Companies featured in this edition of the newsletter: DKAM, ENZ, FMTI, HYTM, IMUC, IWEB, NXOI, ONBI, PHC, PSID, SRCO
Markets finished this relatively quiet week much where they began, as a lack of significant catalysts left markets trading mostly sideways and led to the major indices closing decidedly mixed following the week’s activities. All told, the Dow ended the week moderately in positive territory, gaining 82 points to close at 10471, up 0.8% on the week and 19.3% on the year. The Nasdaq lost 0.2% on the week, closing at 2190 bringing its YTD gains to 38.9%, while the S&P 500 finished the week flat but still up 22.5% on the year and the Russell 2000 lost 0.4%, stemming its yearly gains to 20.2%.
Despite the slow week, markets opened sharply lower on Tuesday after ratings agency Moody’s indicated that the US and UK would need to take steps towards reducing deficits in order to avoid threats to their triple A credit ratings, which sent many investors heading for the exits early in the session. Tuesday’s downward move was offset however by a higher open on Thursday following better than expected trade deficit data for October which led to the mixed performance on the week.
Despite the slow week for market driving news, there were further signs of moderate continued recovery, as retail sales for November, Preliminary Michigan Sentiment for December, and October business inventories all managed to beat consensus estimates by modest margins. As a result of the lack of definitive direction on the week, the S&P 500 finished largely mixed, but was led by Utilities, up 3.6%, with Financials leading the laggards, down 1.6%.
What should investors look for this week? Earnings releases pick up moderately; expect results from Best Buy (NYSE: BBY) on Tuesday before the bell, followed after the close by Adobe Systems (NASDAQ: ADBE). On Thursday morning Carnival Cruise Lines (NYSE: CCL), Discover Financial Services (NYSE: DFS), Fed Ex (NYSE: FDX), Morgan Stanley (NYSE: MS) and Rite Aid (NYSE: RAD) are expected to report, followed after the close by Accenture (NYSE: CAN), Nike (NYSE: NKE), Oracle (NASDAQ: ORCL), Palm, (NASDAQ: PALM) and Research in Motion (NASDAQ: RIMM).
Economic releases for the week begin with PPI and Core PPI for November along with Empire Manufacturing for December at 8:30am on Tuesday, followed at 9:00am by Net Long-term TIC Flows for October and Capacity Utilization and Industrial Production for November at 9:15am. On Wednesday, look for Building Permits, Housing Starts, CPI and Core CPI, all for November, released together at 8:30am, followed by weekly crude inventories at 10:30 am and the FOMC Rate decision at 2:15pm. The week wraps up on Thursday with weekly initial jobless claims and continuing claims at 8:30am followed by Leading Indicators for November and Philadelphia Fed data from December at 10:00am.
Conference schedules for the week will be light, beginning on Tuesday in San Francisco with the Roth Capital Partners Medical Device Conference. On Wednesday Credit Suisse hosts their New York Retail Roundup while Raymond James will hold their IT Supply Chain Conference which is also being held in New York.
Enzo Biochem (NYSE: ENZ), a vertically integrated biotechnology company engaged in the research, development, manufacture, licensing and marketing of innovative health care products, technologies and services based on molecular and cellular techniques, reported results for its first fiscal quarter of 2010 for the period ended October 31, 2009. During the period, ENZ posted significantly improved results, posting operating revenues of $25.2 million, a 19% improvement in operating revenues compared to the comparable period in the previous year along with a Gross profit increase of 63%, to a record $13.3 million. Organic core product sales growth in the company’s Life Sciences division topped 26%, while the Clinical Labs division posted a 36% increase in revenues and improved gross margins. Net loss of $1.8 million, or ($0.05) per share for the period was reduced by more than 70%, compared to the year ago period where net loss was $6.4 million, or ($0.17) per share. In other news last week, the company announced that it has entered into an exclusive marketing partnership covering the States of New York and New Jersey with privately-owned Ikonisys, Inc. relating to Ikonisys’ proprietary oncoFISH cervical test, a laboratory developed test for cervical cancer prevention. Enzo Clinical Labs will market the assay to physicians requesting advanced analysis of specimens from liquid based Pap tests to assist them in evaluating cytologic reports. Ikonisys will conduct the evaluation of the specimen using its proprietary CellOptics platform on the Ikoniscope Digital Microscopy System for the interpretation of molecular signals. Shares lost 43 cents on the week to close at $5.48.
Volume Alert: Shares of healthcare services company Hythiam (NASDAQ: HYTM) soared 68% on Friday on more than seven times average volume. The lack of news to explain the outsized gain may have left investors wondering whether the company could be close to inking a deal with a healthcare services company. The company previously said that it expected to land such a deal, which could provide validation for the company’s Catasys offering and a significant source of revenue. During the third quarter the company entered into a deal with Ford Motor Company to provide the Catasys integrated substance dependence solution to certain of Ford’s hourly employees in Michigan. Shares ended the week at $0.48, up 18 cents.
Forbes Medi-Tech Inc. (NASDAQ: FMTI), a life sciences company focused on evidence-based nutritional solutions, announced last week that its proprietary cholesterol-lowering ingredient Reducol, will be included in a new pineapple juice being launched in the Philippines by Del Monte Philippines, Inc. This latest inclusion marks the continued expansion of the Reducol product line, and is a significant step towards management’s goal of increasing market penetration of the cholesterol lowering product further into Southeast Asia. Shares gained 2 cents on the week to close at $0.30.
PositiveID Corp. (NASDAQ: PSID), a provider of unique health and security identification tools to protect consumers and businesses, announced last week that it has entered into a strategic partnership with the Health Network of the Palm Beaches to further the technological development, implementation and distribution of PositiveID’s Health Link personal health record within the medical facilities participating in the Southern Florida Regional Heath Information Organization (RHIO). RHIOs are the micro level organizations tasked with consolidating medical records on local levels so that they may be incorporated down the line into a proposed National Health Information Network that would provide a national database of medical records. Management expects that ensuring seamless communication between Health Link and the electronic medical record systems currently in use in doctors’ offices and hospitals throughout the state, will enable the company to gain significant traction in the product’s roll-out. Shares lost 9 cents on the week to close at $1.08
Volume Alert: Shares of behavioral healthcare provider Pioneer Behavioral Health (AMEX: PHC), gained 6% on over three times average volume on Friday. Recently, the company reported improved results for its 2010 first quarter for the period ended September 30, 2009, where it managed to report its third consecutive quarter of profitability, increasing net patient care revenue by 11.4% on the strength of increased census at the company’s Seven Hills Behavioral Institute in Las Vegas, and its Capstone facility in Detroit which is expected to continue in the current period. The stock ended the week at $1.05, down 3 cents.
Drinks Americas Holdings (OTCBB: DKAM), a company that develops, owns, markets, and nationally distributes alcoholic and non-alcoholic premium beverages associated with renowned iconic celebrities, announced last week that it has sold $150,000 of spirits to its partner, H. Pixel International Trade Ltd., in Israel. In addition to the first order, the companies have come to terms on a final contract under which DKAM will receive a guaranteed minimum of $175,000 in fees and payments annually for the next 15 years totaling approximately $3 million, with potential for additional revenue in the form of incremental bonuses for additional volumes or product additions. Management has indicated that it plans to seek similar arrangements from other distributors and strategic partners. Shares remained unchanged at just under two cents on the week.
ImmunoCellular Therapeutics (OTCBB: IMUC), a clinical-stage biotechnology company that is developing immune based therapies for the treatment of brain and other cancers, announced last week that it has entered into a definitive agreement with an accredited investor to sell up to $10 million of the company’s non-convertible Preferred Stock to the investor over a two year period. Proceeds from the sales are expected to provide working capital, in addition to funding further clinical activity, including planned future clinical trials for the company’s ICT-109 and ICT-121 cancer vaccine candidates for the treatment of glioblastoma. In other news last week, IMUC announced the appointment of three new members to its Scientific Advisory Board: Colonel George Peoples, M.D. Director of the Cancer Vaccine Development Program and Deputy Director of the United States Military Cancer Institute (USMCI), Dr. Constantine Ioannides, Professor of Immunology at the M.D. Anderson Cancer Center, and Dr. Cohava Gelber, Chief Scientific & Technology Officer of ATCC. The recommendations were made with the strong support of IMUC’s Board of Directors, who cited these individuals’ impressive research credentials and leadership within the field of immunotherapeutics and cancer research as reasons for the appointments. Shares lost fifteen cents on the week to close at $0.90.
IceWEB (OTCBB: IWEB), a leading provider of purpose built appliances and building blocks for cloud storage networks, announced last week that it has added a built-in, no-charge virus scanning capability based upon the widely accepted ClamAV software to its Iplicity Unified Storage Platform. ClamAV contains nearly 700,000 virus signatures and is updated in real-time by a broad cross section of the worldwide open-source community in order to protect against malicious code such as viruses, worms, Trojan horses; the new functionality will be made available as a no-charge software Plug-In for current and future Iplicity customers. Shares remained unchanged at just under eleven cents on the week.
Volume Alert: Shares of Next One Interactive (OTCBB: NXOI), an interactive media company specializing in Digital Media with a focus on Travel and Real Estate, gained just under 15% on almost three times average volume last week, following the announcement that its subsidiary Resort & Residence TV has launched Extraordinary Vacations, a travel shopping show now airing on the network. The show is a 30-minute, response driven program showcasing a wide array of travel offers from around the globe including hotel packages, all inclusive resorts, cruises, specialty tours, destination specific vacations and more. The show will allow travel industry organizations such as cruise lines and resorts to market their services directly to consumers via a cost effective channel dedicated to vacation programming. Shares rose 12 cents on the week to close at $1.01.
One Bio (OTCBB: ONBI), a company utilizing green process manufacturing to produce raw chemicals and herbal extracts, natural and health supplements and organic products, announced last week that its chemical and herbal extract division has launched its “Complete Beauty and Treatment Series” over-the-counter product line. The new series of therapeutic products has been developed to target salons and nutrition retail locations, and was officially launched at the 5th Cross-strait Forestry Expo and Fair for Investment and Trade in Sanming City, China to an audience of more than 80,000 people and companies from 15 countries who attended the event. The line will include various skin care treatments and weight management and energy supplements derived from ONBI’s natural herbal extracts and organic products. Shares remained unchanged at $6.10 on the week.
Sparta Commercial Services (OTCBB: SRCO), a nationwide financial services company dedicated to the powersports industry, announced last week that it has signed a Letter of Intent to acquire the assets of a Denver-based consumer finance company, with assets including a portfolio of performing motorcycle loans in excess of $14 million, inventory, cash and other assets; Sparta has indicated that it expects the transaction to close by January 31, 2010. The acquisition is subject to the completion of a definitive purchase/sale agreement, Sparta’s completion of due diligence, the receipt of audited financials, and certain other factors. The ultimate purchase price is subject to adjustment at closing based on the value and performance of the portfolio to be acquired. Shares ended the week at $0.04, down 1 cent.