first development candidate from its targeted cancer drug development platform.
02Diesel (OTD) (5/20/06). Dutton Associates gives the stock a “speculative buy” rating.
Kintera (KNTA) (5/5/06). Slates earnings call for March 29. Names new CEO.
ThermoGenesis (KOOL) (4/5/06). Lands three additional U.S. patents. Addresses disposable bag shortage.
Cytogen (CYTO) (3/20/06). Launches commercialization of CAPHOSOL. Initiates NCI-sponsored Phase 2 clinical trial of QUADRAMET with targeted cancer vaccine for hormone-refractory prostate cancer.
Inventure Group (SNAK) (3/5/06). B. Riley & Co. rates the stock a “buy”.
Lipid Sciences (LIPD) (2/20/06). Year-end balance sheet still looks okay. New data validates LIPD’s HDL selective delipidation process presented at CRT 2007.
Adherex (ADH) (2/20/06). Outlines corporate goals for 2007. To present data on European Phase Ib/II trial of ADH-1. Completes buy out of Eniluracil.
Gateway (GTW) (2/5/06). Somehow, stock has been making a comeback in this highly turbulent market. Enhances server line. Former finance execs found liable in fraud case.
Digital Angel (DOC) (12/20/05). Year-end numbers so-so; balance sheet weakens. Reaffirms 2007 revenue guidance of $73 – $78 million, which would be about 35% over 2006.
Fusion Telecom (FSN) (12/5/05). To showcase products at info tech show in Germany March 15 – 22. This one’s making us real nervous and we are placing it on the “Endangered List”.
Westell (WSTL) (10/20/05). Subsidiary named as Chicagoland Chamber of Commerce affinity partner for conferencing services.
Nephros (NEP) (9/20/05). Completes informational request from FDA on investigational device exemption application.
Entremed (ENMD) (9/5/05). Year-end cash/equivalents look healthy. Commences NCD Phase 2 clinical trial in renal cell cancer.
Zi Corp (ZICA) (8/5/05). To release yearly numbers March 27.
N.A. Scientific (NASI) (8/5/05). Quarterly numbers not great as loss widens; balance sheet weakens. Company optimistic about Radiation Sources segment.
Innodata (INOD) (7/5/05). Year-end results not great; balance sheet still seems okay. Sees improved 2007. Selected by Simon and Schuster to digitize backlist titles for its digital archive.
Lime Energy (ELCY.BB) (7/5/05). Year-end preliminary results. This is on the “Endangered List”. Commerce Energy (EGR) (6/5/05). Expects $6.5 million settlement payment from APX. Quarterly numbers look nice; balance sheet shows pretty rapid cash burn, but accounts receivable (net) jump by around 40%.
Vion Pharma (VION) (5/20/05). Year-end balance sheet still looks healthy.
B.O.S. (BOSC) (1/5/05). Announces $5 million rights offering.
Applied Micro Circuits (AMCC) (11/20/04). Shareholder meeting news. TimeSys introduces LinusLink subscriptions for AMCC 440Epx processors. Introduces new technologies.
Nova Measuring (NVMI) (11/5/04). Introduces enhanced version of a development tool. Judge grants Nova stay in lawsuit. Announces $5 million private placement, which may put pressure on stock price.
AIXTRON (AIXG) (7/5/04). Yearly results look promising as does 2007 outlook.
Network Engines (NENG) (6/5/04). Selected by Bradford Networks to build network access control appliance family.
Socket Communications (SCKT) (3/20/04). Unveils new handheld computer for business mobility market. This is on the “Endangered List”.
Open TV (OPTV) (3/20/04). Launches on DishTV, India’s first satellite service. Annual results show nice revenue growth and some loss widening; balance sheet still looks good.
AVANT Immuno (AVAN) (12/5/03). Year-end balance sheet shows major jump in long-term liabilities. Time to rethink this, finally.
Our picks for this Newsletter are a software provider and a medical diagnostics supplier, both trade on NASDAQ.
ZIX CORPORATION (NASDAQ: ZIXI) – $1.55. Twelve-month hi-low has been $1.93 – 51 cents. Based in Dallas, TX, with about 200 employees, this software/services provider has 59.6 million shares outstanding, $15.7 million in total current assets, $20.36 million in total assets, and $19.35 million in total liabilities, of which $2.84 million is long-term debt. Institutional ownership is around 23%. One analyst rates the stock a “strong buy”. www.zixcorp.com
We would like to see fewer liabilities on their balance sheet, but Zix Corporation has been turning in some nice revenue growth and shows a major paring in the loss column of its P&L. However, what prompts us to add ZIXI to the Current Portfolio is that the company seems to be carving a niche in a much-need area of the healthcare industry,
Founded as Amtech Corp. in 1983, and public since 1989, Zix provides e-communications services that protect, manage, and deliver sensitive information to consumers and enterprises in healthcare, finance, insurance, and government. It bills itself as the leading provider of hosted email encryption and e-prescribing services, which it calls eSecure and eHealth solutions. The eSecure offers secure messaging solutions, such as email encryption and content filtering. These solutions also include e-messaging gateway, which provides company-wide protection for inbound and outbound email communications; a secure Web messaging portal; a desktop solution for encryption and delivering email; and an assessment service used to analyze email traffic patterns and monitor regulatory policies. The company also offers access to a industry-leading seven million protected email addresses through its ZixDirectory, which now includes three of the top five health insurers and about half of the Blue Cross/Blue Shield plans in the U.S.
Zix’s eHealth solution comprises the e-prescription, called PocketScript, which allows a physician to write prescriptions and transmit them to a pharmacy via a PDA or Web site. It provides access to a drug reference guide, insurance formulary data, and checks for drug interactions. Zix has strategic partnerships with MedAplus, eClinicalWorks, RxHub, and SureScripts. During 2006, it’s ePrescribing revenue was up 43% over 2005.
This company doesn’t seem to be standing still. In February, Virtua Health chose Zix for email encryption service; introduced ZixConnect to provide more secure communications among financial institutions; renewed its contract with MVP Health Care, which has 750,000 members; and announced that the FDIC will now use the Zix email encryption service.
For FY2006, ending 12/31/06, revenue was $18.35 million with $19.42 million in losses compared to 2005 revenue of $13.96 million and $43.6 million in losses. Yes, marked improvement in both the top and bottom lines, but Zix needs to bring the losses down a lot more, soon.
The company seems to be making some crucial turning points, and the next several quarters should tell us if Zix still appears to be on the right track.
Our 24-month target for the stock is $2.50 to $3.00.
For more information, contact ZIXI’s Peter Wilensky at 214-515-7357; invest@zixcorp.com
IMMUNICON CORPORATION (NASDAQ: IMMC) – $2.90. Twelve-month hi-low has been $6.05 – $2.63. Located in Huntingdon Valley, PA, with about 100 employees, this medical diagnostics provider has 27.7 million shares outstanding, $58.78 million in total current assets, $65.77 million in total assets, and $45.57 million in total liabilities, of which $2.6 million is long-term debt and $20.3 million is in convertible notes. Institutional ownership is around 23%. One analyst rates the stock a “strong buy” and another has it on “hold”. www.immunicon.com
One good thing about a tanking market is that you get an idea of how low a stock may get, such as Immunicon Corporation, which has been trading near its all-time low. Other favorables are a half-decent balance sheet, improved revenues, and some promising products.
Founded in 1983, and public since 2004, Immunicon develops and sells diagnostic and research products for rare cell analysis and molecular research, with the main emphasis on cancer. Its instruments and reagents are used to capture, count, and characterize rare cells, including circulating tumor cells (CTCs) in cancer patients or circulating endothelial cells (CECs) which are elevated in various diseases. The company employs its technologies to provide analytical services to pharmaceuticals and biotechs to assist them in developing new therapeutic agents.
Immunicon offers CellSave Preservative Tube, an evacuated blood collection tube with preservative; CellTracks AutoPrep System, an automated instrument to capture and label cells from 7.5 ml blood samples; CellTracks MagNest Cell, which presents magnetically labeled cells for analysis; CellSpotter Analyzer; CellTracks Analyzer II, which is a semi-automated fluorescence microscope used to count and characterize cells; CellSearch Circulating Tumor Kit, used for counting CTCs in blood; and about half a dozen more diagnostic kits.
The company has agreements with Veridex, LLC, KREATECH Biotechnology, Research and Diagnostic Systems, Inc., Novartis, and Pfizer.
At the end of January, Immunicon entered into two separate agreements with Novartis for research services and laboratory master services. Also, in that month, the company announced that the late stage clinical study of its CellSearch Circulating Tumor Cell Kit predicts prostate cancer patient survival.
For FY2006, ending 12/31/06, revenue was $8.67 million with $24 million in losses compared to FY2005 revenue of $4.64 million and $27 million in losses. The company is expecting around a 40% increase in revenues for 2007 (we hope the losses can be shaved even more).
Immunicon has a lot in the hopper and it also has some pretty big-name customers.
Our 24-month target for the stock is $4.50 to $5.50.
For more information, contact IMMC’s James Murphy at 215-830-0777, ext. 121; jmurphy@immunicon.com
Expect the April 5, 2007 Newsletter to be posted on 4/2 or 4/3.
Thank you,
George