Pharma companies MannKind (NASDAQ:MNKD), Roche Holding (OTC:RHHBY), and Acorda Therapeutics (NASDAQ:ACOR) have seen stock price moves on FDA news. Will the magic work for Spectrum Pharmaceuticals (NASDAQ:SPPI) on January 30?

by J. Christoph Amberger

Baltimore, MD: On Dec. 30, TFN posted a list of upcoming FDA announcement dates: Upcoming FDA decision dates… and the companies that may benefit.

As you well know, a yea or nay from the FDA can sink a stock… or propel it upward — completely independent of the relative worth or value of the underlying drug or medication. So far this year, the stocks we listed have validated FDA approval as a catalyst of trading activity:

* FDA decision Jan. 16, 2010: MannKind Corporation (NASDAQ:MNKD), regarding preliminary approval an inhaled insulation device called Afresa.

Share price as of 12/30/2009: $8.55; closing price last Friday (1/22): $10.27. Gain: 20.11%

* FDA decision due Jan. 18, 2010: Roche Holding Ltd. (OTC:RHHBY), regarding approval for the use of Taceva for the treatment of lung cancer in patients already responding to chemotherapy. Share price as of 12/30/2009: $42.18; closing price last Friday (1/22): $44.05. Gain: 4.43%.

* FDA decision due Jan. 22, 2010: Acorda Therapeutics (NASDAQ:ACOR), regarding new drug application review for Fampridine-SR to be used to improve conduction in nerve fibers when the insulating layer (myelin) has been damaged. Share price as of 12/30/2009: $25.39; closing price as of Friday (1/22): $28.12. Gain: 10.75%.

What’s next?

FDA decision due: Jan. 30, 2010: Spectrum Pharmaceuticals (NASDAQ:SPPI), regarding the results of a meeting with the FDA to discuss the viability of continuing to seek approval for Fusilev for the treatment of colon cancer will be announced. Share price as of 1/22: $4.81.

Follow our continued free coverage at my blog!

Similar Posts:

• Upcoming FDA decision dates… and the companies that may benefit – December 30, 2009
• Three picks for a weak dollar – October 15, 2009

Article first published on Today's Financial News

The FDA catalyst: 2010 moves in MannKind (MNKD), Roche Holding (RHHBY), Acorda Therapeutics (ACOR) show it still works!

Alex Green, Investment Director for The Oxford Club and regular contributor to Investment U, shares some of his investment strategies for the coming year.

Alex Green (Investment U):

At 11:38 AM on January 28, 1986, the space shuttle Challenger lifted off its launch pad at Cape Canaveral in Florida.

Seventy-four seconds later – and 10 miles higher – it blew up.

The launch was televised live, so the news spread quickly.

The stock market didn’t stop to mourn… Within minutes, investors began bailing out of the four major shuttle contractors:

• Rockwell International, which built the shuttle and its main engines.
• Lockheed Martin, which managed ground support.
• Martin Marietta, which manufactured the ship’s external fuel tank.
• Morton Thiokol, which built the solid-fuel booster rock.

All four stocks were hit hard initially. But by the end of the day, three of them were down just slightly. Only Morton Thiokol closed sharply lower.

While there were no public comments that day singling out Thiokol as the guilty party – and it would be six more months before a Presidential Commission revealed that the company’s O-ring seals were the culprit – the stock market almost immediately labeled Thiokol as the company responsible for the disaster.

So how did the market know something that even NASA scientists didn’t? Author James Surowiecki calls it “the wisdom of crowds.” And there’s evidence of it all around us…

Follow the Experts or Follow the Masses?

Take the economy, for example. No individual is smart enough to know where to put the dry cleaners, tire stores, banks, or coffee shops in your community. But rational, self-interested people – as if directed by Adam Smith’s famous “invisible hand” – will provide what we need, where we need it and when we need it.

That’s why free markets work and command economies don’t.

Or consider the TV show “Who Wants to Be a Millionaire?” When a contestant got stuck on a question and was allowed to ask an expert of his choice, the expert gave the right answer 65% of the time. But when the contestant polled the audience – a random group of people with nothing better to do on a weekday afternoon than sit in a TV studio – they picked the right answer 91% of the time.

My point? We prize and honor individual intelligence. Yet counter-intuitive as it seems, crowds are usually smarter than the experts.

Unfortunately, they’re also more emotional. And that often leads to disaster. Especially when it comes to investing…

Click here for the rest of Mr. Green’s article at Investment U.

Article first published on Today's Financial News

Outlook 2010 – Strategies for the coming year and beyond

We’ve compiled a list of January and February FDA decision dates – and the companies that could see massive movement in their share price as those dates approach.

by Laura Cadden, TodaysFinancialNews.com

Baltimore (TFN): Favorable FDA decisions can mean resounding gains for pharma investors…

Vanda Pharmaceuticals (NASDAQL:VNDA) experienced an 800% increase in share price when it when the FDA granted approval for Fanapt, a drug to treat schizophrenia, back in May.

On Dec. 1, Santarus Inc. (NASDAQ:SNTS) announced its heartburn medication, Zegerid, was approved by the FCA. The Stock went up over 40% in 24 hours.

More modest (but still significant) was the 20% increase Dyax Corp. (NASDAQ:DYAX) saw on Dec. 2 when it was announced that the company’s treatment for the genetic disorder hereditary angiodema, Kalbitor, had received FDA clearance.

So what company could be next for these kinds of gains?

Below is a list of January and February FDA decision dates – and the publicly traded companies that could see massive price movement in their share prices as those dates approach:

FDA decision due: Jan. 16, 2010
MannKind Corporation (NASDAQ:MNKD)
Regarding: Preliminary approval an inhaled insulation device called Afresa.
Share price as of 12/30/2009: $25.40

FDA decision due: Jan. 18, 2010
Roche Holding Ltd. (OTC:RHHBY)
Regarding: Approval for the use of Taceva for the treatment of lung cancer in patients already responding to chemotherapy.
Share price as of 12/30/2009: $42.18

FDA decision due: Jan. 22, 2010
Acorda Therapeutics (NASDAQ:ACOR)
Regarding: New drug application review for Fampridine-SR to be used to improve conduction in nerve fibers when the insulating layer (myelin) has been damaged.
Share price as of 12/30/2009: $25.39

FDA decision due: Jan. 30, 2010
Spectrum Pharmaceuticals (NASDAQ:SPPI)
Regarding: The results of a meeting with the FDA to discuss the viability of continuing to seek approval for Fusilev for the treatment of colon cancer will be announced.
Share price as of 12/30/2009: $4.42

FDA decision due: Feb. 9, 2009
XenoPort, Inc. (NASDAQ:XNPT)
Regarding: FDA review results of gabapentin encarbil for the treatment of moderate-to-severe primary Restless Legs Syndrome.
Share price as of 12/30/2009: $18.48

FDA decision due: Feb. 11, 2009
Labopharm Inc. (NASDAQ:DDSS)
Regarding: Approval of Trazodone Contramid for depression.
Share price as of 12/30/2009: $2.03

FDA decision due: Feb. 12, 2009
Cadance Pharmaceuticals (NASDAQ:CADX)
Regarding: Approval of acetavance (intravenous acetamenophin) for the treatment of fever and pain.
Share price as of 12/30/2009: $9.73

FDA decision due: Feb. 13, 2009
Gilead Sciences (NASDAQ:GILD)
Regarding: Approval of Cayston for the treatment of cystic fibrosis.
Share price as of 12/30/2009: $43.93

FDA decision due: Feb. 28, 2009
Shire Pharmaceuticals (NASDAQ:SHPGY)
Regarding: Approval of velaglucerase to treat Gaucher’s disease (a genetic condition that causes fat buildups around internal organs).
Share price as of 12/30/2009: $58.20Similar Posts:

• The FDA catalyst: 2010 moves in MannKind (MNKD), Roche Holding (RHHBY), Acorda Therapeutics (ACOR) show it still works! – January 24, 2010
• The 3 Best Stocks under $3 to Buy NOW! – September 30, 2009

Article first published on Today's Financial News

Upcoming FDA decision dates… and the companies that may benefit

Louis Basenese, Small Cap and Special Situations Expert with Investment U, provides his small cap investment strategy – focusing on Merger & Acquisitions and how to track the fundamentals necessary for an active merger season.

Louis Basenese (Investment U):

The masses balked at my projection.

And, as they so often are, the masses were wrong.

It’s not like I went out on a limb or anything either. All I said in November 2008 was that investors should load up on small-cap stocks for 2009.

But boy, did I hear it: “You’re nuts. We’re in the throes of the worst financial crisis since the Great Depression. Small-caps will be lucky to make it out alive.”

I paid little attention to the criticism. And that’s simply because the historical precedent was undeniable.

Time and again, history has shown that small-cap companies traditionally outperform their larger-cap peers in the wake of a recession. It’s happened in every single one of the past 10 recessions.

And we can now extend that winning streak to 11.

Since the market bottomed out, the average small-cap stock has soared 74%, outpacing the gains of the average large-cap by a full 15 percentage points.

And history is sending another loud and clear message about what lies ahead for another sector, too.

In 2010, we can expect mergers and acquisitions (M&A) activity to return in a big way. Here’s why – and the three best ways to play the imminent rebound…

M&A Activity: Deep in the Valley… But Set to Emerge

Not since the early 1990s have we witnessed such a meager market for M&A activity…

Worldwide deal volume is expected to slump by 56% this year, according to the Organization for Economic Cooperation and Development (OECD).
The United States has already matched the 61% drop in M&A activity that followed the 1990-1991 recession. We’re not far from the 72% drop that followed the 2001 recession.
But everybody knows the M&A market is notoriously cyclical. Since we’re clearly in the valley, it’s only a matter of time before activity picks back up.

And history is crystal clear about the timing of the turning point…

Click here for the rest of Mr. Basenese’s analysis at Investment U.

Article first published on Today's Financial News

Merger Mania – Small Cap strategies for 2010

Horacio Marquez, Editor of the Money Map Report and contributing editor for Money Morning, shares three ‘must-own’ stocks from Money Morning’s Outlook 2010 series.

Horacio Marquez (Money Morning):
When government boosts its involvement in the economy, there’s a predictable impact on interest rates, taxes, inflation, the country’s currency and even its stock market. As a veteran global investor, I’ve seen this play out time and again in emerging-market economies, where it’s commonplace for government to play an active and heavy-handed role.

I know from my years of experience just what to expect each and every time this story plays out. And that’s not all.

I also know how to turn this special knowledge into beat-the-market profits.

Here in the United States, the Obama administration and the U.S. Federal Reserve are like two elephants that have been put to work brutishly reshaping the U.S. economy. We’re already experiencing the effects of big government involving itself in the private sector. Expect the dollar to fall even more – after year-end profit-taking ends. Also expect a further deployment of government-stimulus money to industries where the United States has a large competitive advantage and can generate domestic jobs.

We’ll be only too happy to ride the resulting economic shifts for profit.

In fact, as part of this installment of “Buy, Sell or Hold” – I’ve identified three of the best profit opportunities for the New Year. The three “must-own” companies – each poised to benefit from these shifts – are: Corning Inc. (NYSE: GLW), The Boeing Co. (NYSE: BA) and Cypress Semiconductor Corp. (NYSE: CY). We offer them to you here as part of a Money Morning “Outlook 2010″ Special Report.

All three of these companies share five strengths. They each:

* Are sector leaders.
* Enjoy sustainable competitive advantages on a global basis.
* Have strong balance sheets.
* And are major exporters, meaning they will benefit from the weaker U.S. dollar that’s almost sure to come.

Let’s look at each of the three companies individually.

Click here for the rest of Mr. Marquez’s report at Money Morning.

Article first published on Today's Financial News

Buy, Sell, or Hold – Three winning plays for 2010

Sometimes the markets move faster or slower than we anticipate. That is certainly the case with the media industry and companies like McClatchy (NYSE:MNI).

By Andrew Snyder, TodaysFinancialNews.com

Baltimore – (TFN): My first prediction of 2010 came true in 2009. Just last week, in an issue of Notes From the Investment Underground, I made a bold statement.

I told readers the deal between Comcast (NASDAQ:CMCSA) and NBC had the media industry abuzz. I said to keep an eye on the sector as we enter the New Year.

We hit another bull’s eye.

If you follow the link and read the article, you’ll notice I say that McClatchy (NYSE:MNI) will be in play. Well, today shares of the newspaper publisher are up by over 14%.

How’s that for an accurate call?

Shares across the industry are on the rise today (bucking strong market headwinds), thanks to what can only be called less-horrible news from the advertising from.

Instead of the 30.2% decline in advertising revenues in the second quarter, or the 28.1% decline in the third quarter, McClatchy expects a decline of the low- to mid-20 percent range for the current quarter.

The end of a trend

Even better, especially if you work for the company, the publisher will lift its companywide salary freeze next month. That’s good news for the workers fortunate enough to stay clear of the nearly 4,000 jobs the company cut over the last year.

It’s a similar story over at the New York Times (NYSE:NYT), although shares are up by just over 1% so far today.

According to the company, advertising revenues are expected to drop 25% this quarter. The reduced bleeding has allowed the company to focus on cutting its debt. A year ago, the company was on the hook for $1.1 billion. Today, it owes $800 million.

The figures are far from indicative of a healthy industry, but it’s apparent the fallout has been abated.

Could 2010 be the year of the media turnaround? You know my vote. It’s already happening.Similar Posts:

• No bailout needed: Good news from the rags – September 29, 2009
• Bad news from the housing market – November 18, 2009
• A lot to think about today – December 8, 2009
• TFN eNews 11/16/2009: Other than that, things are fine! – November 16, 2009
• Where would you rather have your money? – November 20, 2009

Article first published on Today's Financial News

My first prediction for 2010 came true in 2009

There are all sorts of measurements to let us know when to jump into a stock, but how about getting out? It is a tough decision, but a recent debate sheds light on the subject.

By Andrew Snyder, TodaysFinancialNews.com

Baltimore – (TFN): When it comes to investing, there are almost as many profit strategies as there are stocks to invest in. Everybody’s got their opinions, and many of them will make you money. But nothing is more agreed upon than the notion of a stop loss.

Except, here at TFN headquarters.

Last week, Christoph, Laura and I got into what turned out to be an hour-long discussion of our various exit strategies. It was interesting, to say the least.

Of course, our opinions are highly biased. As marketers, portfolio managers and trading-service  operators, our actions sometimes stray from our philosophies. I won’t bore you with the details of our discussion, but I will let you in on our conclusion.

In this top-heavy, data-sensitive market, stop –losses are more important than ever.

The basic notion of a stop-loss, setting a firm sell point, has been beaten to death amongst financial pundits. There isn’t an editor or advisor out there that has not written about or discussed the subject.

But what many folks fail to tackle is how and when to set stop-losses. This was a vital topic of our discussion last week.

I will let the others fill you in on their opinions. For now, I will give you the details of how I manage the idea of how to get out and when.

Simple but effective

There are two uses for a stop-loss, protecting an investor from significant losses and locking in gains in case a position turns around and heads south.

Whether you use a plain-vanilla stop-loss or a dynamic trailing stop doesn’t really matter. What matters is at what price your exit is set to take place.

For many investors, 15% is a popular stop-loss for conservative plays, with 20% or even 25% used for more volatile plays.

With any stop-loss, volatility is an important, if not the most important variable. That’s why I propose a stop-loss strategy with volatility as the key determinant.

As traders, we have many ways of determining volatility, but the most common form (which is far from perfect) is through measuring beta. This statistical measurement shows how an asset’s price moves in relationship to a standardized baseline. In almost all cases, the S&P 500 is that baseline.

If a position has a beta score of 1, it moves in line with the broader market. If the figure is above 1, the asset is considered to be more volatile. Less than 1, the asset is less variable. And anything below zero moves the asset moves inversely to the market.

Like I said, it is not a perfect measure of volatility, but it works.

So, if a conservative stop-loss is 15%, let’s use that to represent a stock with a beta of 1.

If the S&P 500 dropped 15%, you would want to get out and cut your losses. If you made the move last October, it would have saved you a lot of money.

But what about a stock like General Electric (NYSE:GE) that has been unusually volatile over the past six months? With a beta score of 1.7, it is making moves almost twice as strong as the overall market.

Here’s what I propose for this volatile market. It’s overly simply, but in times like this it works like a charm.

Simply multiple the baseline stop-loss of 15% by the asset’s beta. For a stock like GE, that gives you a stop-loss of 25%, a fair figure given its recent up-and-downs.

How about a low-beta stock like Alaska Airlines (NASDAQ:ALK)?

Right now, its beta is just 0.28. Multiplied by 15%, that gives us a stop-loss of just 4.2% below current prices. It’s an ultra-low figure, but given the stock’s straight-up trend over the past six months, it makes sense.

This is far from a perfect method of setting stop-losses, but then again, stop-losses are far from an exact science. If you have ever studied Six Sigma, you know the key is to take notice whenever something is “out of control.” By using this simple, down-and-dirty calculation you can do just that.

It’s not perfect, but it works.

Article first published on Today's Financial News

Stop-loss strategy: When to pull the trigger

It is a pivotal day for the markets. Unemployment took a surprise trip downward, giving the dollar some well-needed strength. For a look at what the future holds, check out the gold market. It isn’t pretty.

By Andrew Snyder, TodaysFinancialNews.com

Baltimore – (TFN): What a difference a week makes. Five trading days ago, the Street was expecting yet another major collapse after news of Dubai debt trouble was brewing. Today, thanks to solid employment data, investors are in a partying mood.

So who’s right? Last week’s bears or this week’s bulls?

Chances are, none of them are right. To see why, all we have to do is look at the value of the dollar and its relationship with equities market over the past few months.

Almost without exception, the Dow has moved inversely to the dollar. When the greenback weakened against the euro, the equities market was green. When the dollar strengthened, we saw red.

But today is different. The dollar is up and the equities market is up.. or at least it started the day up. As I asked TFN Strategic Trader members earlier today, is it the start of a new trend or a one-day slipup?

My answer… don’t get used to it.

Going to get bad

The Dow is sitting at 10,400 not because of economic strength, but because of the trade-related benefits of a weak dollar. Because our currency is cheap, export revenues will rise and bottom lines will increase.

But thanks to today’s stronger-than-expected unemployment data, foreign investors are once again looking at our economy and wondering if rates will rise sooner rather than later.

If interest rates begin to rise, the dollar will gain strength fast. And that means all those points the Dow gained from a weak dollar will have to be given back. That is, if the markets remain rational.

In fact, it is already happening today.

If you’ve been watching the ticker tape, you’ve notice the markets gave back all of their early session gains as the dollar continues to increase in value. As I write, the euro is trading for $1.4877, 1.3% below yesterday’s settlement price of $1.5074.

That is not good news for gold bugs. The precious metal has given back a whopping $40 in valuation today, taking its worth (at least to today’s investors) to $1177, a decline of 3.4%.

So what’s an investor to do?

This is going to sound weird, but the better the news gets, the more cover you need to find. If the dollar continues to strengthen relative to its international brethren – especially the euro – the equities market will be forced to give buck much of the recent gains.

For the next month or so, I recommend oil shorts, domestic importers and, dare I say it, retailers. Most everything that has been categorically weak over the past four months is about to have its time in the spotlight.
I have been warning that it’s going to happen, and it finally has. Hopefully you were prepared.Similar Posts:

• TFN eNews 12/04/2009: A grim warning for the markets – December 4, 2009
• Long on Gold – Why the Bull’s run isn’t over! – November 23, 2009
• Worried about the dollar? – November 17, 2009
• Market dip: What to buy now – September 24, 2009
• Three picks for a weak dollar – October 15, 2009

Article first published on Today's Financial News

Warning! Crash imminent

The ethanol industry is not a headline maker, but it is making investors plenty of money. How do 1,500% gains sound?

By Andrew Snyder, TodaysFinancialNews.com

Baltimore – (TFN): The ethanol industry is having yet another good day. After near political abandonment, the nation’s biofuel sector reeled from the pain of a wave of bankruptcy filings earlier this year.

But now, thanks to some more political maneuvering the industry is once again finding itself on the leader board.

Should you get used to it?

Before we answer that question, let’s look at the catalyst for the action. Today was supposed to be the EPA’s deadline for a decision that would allow gasoline blends to contain up to 15% ethanol versus the 10% cap now in place.

But word this morning says the EPA is not ready to make its decision quite yet. It now wants to make the decision by sometime next summer. Judging by the day’s pricing action, the Street views this as a positive sign.

Companies across the industry are eager to push more of their product into the nation’s fuel source.

One of the big winners today is Pacific Ethanol (NASDAQ:PEIX), the once highly touted California-based producer with subsidiaries in and out of bankruptcy court over the past year.

Word that more ethanol production may be around the corner was enough for the company to pull the mothballs out of its Burley, Idaho production facility by January. The company owns a total of four production facilities, only one of which is currently operating.

If the word from the EPA is positive, expect shares to continue to climb. As I write, traders are getting in (and out) at $0.87, up 56% on the day.

Not a solo player

Two more companies worth mentioning are Green Plains Renewable Energy (NASDAQ:GPRE) and BioFuel Energy (NASDAQ:BIOF). Thanks to today’s action, shares of the two ethanol producers are up by 12% and 22%, respectively.

Today’s action, while eye-catching, is nothing out of the ordinary for this industry. Just look at Green Plains’ movement over the past nine months.

In March, like most stocks, the company’s valuation struck a new low of $1.12. Today, those same shares are trading for $12.90, a gain of 1,050%.

While adding another $11 to share price is unlikely, there is plenty of upside left in Green Plains and the ethanol industry. As the economy levels out and variables become certainties, producers will find their optimum scale and maximize their margins and profit potential.

While March would have been the best time to buy, today’s not too bad either.

Article first published on Today's Financial News

Is the ethanol industry ready to soar?

To make the highest gains, you must invest in the smallest stocks. The TFN team has located 3 bargain basement-priced penny shares with the potential to double in share price — or better!

by Laura Cadden, TodaysFinancialNews.com

Baltimore (TFN): Volatility is the word when dealing with penny stocks.

One article… heck, one RUMOR… and a tiny stock can rise over 40% in an afternoon.

Or drop by 50%.

The right due diligence is the best defense, but timing is even more crucial.

The team at TFN brought readers of their investment research service, Hot Stock Confidential, 70 double-digit gainers (and counting!) in 2009.

And now we’ve found four stocks with ridiculously low share prices that could bring you fast, solid gains in early 2010. Some of them could generate quick double-digit gains in an afternoon.

And at least one has the definite potential to generate a cool double — or more! — for investors buying at current price levels.

Here’s our most “conservative assessment”:

Penny stock winner #1: Emtec Inc. (OTC:ETEC)

This information technology company provides products, services and consulting to commercial and government clients.

Based in New Jersey, Emtec just signed two contracts with the Centers for Disease Control and Prevention worth an estimated total of $20 million. Not too shabby for a company with a market cap of just under $15 million!

The stock is showing an upward trend. We like the price to sales ratio of .07.

Pick up shares of Emtec at or under $1 for fast gains of 30% or better.

Penny stock winner #2: Capital Gold Corporation (OTC:CGLD)

Think gold has reached it peak? Most experts say it’s not even close!

This tiny miner is cashing in on its Mexican gold mines: Last quarter Capital Gold’s gross proceeds were up 27% from the same period in 2008.

Insiders moved in September, picking up shares on the cheap – and they’re not selling yet!

Corner your share of this gold market by buying Capital Gold under $1.05 for gains of at least 30% by mid-2010.

Penny stock winner #3: Heartland Inc. (OTC:HTLJ)

Located in Cumberland Gap, Tennessee, Heartland is a holding company with subsidiaries that include: Lee Oil Company (markets and distributes petroleum), Mound Technology Inc. (fabricates structural and miscellaneous steel including stairs and railings), and their newest venture, Heartland Steel Inc. (with its newly-completed manufacturing and warehouse facility in Ohio).

This company knows the steel market and this new capacity should prove a boon to its incredibly low share price.

Buy shares of Heartland Inc. (OTC:HTLJ) at or under $0.30 for 25% or better gains in the next six months.

For investors who can handle the risk associated with trading penny shares, we have a dozen companies on the verge of a breakout.

Some of them are biotech nail biters awaiting FDA approval for breakthrough new medicines. Others are beaten-down companies whose CEO’s been bouncing company checks… waiting for a double or even triple as the vultures circle to buy out the assets.

Learn the details by becoming a Member of TFN’s brand-spanking-new investment research service, Penny Stock Confidential. Read all about it and our latest micro-cap finds RIGHT HERE.Similar Posts:

• Profits on ZAP (ZAAP), Keryx Biopharmaceuticals (KERX), and Emtec (ETEC) – December 23, 2009
• Why biotechs like CombinatoRx (CRXX) make the best penny share speculations – November 20, 2009
• Today’s top 3 penny stocks – October 8, 2009
• TFN eNews 10/09/2009: Our Top 3 Penny Stocks – October 9, 2009
• TFN eNews 12/04/2009: A grim warning for the markets – December 4, 2009

Article first published on Today's Financial News

3 Penny Stocks With Winning Potential

The markets have a lot to think about these days. Fortunately, while investors sit and ponder, a handful of stocks are handing investors big gains.

By Andrew Snyder, TodaysFinancialNews.com

Baltimore – (TFN): It has been an interesting day in the world of equity trading. With fresh data that suggests American consumers remain concerned about the health of their wealth and surprising, but little noticed, word from Washington that the nation’s third-quarter GDP was revised downward, the S&P 500 spent most of the day in red.

Why the GDP revision to 2.85% from original estimates of 3.5% growth did not get more attention is beyond me. After all, the markets soared when the better-than-expected data originally surprised the Street.

Rational markets? Yeah, right.

Beyond the markets shortsighted tendency to discount negative news and over-inflate positive news, there are some stock stories to discuss today.

The first comes from the world of mergers and acquisitions. The past couple of weeks have been fairly busy for the sector, especially for the nation’s smallest companies.

Can you hear me now?

Today it is Iowa Telecom (NYSE:IWA) getting the buyout bid.

Windstream Corp. (NYSE:WIN) is paying $1.1 billion in a mix of cash and stock for the phone company and its 250,000 customers.

Shares of IWA are up by 25% on the day.

With the news of a major acquisition, shares of Windstream have held up fairly well. Shares are down by less than 1% as investors release the expense will lead to a stronger market share and reduced annual expenses.

Windstream executives tell us they believe the acquisition will lead to $35 million in annual synergies.

While investors digest the mid-Western acquisition, Brazilian Telecommunications (NYSE:TBH) shareholders are wondering what in the world just happened.

Shares of the South American phone company surged by a whopping 370% before market regulators hit the emergency brake and halted the stock’s trading.

The only news is there is pending news. Keep a close eye on this one.

Oh yeah, the green sector

Finally, after hibernating for the last three months, there is some action from the nation’s “green” energy industry.

Thanks to word that China’s State Grid Corp. is entering the power-storage market, industry speculation is alive and well. It’s good news for shareholders in companies like A123 Systems (NASDAQ:AONE) that were beginning to wonder where all the hype went. With word of industry movement, shares of the company are up by nearly 20% today.

Anytime we talk “green” energy, you’ve got to understand one thing. It’s all about hype. With little actual demand and an incredible array of variables affecting the industry, the future is far from certain.

Anytime we get a press release that even hints at some sort of market opportunity, share prices will surge. That’s what makes the industry so interesting to follow.

I have a feeling today’s action is the start of a new trend.Similar Posts:

• Hype thrills… and kills – October 2, 2009
• M&A Tuesday: A day late and lots of dollars short – November 3, 2009
• Oil investors: Keep your eye on that dollar – September 21, 2009
• Is there no end to China’s buying spree? – September 22, 2009
• IPO Strategy: Perfect timing for A123 – September 24, 2009

Article first published on Today's Financial News

Today’s winners point the way forward

We’ve hit are targeted profits on these two free TFN recommendations. Bank those gains!

By Laura Cadden, TodaysFinancialNews.com

Baltimore (TFN): Just last Thursday, I asked readers who got in at our buy price of $3.71 for Cytori Therapeutics (NASDAQ:CYTX) to lock in a minimum of 10% gains with a wealth protection stop-loss. After all, in these markets you just can’t be too sure.

But the news of the clinical trial for its RESTORE 2 (read more about that here) has given us the momentum we needed to bank a sweet 20% gain.

Kahn Resources Inc. (TSE:KRI) has also happily hit that 20% mark today.

We first told TFN readers about this highly-speculative play on Oct. 1 (read that article here).

The Canadian uranium miner has gone up over 20% in just 34 trading days rewarding those brave penny stock investors that got in on our recommendation with some quick gains.

Take ‘em home and enjoy!Similar Posts:

• TFN eNews 11/23/2009: Top Dividend Stocks – November 23, 2009
• TFN eNews 10/13/2009: This creates fantastic opportunities! – October 13, 2009
• Lock in gains for Cytori Therapeautics (CYTX) – November 19, 2009

Article first published on Today's Financial News

Take 20% gains on Kahn Resources (KRI) and Cytori Therapeutics (CYTX)

Biotech penny stocks like CombinatoRx, Inc. (NASDAQ:CRXX) perfect for speculation: They have a predictable set of triggers built in with the FDA approval process. And each of these triggers has a 50/50 chance of making you money!

by J. Christoph Amberger

Baltimore, MD TFN: CombinatoRx, Inc. (NASDAQ:CRXX) is an inoffensive biotech company that boasts a novel approach to designing drugs. They call it “developing synergistic combination pharmaceuticals”. To lay people, this means their drugs aim at treating multiple symptoms or diseases.

They’re also great for penny share speculation!

As a company, they’re good at what they’re doing: CRXX has a portfolio of four product candidates that have either completed Phase IIa clinical trials or are in preclinical development. These drugs target multiple diseases including immuno-inflammatory diseases, metabolic disease, chronic pain and topical dermatoses.

They’ve also made such a name for them that they’re about to merger with a very successful, privately held company called Neuromed. That’s where it gets interesting.

You see, the CRXX stock price fell off a cliff at $1.63 this past Monday, after the company received FDA feedback on a New Drug Application (NDA) for Exalgo Extended-Release Tablets.

(The drug treats moderate to severe pain in opioid-tolerant patients requiring continuous opioid analgesia for extended period of time.)

The FDA indicated that the NDA in its current form wouldn’t be sufficient under Section 505(b)(1) of the Food, Drug and Cosmetic Act of 1938.

Here’s some back story why this is important:

On June 30, CombinatoRx agreed to merge with privately-held Neuromed Pharmaceuticals Inc. in an all-stock transaction worth about $30 million. CRXX is expected to issue approximately 36 million new shares of its common stock to Neuromed stockholders, with each party owning approximately 50% of the voting power of the merged organization upon closing. Relative ownership of CombinatoRx will be adjusted based upon the outcome of the above-mentioned FDA review of the NDA for Exalgo:

If Exalgo approval is received by December 31, 2009, pre-merger CombinatoRx stockholders will own 30% of the combined company. If approval is received between January 1, 2010 and September 30, 2010, pre-merger CombinatoRx stockholders will own 40%. And if approval is received between October 1, 2010 and December 31, 2010, they’ll own 60% .

Exalgo looks like a potential cash cow: The rights to Exalgo were recently acquired by Mallinckrodt Inc., a subsidiary of Covidien plc, for $15 million in up-front payments, additional development funding of up to $16 million to cover internal and external costs associated with Exalgo, an approval milestone of $30 million, which could potentially increase up to $40 million, and tiered royalties on Exalgo net sales after approval.

What does that mean?

Neuromed’s under the gun: It filed the NDA for Exalgo with the FDA, which has a November 22, 2009 PDUFA review date. Neuromed is now working with Mallinckrodt to amending the existing NDA, or potentially resubmitting the NDA under Section 505(b)(2) of the FDCA, which uses different criteria to determine the basis for approval of a new drug candidate.

There’s revenues at stake… but more so, control of the combined company.

Shares of CRXX have risen since the merger deal was announced and were boosted further after Sanofi-Aventis SA (NYSE:SNY) acquired eye specialist Fovea Pharmaceuticals SA for €370 million ($541 million). CombinatoRx and Fovea are co-developing yet another drug candidate, slated for Phase 2b clinical trials later this year.

That indiactes that CRXX is a good company. And it’s not as if Exalgo didn’t meet primary endpoint in a trial. There were no efficacy issues. The NDA was filed under the wrong Section (505(b)(1)of the FDCA. This week’s action provided a window to buy CRXX at penny share prices.

That’s why we recommended our risk-happy VIP members at Penny Stock Confidential take a speculative position in CRXX yesterday. We recorded an entry price of 88 cents… that was available pretty much all day yesterday.

Yesterday’s new addition to our stable of Grand Slam hopefuls soared today on news that the FDA extended its New Drug Application NDA review for Exalgo extended-release tablets. The extension has been set for February 22, 2010.

In view of the Exalgo-triggered boost in the share price, I consider this neutral news. The company has a lot of revenues riding on this, so I don’t believe they’ll be dragging their feet until February. From a longer-term perspective, this is good news for CRXX share holders: By missing the first deadline, existing shareholders will end up owning a larger percentage of the combined company once the merger with Neuromed is final. Hang in there and don’t sweat the fluctuations.

PSC members were instructed to keep their entry price below 95 cents this morning. Since then, the stock has crossed $1 multiple times on substantial volume and is currently registering gains of 16%-plus in our PSC open positions portfolio.

Had this been a TFN or even Hot Stock Confidential recommendation, I’d have been happy taking this kind of gain off the table in a day. But with penny stocks, you’re in for larger gains… and willing to bear higher risk in exchange.

I expect this stock to regain the price level it had a week ago as the FDA process progresses. After all, that’s what makes biotech penny stocks perfect for speculation: They have a predictable set of triggers built in with the FDA approval process. And each of these triggers has a 50/50 chance of making you money!

I like those odds!

Since we were able to squeeze in at what could be fire-sale lows, that could mean a cool double for PSC members.

This is exactly the situation we’re seeking out at Penny Stock Confidential. In just 10 days, we’ve taken gains of 43% and 68% on two of our first dozen positions. We saw one of our stocks double in a day just yesterday, and two more are up by double-digit percentage gains.

If you have the stomach for more involved trading along these lines… why dont you check out what PSC is all about?Similar Posts:

• Join the Party: PSC cashes out of Xenonics (XNN) for 28% gains – December 4, 2009
• 3 Penny Stocks With Winning Potential – November 25, 2009
• Take 65%-plus gains on Origin Agritech (SEED) – November 23, 2009
• Sinobiopharma, Inc. (SNBP) soars on — what exactly? – January 21, 2010
• Today’s top 3 penny stocks – October 8, 2009

Article first published on Today's Financial News

Why biotechs like CombinatoRx (CRXX) make the best penny share speculations

Too many investors think the worst is already priced in. The figures from Dick’s Sporting Goods (NYSE:DKS) prove we are in for a wild ride.

By Andrew Snyder, TodaysFinancialNews.com

Baltimore – (TFN): What’s the first thing you cut out when the economy gets rough? Generic answer: Anything you don’t need.

That is not good news for the nation’s sporting goods retailers. From outdoor superstores like Cabelas (NYSE:CAB) and Gander Mountain (NASDAQ:GMTN) to Dick’s Sporting Goods (NYSE:DKS), anybody that sells a product considered discretionary, sales growth is hard to find.

The news from Dick’s this morning proves the point.

Shares of the company are down by nearly 10% today after the company released its third-quarter financials. On a year-over-year basis, the figures look surprisingly good. But this time last year, the retailer took massive restructuring charges.

With a bottom line of just $6.2 million, any progress would create a large percentage gain. This year’s third quarter, in fact, produced bottom line growth of over 200%.

But just $18.9 million in quarterly profits is no path to success for a $2.5 billion firm like Dick’s.

Even worse, the company told analysts to ratchet down their Q4 expectations. Dick’s tells us to expect earnings per share in the range of $0.41 to $0.46. Until this morning, the Street was expecting a figure of $0.57 per share.

Just the beginning

Expect lots of similar news reports out of the retail industry over the next two months.

With Black Friday just a week away, we are into the critical sales period for the year. Even a tiny downturn in consumer sentiment over the next couple of weeks could equate to massive disappointments come the end of the year.

If you are one of our many TFN Strategic Trader members, you know I warned of this situation back in August.

On the 15th of that month, here’s what I said about Cabelas:

Just like so many homebuilders errantly believed their business would begin to build last spring, Cabela’s investors are expecting a strong end-of-the-year charge from their company.

It is not going to happen. The industry is fundamentally weaker now than it was six months ago.

Cabela’s target demographic was one of the hardest hit during the economic downturn. With a slow summer in the history books, unemployment checks are starting to run out and many Americans are bracing for a lean winter ahead.

Fewer folks can justify shelling out a few hundred bucks for the latest camo pattern when last year’s will work just fine (especially if all they are hiding from is the repo man).

Over the next few months, Cabela’s investors will sober up, shares will drop and the folks on the short end of the trade will prosper.

I then instructed investors to buy the company’s December 15 puts.

Nailed it! Just one month later, we sold them for gains of 80%. Over the last three months, shares of Cabela’s have fallen from over $16 to just $12.75 today.

I am confident Cabela’s is nearly done its plunge, company’s like Dicks and Gander Mountain are in for rough seas.

Fortunately Gander Mountain is going private, so investors won’t feel the pinch. But it’s too late for Dick’s investors. They are already feeling the pain.

As Christmas approaches, beware the retail sector.Similar Posts:

• Where would you rather have your money? – November 20, 2009
• OshKosh vs Cat: Not much of a fight – October 20, 2009
• TFN eNews 09/28/2009: The one word Sirius investors fear the most – September 28, 2009
• What to do about SpongeTech (SPNG)? – October 20, 2009
• The end of an upside-down week on Wall Street – December 11, 2009

Article first published on Today's Financial News

Beware the retail sector, it’s going to fall

The markets are up once again today as the markets look at what the future holds. We will recover, but it will not be as quickly as most predict. We need to worry about today, before we plan for tomorrow.

By Andrew Snyder, TodaysFinancialNews.com

Baltimore – (TFN): Normally, I warn investors that the market is too short-sighted, but these days I am worried it is expecting too much from the future. The Street needs to slow down and worry about right now.

While so many investors are laying bets on what the future will look like, some ominous signs are popping up across the data spectrum.

On one end, we have unemployment into double-digit territory and showing no signs of letting up. On the other end, we have a national currency getting pulled in every direction. And somewhere near the middle is a horrific housing market.

Let’s start with the housing market. A good look at where things stand can be obtained by peering into Lowe’s (NYSE:LOW) third-quarter figures.

The most important figure is the bottom line. The home-improvement giant made just $344 million in profits over the past three months, compared to a gain of $488 a year ago.

On the top line, Lowe’s reported a 3% decline in revenues, selling $11.38 billion in goods and services.

Dwindling numbers are something the company had better get used to.

Sure, it tells analysts it sees signs that the housing market is finally beginning to level off, but is leveling off good enough?

My answer is no.

After the last decade, the industry got used to a low-competition environment. With McMansions popping up on just about every corner, consumers had very little control over prices. But now that the nation is holding off on big purchases and searching for the ultimate best deal, Lowe’s and its competition have a fierce battle on their hands.

While this may be a microscopic look at one segment of a giant industry, it is indicative of the power a slumping home market will have on the economy. Now that the home-equity ATM has been unplugged, massive amounts of spending have vanished.

It won’t be coming back anytime soon. And that is big trouble for a so-called “V-shaped” recovery.

A sick dollar

The health of the dollar is also a major focal point and will certainly be a hurdle for any sustained recovery.

Gold prices reached into record territory once again today as the dollar weakened thanks to rhetoric out of China.

But I warn investors to watch the ratcheting effect taking place. Each time the dollar rises, gold follows. But each time the greenback strengthens, the price of an ounce of gold does not follow in kind.

Prices are unduly ratcheting higher and higher. Eventually the mechanical advantage will be lost and gold will come down significantly.

As of now, I believe it will happen sooner than later. With Obama finally focusing (at least rhetorically) on the dollar and its relative strength, the upside is significantly limited. The powers that control the greenback – the Fed, Treasury and the White House – won’t let it get much weaker than it is now, not with so many eyes watching it.

That mean the bears are likely to take control of the gold market in the not-so-distant future. While they are out of hibernation, expect them to toy with the equities market as well.

The near-term data is simply too negative to confirm the positive long-term outlook. This recovery will be years, not months.

Article first published on Today's Financial News

Don’t look too far forward