While the trading week was shortened due to the President’s Day Holiday, it certainly did not lack for volatility, although when the dust settled the major indices turned in a mixed performance. The Dow Jones industrial average rose by 33 points, to cut its year to date loss to 6.7%. The Nasdaq continued to struggle as it recorded an 18 point loss, bringing its year to date loss to 13.2%. The Standard & Poor’s 500 Index gained 3 points to reduce its year to date loss to 7.8%. The Russell 2000 lost 6 points, boosting its year to date loss to 9.2%.
Throughout the week an assortment of economic concerns kept many buyers away from the action. The market appeared to be unsettled by inflation concerns at certain times, by recession fears at others, and by the specter of stagflation still at others. Rising commodity prices, a jump in consumer inflation, cautious earnings guidance from retailers Wal-Mart and J.C. Penney, a weak regional manufacturing report, and new economic projections for 2008 from the Federal Reserve, which included a downward revision to the GDP growth forecast and upward revisions to the inflation and unemployment rate forecasts, were overriding influences during the shortened week of trading. However, the news wasn’t all negative. Dow component Hewlett-Packard had a strong quarterly report including better than expected fiscal year guidance, weekly initial claims fell 9K to 349K to remain well below typical recession-like levels, and Blackberry maker Research In Motion announced that its net subscriber account additions will be 15% to 20% higher for its fiscal fourth quarter than previously projected.
What should investors look for in the upcoming week? While earnings announcements have slowed in the past few weeks, investors can still expect a number of important announcements from key companies in the upcoming week. Henry Schein (NASDAQ: HSIC) and Lowe’s (NYSE: LOW) will make announcements before the bell on Monday. Nordstrom (NYSE: JWN) will follow with announcements after close. Tuesday AutoZone (NYSE: AZO), Blockbuster (NYSE: BBI), CBS Corp (NYSE: CBS), DISH Network (NASDAQ: DISH), HJ Heinz (NYSE: HNZ), Home Depot (NYSE: HD), KBR Inc. (NYSE: KBR), Macy’s (NYSE: M), Office Depot (NYSE: ODP), Performance Food (NASDAQ: PFGC), RadioShack (NYSE: RSH), Reliant Energy (NYSE: RRI), Sempra Energy (NYSE: SRE), Sonic Automotive (NYSE: SAH), and Target (NYSE: TGT) will all make announcements before the bell. On Wednesday before the bell Charter Comm (NASDAQ: CHTR), Donnelley & Sons (NYSE: RRD), Edison (NYSE: EIX), Magna (NYSE: MGA), and Nortel (NYSE: NT) will make announcements. Limited (NYSE: LTD), Dillard’s (NYSE: DDS) and McDermott (NYSE: MDR) will follow with announcements after the close. Thursday will be another busy day with announcements from AbitibiBowater (NYSE: ABH), Cablevision (NYSE: CVC), CenterPoint (NYSE: CNP), First American (NYSE: FAF), Fluor (NYSE: FLR), Sears Hldg (NASDAQ: SHLD), Smithfield Foods (NYSE: SFD), Sprint Nextel (NYSE: S), Talisman Energy (NYSE: TLM), Telefonica S.A. (NYSE: TEF), American Intl (NYSE: AIG), Comp Vale Do Rio (NYSE: RIO), Dell (NASDAQ: DELL), Gap Inc (NYSE: GPS), Kohl’s (NYSE: KSS), Universal Health (NYSE: UHS), Viacom (NYSE: VIA), and World Fuel Svcs (NYSE: INT). Crosstex Energy (NASDAQ: XTXI), Interpublic (NYSE: IPG), Pepco Hldgs (NYSE: POM) will close out the week with announcements on Friday.
Next week’s economic news will begin with the January Existing Home Sales announcement on Monday. On Tuesday, the January Producer Price Index will be announced before the market opens, with the Consumer Confidence Report coming mid- morning. January Durable Orders will be announced Wednesday morning, followed by January New Home Sales and the weekly Crude Inventories later on in the morning. Fourth Quarter GDP and Chain Deflator, and weekly initial claims will be announced Thursday morning. Friday will be a busy day for economic announcements with January Personal Income, January Personal Spending, and January Core PCE Inflation being announced early in the morning. February Chicago PMI and February Michigan Sentiment will be announced later in the morning to close out the week.
The conference schedule will once again be on the lighter side for next week. It will begin Monday with a three day BMO Capital Markets Global Metals & Mining Conference in Hollywood, California and the four day Credit Suisse Global Services Conference in Phoenix Arizona. The three day Goldman Sachs 2008 Technology Investment Symposium Conference in Las Vegas, Nevada and the two day Merrill Lynch Communications Services Forum in New York, will begin on Tuesday. The three day Wachovia Home Building and Building Products Conference in Las Vegas, Nevada will begin Wednesday, followed by the Credit Suisse Transportation and Logistics Conference and Aerospace and Defense Conference on Thursday, in Boston and San Francisco respectively to conclude the week.
Multiband Corporation (NASDAQ: MBND), the nation’s largest DIRECTV Master System Operator for Multiple Dwelling Units, announced that it has completed an acquisition of the assets of Minneapolis-based privately-held U.S. Install, LLC, a national home theater and video surveillance installation company. Multiband has created a new division, called U.S. Install and will integrate the purchased assets into existing operations. U.S. Install is contracted nationally with a network of installation providers who collectively have over 11,000 employee installers nationwide. Their client list includes a variety of retailers and consumer electronics product manufacturers, for which U.S. Install provides end user commercial and residential installations. Multiband will utilize existing sales, marketing, and operational resources to service current U.S. Install customers, and gain new customers by increasing U.S. Install’s operational capacity. The acquisition of U.S. Install marks the entrance into residential and commercial consumer electronics installations for Multiband. Multiband recently completed the acquisition of a 51% interest in Michigan Microtech, Inc., formerly a wholly owned DirecTECH Holding Company, Inc. for approximately $6.1 million, through the issuance of approximately 1.5 million shares of Multiband’s restricted common stock and a long term promissory note for approximately $2.25 million. Multiband will consolidate Michigan’s operating results beginning in March 2008. Michigan had 2007 unaudited revenue for the first eleven months of its fiscal year of $23.5 million and was profitable.The stock fell $0.52 for the week, to close at $2.22.
Advanced Cell Technology, Inc. (OTCBB: ACTC), a biotechnology company applying cellular technology in the emerging field of regenerative medicine, reported for the first time a robust and highly efficient process for the generation of high-purity hepatocytes. The research, described in the journal STEM CELLS, signifies a significant step towards the efficient generation of hepatocytes for use in regenerative medicine and drug discovery. Moreover, the research represents another one of Advanced Cell Technology’s efforts aimed at the large-scale differentiation of human embryonic stem cells into critical replacement cell types. In addition to demonstrating the efficient generation of hepatocytes, the company has made significant progress in the generation of retinal pigmented epithelial cells to treat retinal degenerative diseases and the generation of hemangioblasts to treat vascular disease as well as to create a large-scale and donorless source of red blood cells and platelets. These cells have the potential to benefit many people suffering from serious and potentially life-threatening diseases with few if any alternatives. The company is committed to developing new methods to help translate its stem cell technology into the clinic and is seeking partners for some of its newest scientific advances. The stock rose 2 cents for the week, to close at $0.22.
Thomson Scientific, part of The Thomson Corporation and a leading provider of information solutions to the worldwide research and business communities, and Collexis Holdings Inc. (OTCBB: CLXS), a developer of high definition search and knowledge discovery software, announced plans to join together Collexis’ Knowledge Dashboard with Thomson Scientific’s Web of Science to create a custom data mining solution for the research community. Called the Thomson Collexis Dashboard, it will provide enhanced knowledge discovery for the academic and government R&D communities. By merging Thomson Scientific’s Web of Science data with the Collexis Knowledge Dashboard, users will have the ability to identify and search for documents, experts and trends, and make new discoveries more quickly, accurately and deeply than via conventional search engines. The stock rose a penny for the week, to close at $0.41.
Cordia Corporation (OTCBB: CORG), a global communications service provider of traditional CLEC and Voice over Internet Protocol technologies, announced that it is experiencing strong revenue growth throughout Asia and Latin America. The company’s agent program throughout Asia and its internal telemarketing efforts in Latin America have resulted in substantial sales showing that it can offer a value packaged VoIP service and acquire customers at a reasonable cost. During 2008, the company will be further expanding its efforts in Latin America through the use of third party telemarketing companies in order to expedite its growth in this region. Cordia expects to enter into agreements over the course of 2008 that will allow it to expand its product and services to include international landlines, mobile phones and broadband services. The stock fell $0.01, to finish the week at $0.52.
ProLink Solutions, a wholly-owned subsidiary of ProLink Holdings Corp. (OTCBB: PLKH) and the world’s leading provider of Global Positioning Satellite golf course management systems and digital out-of-home on-course advertising, announced that Woodlake Golf Club in San Antonio, Texas, now features the ProLink Solutions GPS system used at many of the world’s most famous golf courses and plans to participate in ProLink’s exclusive national advertising opportunity. Courses with ProLink GPS benefit on many levels, from enhanced guest satisfaction to significant revenue increases. And every high- profile course added to ProLink’s roster, such as Woodlake Golf Club, give the company’s advertising partners broader reach and greater access to well-heeled golfers. The stock remained unchanged at $0.51 for the week.
Volume Alert: Shares of Seaway Valley Capital Corporation (OTCBB: SWVC), a company that makes equity, equity-related, and debt investments in companies that require expansion capital, surged 18% on Friday on more than seven times average volume after it announced that its wholly owned subsidiary, Patrick Hackett Hardware Company, closed on its previously announced five million dollar inventory-based line of credit from Wells Fargo Bank, NA. With this line of credit arrangement Hackett’s will have sufficient resources to initiate the repayment of certain debts, transition the existing WiseBuys stores to Hackett’s stores, and begin the exploration of possible new locations. After the store conversions, Hacketts will operate nine locations including Canton, Gouverneur, Hamilton, Massena, Ogdensburg, Potsdam, Pulaski, Tupper Lake, and Watertown, all in New York. Hackett’s is also seeking additional locations in New York, Vermont, Massachusetts, Connecticut, and Pennsylvania. Shares remained static at $0.01 for the week.
On the Wires: Pluristem Therapeutics Inc. (NASDAQ: PSTI), a leading bio-therapeutics company dedicated to the commercialization of non-personalized cell therapy products for a variety of malignant, ischemic and autoimmune disorders, announced that it presented its clinical trial plans at the Roth Capital Partners 20th Annual OC Growth Stock Conference in Dana Point, California, USA. VeriChip Corporation (NASDAQ: CHIP), a provider of radio frequency identification systems for healthcare and patient-related needs, held exhibits at the American Academy of Forensic Sciences 60th Anniversary Scientific Meeting in Washington, D.C.
SPECIAL SITUATIONS:
Amarillo Biosciences, Inc. (OTCBB: AMAR) $0.31
With the Centers for Disease Control saying yesterday that the flu was widespread in 49 states, up from 44 the previous week, we thought it would be the ideal time to initiate coverage of Amarillo Biosciences, a biotechnology company founded in 1984 which is focused on using its patented delivery system to develop solutions for the chronic cough, influenza, HIV and oral warts. The company has invested nearly $38 million to establish oral interferon as a therapeutic agent. Interferons, produced by the body during viral infections, have been studied for about 30 years. In 1988 the U. S. Food and Drug administration (FDA) approved interferon as a treatment for Kaposi’s sarcoma; it had previously been used to treat hairy cell leukemia and genital warts.
The drug is normally given by injection, as it is believed that it would be digested in the stomach and destroyed if taken orally. However, oral delivery of the drug is considered safer, as the side effects are much milder than when interferon is delivered by injection. Delivering interferon orally is also considered to be more cost effective, as it can be delivered in a natural, rather than recombinant form.
Apparently, others are intrigued by Amarillo’s ability to deliver interferon orally. The company has partnered with Japan’s Hayashibara Biochemical Laboratories, which has provided $18 million in funding. Hayashibara is a supplier of human interferon alpha and an associated delivery system. The company also has a license agreement with Vita Genomics’ subsidiary CytoPharm in Taiwan/China. CytoPharm will conduct trials at its expense in the area of Hepatitis C. The parties had an IND declared effective by the FDA earlier this month.
So, with so many seeking a way to prevent influenza, how effective is oral interferon? In studies at the University of Western Australia, oral interferon protected mice against a fatal influenza infection. The Trudeau Institute in New York conducted studies that indicated mice given low-dose oral interferon lost less weight from influenza infection than mice given placebo. The Friedrich-Loeffler-Institute in Germany showed that low-dose oral interferon protected mice against a fatal influenza infection. As a result of this promising data, AMAR filed an IND in February to test oral interferon versus placebo in patients older than 12 years of age who were positive for influenza A or B virus. The Phase 2 study with a target enrollment of up to 200 children is scheduled to start in March 2008, with patient fever and flu symptoms to be assessed over a 72-hour period. If AMAR is able to generate a reduction in duration and/or severity of fever and flu symptoms in the interferon treatment group, it could serve as a catalyst for the stock.
During the first half of 2008, the company also expects to start enrollment in Phase 2 study in the area of chronic cough, and to complete enrollment of Behcet’s disease patients in Turkey. By 2030, the World Health Organization predicts that the chronic cough will become the fourth most common cause of death, behind only heart disease, stroke and AIDS. Behcet’s is an autoimmune disease characterized by ulceration in the mouth and genital tract caused by an inflammation of blood vessels that can also affect the eyes, GI tract and nervous system. Nobel Ilac, a leading Turkish pharma company, is co-sponsoring the study and funding its cost.
Despite multiple studies in large-market indications, the company has a market valuation of less than $10 million, as shares currently trade just above a 52-week low and well below last February’s level, when they reached a 52-week high of $1.08. With concerns about influenza reaching epidemic levels, Amarillo’s promising platform could thrust this small company into the spotlight.
