Companies featured in the current edition of the newsletter: ACTC, CBAI, CGXP, CLXS, GNBT, GCEH, GERS, HYTM, IASCA, ILNS, MBND, PLKH, PSTI, SMGY, TKO, XCR
The major indices slipped appreciably this week in the wake of some familiar concerns. In particular, there were fears surrounding the specter of further write-downs in the financial sector, rising inflation and deteriorating profit prospects. After recording strong gains in the previous week, the Dow Jones Industrial Average dropped 284 points, bringing its year to date loss to 7.1%. The technology heavy Nasdaq continued its poor performance with a loss of 81 points and a year to date loss of 13.7%. After gaining over 4% the previous week, the S&P 500 lost 38 points, bringing its year to date loss to 9.2%. The Russell 2000 completed the weekly trend with a loss of 26 points and a year to date loss of 10.2%.
There was a litany of bad news on the earnings front for the week, none worse for the broader market than the first quarter report and outlook from Dow component General Electric (GE). GE reported a 12% decline in earnings, missing consensus estimates by 5 cents per share for the first time in memory. The disappointment from GE unnerved the market on Friday and prompted a deep sell-off that accounted for the bulk of the week’s losses. Shares of GE experienced the largest single-day drop since 1987. Other concerns dampening investor sentiment included oil prices rising to a new record high of $112.21 on Wednesday following a weekly inventory report and a report from major investment banks Goldman Sachs, Lehman Bros. and Morgan Stanley that each saw an increase in their Level 3 assets which represent the most difficult assets to value.
There was nothing deflating for oil traders this week. Crude prices rose 3.8% for the week to end at $110.31. The move kept inflation concerns alive, as did the report that import prices in March rose 14.8% year-over-year. In other economic news, weekly initial claims fell 53K to 357K, making the prior week’s jump to 410K look aberrant due to seasonal factors related to Easter. The trade deficit for February, meanwhile, widened surprisingly to $62.3 billion from $59.0 billion in January. The Michigan Sentiment Index was the lowest in 17 years, suggesting pessimism from consumers. In other news, Wal-Mart raised its first quarter EPS guidance, making it one of the few bright spots for the week.
What should investors expect for this week? This week will feature a number of high profile earning announcements. BlackRock (NYSE: BLK), Charles Schwab (NASDAQ: SCHW), Eaton (NYSE: ETN), and WW Grainger (NYSE: GWW) will begin the week with announcement on Monday before the bell. Coming Tuesday before the bell will be announcements from Johnson & Johnson (NYSE: JNJ), State Street (NYSE: STT), and US Bancorp (NYSE: USB). Following later in the day after the market closes will be announcements from CSX Corp (NYSE: CSX), Intel (NASDAQ: INTC), Seagate Tech (NYSE: STX), and Washington Mutual (NYSE: WM). Wednesday will be another important day for investors as the focus on earning announcements from Abbott Labs (NYSE: ABT), AMR Corp (NYSE: AMR), Coca-Cola (NYSE: KO), Illinois Tool (NYSE: ITW), Johnson Controls (NYSE: JCI), JP Morgan Chase (NYSE: JPM), Wells Fargo (NYSE: WFC), eBay (NASDAQ: EBAY), IBM (NYSE: IBM), and Kinder Morgan Partners (NYSE: KMP). Thursday will be a very active day for earnings with Bank of NY (NYSE: BK), Baxter (NYSE: BAX), Danaher (NYSE: DHR), Harley-Davidson (NYSE: HOG), Marriot (NYSE: MAR), Merrill Lynch (NYSE: MER), Nokia (NYSE: NOK), Nucor (NYSE: NUE), Pfizer (NYSE: PFE), PPG Industries (NYSE: PPG), Schering-Plough (NYSE: SGP), Southwest Air (NYSE: LUV), Textron (NYSE: TXT), and United Tech (NYSE: UTX) making announcements before the bell. Coming later on Thursday after the close will be announcements from Capital One (NYSE: COF), CEMEX S.A. (NYSE: CX), and Google (NASDAQ: GOOG). Friday will feature announcements from Caterpillar (NYSE: CAT), Citigroup (NYSE: C), Honeywell (NYSE: HON), Manpower (NYSE: MAN), Schlumberger (NYSE: SLB), Wachovia (NYSE: WB), and Xerox (NYSE: XRX).
Economic reports for the week start off with the release of March Retail Sales and February Business Inventories on Monday. Tuesday morning the March PPI/Core PPI, April New York Empire State Index, and February Net Foreign Purchases are released. Wednesday morning the March CPI figures are released, along with March Housing Starts, March Building Permits and March Industrial Production and Capacity Utilization data. Weekly Crude Inventories are released Wednesday mid-morning. Thursday before the bell, Weekly Jobless claims are announced with March Leading Indicators being reported at 10:00 a.m. The April Philadelphia Fed Index is released at 10:00 a.m. on Thursday.
The conference schedule for the week will be on the light side beginning Tuesday with the Bear Stearns 8th Annual Broadcast Conference in Las Vegas, followed by RBC Capital Markets’ Platinum Group Metals Conference in New York City on Wednesday. The two day Morgan Stanley Commodities and Shipping Conference New York City will conclude the week on Thursday.
Do insider purchases foreshadow positive developments for a stock? If so, then it could suggest that healthcare services company Hythiam, Inc. (NASDAQ: HYTM) could finally be close to landing a deal with a managed care company. Last week, the company’s CEO said he purchased 100,000 shares of stock in the open market. It was the first time that the executive had purchased shares in Hythiam. In addition, a company director reported purchases of 50,000 shares. The same director purchased an additional 69,000 shares the previous week. Shares ended the week at $1.79, down one cent.
What happens when you are the last one standing? Shares of drug delivery company Generex Biotechnology Corporation (NASDAQ: GNBT), jumped in brisk trading last week after lung cancer concerns seemed to doom hopes for the delivery of inhaled insulin by competitors. By contrast, GNBT delivers insulin through the inner lining of the mouth. There have been no safety concerns announced to date for GNBT’s oral insulin product, which has already been approved for sale in India and Ecuador. The company also announced that it has initiated a Phase III protocol in North America for its oral insulin spray product, Generex Oral-lyn, with the commencement of patient screening. The first screening took place in late March in Texas. Other clinical sites participating in the study located in the United States are in Texas, Maryland, Minnesota and California, and in Canada in the province of Alberta. Shares rose by $0.14, to finish the week at $1.15.
Pluristem Therapeutics Inc. (NASDAQ: PSTI), a bio-therapeutics company dedicated to the commercialization of non-personalized cell therapy products for a variety of degenerative, ischemic and autoimmune indications, announced that the results from Fraunhofer Institute’ additional pre-clinical study utilizing the company’ proprietary PLacental eXpanded cells in treating ischemic stroke showed statistical significance utilizing functional as well as anatomical endpoints. PLX cells are mesenchymal stromal cells obtained from the placenta and expanded using Pluristem’ proprietary 3D PluriX technology. The company believes that its PLX product may successfully treat millions of ischemic stroke patients and lead to a multi-billion dollar market. This independent study, together with the previously announced favorable pre-clinical results of PLX cells to treat limb ischemia and blood cancer, give the company a robust pipe line for developing new therapeutic products. The stock rose by $1.04 for the week, to close at $3.55.
Telkonet, Inc. (AMEX:TKO), a provider of innovative, centrally managed solutions for integrated energy management, networking, building automation and proactive support services, reported on its first installations in Argentina for the Telkonet iWire System, enabling the disruption-free provision of high-speed Internet access at Rochester Hotels’properties in Buenos Aires. The company’ solution met Rochester Hotels’requirements for a fast installation turnaround, with zero impact on the properties’technical infrastructure after a major refurbishment program, and addressed the growing demand for broadband from the hotels’ national and international clientele. Shares fell by $0.12 for the week, to close at $0.72.
Xcorporeal, Inc. (AMEX: XCR), a medical device company developing an innovative extra-corporeal platform technology to be used in devices to replace the function of various human organs, announced operational highlights for calendar year 2007. Xcorporeal’s common stock began publicly trading on October 15, 2007. During 2007, the company developed a functional prototype for the Portable Hospital Hemodialysis Device. The market for hospital hemodialysis is estimated to be approximately $1.1 billion. Shares fell by $1.29, to finish the week at $3.24.
Ceragenix Pharmaceuticals, Inc. (OTCBB: CGXP), a biopharmaceutical and medical device company focused on infectious disease and dermatology, announced that it had received a $1.5 million milestone payment pursuant to its exclusive distribution and supply agreement with Dr. Reddy’s Laboratories, Inc. for the commercialization of EpiCeram in the United States. The company may earn certain non-sales based milestone payments of up to $3.5 million, upon meeting additional milestones, including the product’s launch. The payment is refundable in the event that the company cannot provide launch quantities of properly validated and shelf stable product. The company believes that it will be able to meet these requirements. The stock finished the week unchanged at $1.00.
Advanced Cell Technology, Inc. (OTCBB: ACTC), a biotechnology company that engages in the development and commercialization of human stem cell technology in the field of regenerative medicine, was invited last week by the U.S. Food and Drug Administration’s Center for Biologics Evaluation and Research Advisory Committee on Cellular, Tissue and Gene Therapies to present on the subject of embryonic stem cells. The presentation “Safety Considerations for the Clinical Application of Human Embryonic Stem Cells” was expected to help the panel evaluate pre-clinical safety considerations regarding cellular therapies derived from human embryonic stem cells. The company also said that it received additional investments prior to the release of the closing escrow, raising total proceeds of approximately $2.5 million. The stock finished the week unchanged at $0.11.
Collexis Holdings, Inc. (OTCBB: CLXS), a developer of high definition search and knowledge discovery software, said last week that Kaohsiung Medical University had selected the company to develop an Advanced Expert Profiling System that will allow its students, faculty and researchers to connect via a Web interface and help maximize productivity and networking abilities for its combined student, faculty and staff population of more than 15,000. Working together with KMU should help expand the company’s marketing opportunities throughout the Asian market and open doors for future collaboration within specific fields of biomedical research. The stock rose a penny for the week, to close at $0.38.
GreenShift Corporation (OTCBB: GERS), a company that through its subsidiaries provides applied engineering and technology transfer services based on clean technologies and processes, released its annual report for the year ended December 31, 2007. The company’s total revenues for 2007 were $30 million as compared to $18.4 million in 2006. The company expects that its currently committed sources of revenue will be sufficient to meet the company’s debt service, operational and other regular cash needs during 2008. The stock rose by a penny for the week, to close at $0.13.
IAS Energy, Inc. (OTCBB: IASCA), which has acquired a promising Chinese Internet company, said it had entered into an agreement with Teryl Resources Corp., whereby IAS agreed to sell all its remaining 40% working interest in three gas wells located in Knox and Laurel County in consideration of an initial payment from Teryl of $25,000. The balance of funds owed by Teryl to IAS for the purchase of the gas wells will be determined by an independent report, prepared by a qualified petroleum geologist. All revenue received from the gas wells will be received by Teryl upon execution of the agreement. The agreement and the purchase of the gas wells will be subject to the approval of the TSX Venture Exchange and the British Columbia Securities Commission. The stock dropped a penny for the week, to close at $0.23.
Intellect Neurosciences, Inc. (OTCBB: ILNS), a biopharmaceutical company engaged in the discovery and development of disease-modifying therapeutic agents for the treatment and prevention of Alzheimer’s disease and other disorders, announced that it has obtained a Notice of Allowance and completed the grant requirements to obtain a European patent relating to the company’s ANTISENILIN antibodies and products being developed by the company for the treatment of Alzheimer’s disease. Grant of the European patent is expected in several weeks. ANTISENILIN is at the forefront of the battle against Alzheimer’s disease and has been applied to promising drug candidates in clinical development by major pharmaceutical companies. Shares rose by $0.27, to finish the week at $0.58.
Volume Alert: National Storm Management, Inc. (OTC: NSMG), a company that operates as a storm restoration management company specializing in residential home repair from the effects of wind and hail damage to residents in Florida, Illinois, Indiana, Minnesota, Louisiana, Georgia, Ohio, and Kentucky, traded nearly four times its average volume during the week, possibly due to investors anticipating the approach of the hurricane season which officially begins on June 1st and could result in increased business for the company. The company is also anticipating an increase in new opportunities with opening of a new office in Alpharetta, Georgia to capitalize on recent storm activity in the area. Shares closed at $0.06 for the week, up one cent.
Earnings Preview: ProLink Holdings Corp. (OTCBB: PLKH), the world’s leading provider of Global Positioning Satellite golf course management systems and digital out-of-home on-course advertising, is scheduled to report fourth quarter and year-end results for the period ended December 31, 2008 on Tuesday, April 15th after the market closes. The company reported total revenue of approximately $6.6 million for the three months ended September 30, 2007, compared to $5.9 million for the same time period in 2006, an increase of approximately $0.8 million, or 13.3%. A significant increase in new system sales and upgrades, advertising revenues and greater adoption of the ProLink System contributed to the higher revenue and improved profitability. The company has continued to announce new relationships with golf courses in the U.S., suggesting that domestic revenue could be strong. However, investors will be equally focused on what the company says about international prospects, particularly since it said recently that it had terminated its relationship with Elumina, its largest distributor. PLKH also announced that the University of Notre Dame’s Warren Course and on-campus golf course now feature the ProLink Solutions GPS system used at many of the world’s most famous golf courses and plan to advertise with PLKH nationally. The stock rose by $0.13 for the week, to close at $0.56.
Smart Energy Solutions, Inc. (OTCBB: SMGY), the developer and manufacturer of the innovative Battery Brain product line of vehicle and marine devices, announced an agreement with Kerr Industries, a leading North American provider of automotive products and services to police, emergency and commercial customers. Kerr Industries is General Motors’ second stage manufacturer and Tier 1 supplier for GM police and emergency vehicles. Currently processing an average of approximately 20,000 vehicles a year, Kerr Industries provides solid growth potential for Battery Brain. It will also provide Battery Brain with significant visibility and sales opportunities as an optimal solution for battery charge protection, battery failure and vehicle theft. The product was selected by Kerr Industries as the battery charge protection option of choice following successful evaluation and testing on different models of vehicles in Oshawa, Canada and in Texas. The stock rose by a penny, to finish the week at $0.22.
Cord Blood America, Inc. (OTCBB: CBAI), the umbilical cord blood stem cell preservation company focused on bringing the life saving potential of stem cells to families nationwide and internationally, announced that Pennsylvania has joined New York and California in passing a law designed to educate pregnant women about the potential benefits of umbilical cord blood banking. Cord Blood America, in its acquisition of CorCell, has strong relationships in both Philadelphia and Pittsburgh with health insurers and the medical community. CorCell’s sales and marketing are based in Philadelphia. Shares remained at around $0.01 for the week.
Insider Activity: A director of Xcorporeal, Inc., (AMEX: XCR) purchased 10,300 shares and a director of Multiband Corporation (NASDAQ: MBND), the nation’s largest DIRECTV Master System Operator for Multiple Dwelling Units, bought approximately 10,000 shares.
On the Wires: Global Clean Energy Holdings, Inc. (OTCBB: GCEH) entered into an employment agreement with Bruce K. Nelson under which Mr. Nelson agreed to serve as Executive Vice-President and Chief Financial Officer of the company.