Companies featured in the current edition of the newsletter: ACCP, ACCY, AFMI, CBMC, CETG, CKGT, CLXS, GNBT, GSPG, HSOA, PLKH, PSTI, RVEP, TSXV: SEE, SWVC, XCR
For the month of May the Dow was the only major average that lost ground as it was held back by a 22% decline in AIG. Conversely, the S&P 500 rose 1.1%, the Nasdaq jumped 4.6%, the S&P 400 surged 5.1% and the Russell 2000 gained 4.5%. Last week, a short week of trading produced some positive results for investors with long positions as each of the major indices scored gains in excess of 1.0%. The S&P 500 gained 24 points, bringing its year to date loss to 4.6%. The Nasdaq Composite Index increased by 78 points, cutting its year to date loss to 4.9%. The Dow recorded a gain of 159 points, reducing its year to date loss to 4.7%. Russell 2000 had the largest percentage gain last week of 3.3% or 24 points, bringing its year to date loss to 2.3%.
As to be expected, the movement in oil prices was a focal point throughout last week. There were times when oil looked as if it might be ready to make a push to new highs, yet each time it was beaten back on profit-taking efforts. The lack of conviction on the part of buyers contributed to the view that oil prices may have finally hit a point of meaningful demand destruction that will ultimately produce lower prices. Economic news for the most part fell on the better side of things last week. Durable orders, excluding the volatile transportation component, jumped 2.5%, first quarter GDP was revised upward to 0.9% from 0.6%, initial claims held fairly steady at 372K and new home sales increased 3.3% in April to an annualized rate of 526K units.
The Treasury market didn’t have nearly the same success as a compendium of factors, such as supply issues, an unwinding of risk aversion trades, and inflation concerns, succeeded in knocking it back. The yield on the benchmark 10-year note rose 22 basis points to 4.06%, which puts it a hair above the 3.9% inflation rate seen in the latest CPI report. The commodity market also took a tumble. The CRB Index, which tracks 19 different commodities, fell 2.1%. Strength in the dollar, which was up 1.4% against a basket of major currencies contributed to the pullback. Despite the weakness seen this week, the CRB Index still gained 3.2% in May and is up nearly 18% year-to-date.
What should investors look for this week? After a busy month, there are no major corporate earnings announcements this week. On the economic front, April Construction Spending and May ISM Index will be released Monday at 10:00 a.m. Shortly after the opening on Tuesday, May Auto/Truck Sales and April Factory Orders will be announced. Revised Q1 Productivity, May ISM Services and Weekly Crude Inventories will be reported Wednesday. Weekly Initial Jobless Claims will be announced Thursday at 8:30 a.m. May Average Workweek, May Hourly Earnings, May Non-farm Payrolls, and May Unemployment Rate will all be reported on Friday at 8:30 a.m. Following later in the day, April Wholesale Inventories and April Consumer Credit Report will be released.
There are a number of conferences being held this week, beginning Monday with the two day Goldman Sachs Lodging, Gaming, Restaurant and Leisure Conference being held in NYC and the two day RBC Capital Markets Energy Conference in NYC. Tuesday will feature the two day JPMorgan Basics & Industrials Conference in NYC and the Lehman Brothers Global Warming Solutions Conference in NYC. The three day National Association of Real Estate Investment Trusts Investor Forum in NYC and the Merrill Lynch Agricultural Chemicals Conference in NYC will begin Wednesday. Sandler O’Neill & Partners Global Exchange and Electronic Trading Conference will take place in NYC on Friday.
Roth Capital Partners initiated coverage last week of Xcorporeal (AMEX: XCR), a medical technology company developing a portable hemodialysis system, designed to improve significantly the manner in which ESRD (end-stage renal disease) patients are treated. The firm used “a discounted price to sales multiple sensitivity analysis that would peg the stock in the range of $5 to $7 today, and a comparable trading and transaction review, which implied a $10 potential value for XCR.”The analyst in his reported noted that “With over half a million patients expected to receive chronic kidney therapy over the next several years and 5-year mortality rates standing in the 30% range, we believe Xcorporeal is targeting a large, unmet clinical need with a device design that should provide improved quality-of-life (QOL) and therefore better outcomes than those allowed by today’s available products. Xcorporeal’s PAK (Portable Artificial Kidney) system is being designed to be (1) lighter / smaller than today’s at-home devices for improved portability and (2) avoid the need for high volumes of dialysate used in conjunction with therapy. Over the past couple of years, we believe that Xcorporeal’s primary competitor, NxStage, has blazed the trail for at-home dialysis (both clinically and economically). If Xcorporeal is able to develop and obtain approval for the device it has designed, we believe the company will be positioned to capitalize on a trend toward more frequent at-home therapy.” He concluded that “We expect catalysts for shares in the next few quarters to include regulatory approval for both the critical care and home therapy markets, as well as the establishment of strategic partnerships in the industry.”
Drug delivery company Generex Biotechnology Corporation (NASDAQ: GNBT) announced that it has received a Commercial License from the Government of Dubai, United Arab Emirates. Under the auspices of this Commercial License, Generex has established a branch office in exclusive Dubai Healthcare City operating as “Generex Biotechnology Corporation Mena.” Generex, through this branch office, will work closely with the regulatory and marketing personnel of Leosons General Trading Company, the company’s licensee in the region for the registration, importation, marketing, distribution, and sale of Generex Oral-lyn, the company’s proprietary oral insulin spray product. This augmented presence in the region will assist Generex to bring Generex Oral-lyn and its new paradigm for the treatment of diabetes to the more than 15 million patients with diabetes in the region. Shares rose by $0.07, to finish the week at $1.02.
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 company’s PLacental eXpanded cells have demonstrated in vivo efficacy in the treatment of Crohn’s Disease and Ulcerative Colitis, collectively termed Inflammatory Bowel Disease. PLX cells are Pluristem’s placental-derived mesenchymal stromal cells that have been expanded in the company’s proprietary PluriX 3-D bioreactor. This trial’s favorable results, which demonstrate PLX cells’ ability to treat Inflammatory Bowel Disease, as well as previous studies indicating their potential use to help Multiple Sclerosis patients, show the potential for the company’s PLX cells to treat global autoimmune diseases. Shares fell by $0.07, to finish the week at $1.88.
Rio Vista Energy Partners L.P. (NASDAQ: RVEP), an energy services master limited partnership, announced that it had received a letter from the Nasdaq Stock Market staff indicating that, based on the company’s report on Form 10-Q for the period ending March 31, 2008, Rio Vista was not in compliance with the shareholders’ equity requirement for continued listing on The Nasdaq Global Market. Rio Vista reported stockholders’ equity of $9,955,000, $45,000 short of the $10,000,000 requirement set forth in Nasdaq’s Marketplace Rule 4450(a)(3). The company plans to remedy the $45,000 shortfall and establish a plan for ongoing compliance with the Nasdaq shareholders’ equity requirement for continued listing on The Nasdaq Global Market. Rio Vista is confident that the additional equity will be supplied by its parent company, Penn Octane Corporation, from available cash, and will come in the form of Penn Octane’s purchase of additional Rio Vista common units. The stock finished the week unchanged at $10.10.
Access Pharmaceuticals, Inc. (OTCBB: ACCP), an emerging biopharmaceutical company that develops and commercializes propriety products for the treatment and supportive care of cancer patients, gave promising oral and poster presentations at the International Symposium on Polymer Therapeutics: Laboratory to Clinical Practice, in Valencia, Spain last week. The presentation on its Cobalamin technology revealed new data that provides strong evidence that the technology can provide a substantial lowering of blood glucose levels in an animal model of diabetes when compared with unformulated insulin given orally, and a glucose-lowering effect which has much greater duration when compared with using insulin given subcutaneously. In addition, data was presented which showed that Cobalamin-targeted polymer-linked daunorubicin reduces tumor volume following intravenous administration in an animal model, providing superior efficacy when compared to polymer-daunorubicin without the targeting group, and substantially superior efficacy to daunorubicin alone. A second presentation titled “Promising Safety and Efficacy Results from an Ongoing Clinical Study of ProLindac in Recurrent Ovarian Cancer,” showed that Access’ novel DACH platinum-polymer prodrug, which has been shown to be active in a wide variety of solid tumors in both preclinical models and in human trials, was promising from data presented from ongoing Phase 2 monotherapy clinical study of ProLindac in patients with recurrent ovarian cancer. In two dosing regimens, ProLindac was given once every two weeks and once every three weeks. During the last and highest dose levels explored, sustained and significant reductions in the specific serum market Ca-125 were seen over multiple dosings in several patients. ProLindac was well-tolerated with minimal side-effects. The stock rose by $0.25 for the week, to close at $3.25.
Alternative Construction Technologies, Inc. (OTC BB: ACCY), a company that possesses a unique and patented construction technology called the ACTech Panel System that is used in the design and erection of state-of-the-art buildings, announced that it completed a secured financing of up to a maximum $3 million, expandable to $4.5 million, pursuant to the terms of a Line of Credit Agreement among ACT and BridgePointe Master Fund, Ltd. and CAMOFI Master LDC. Initial funding of approximately $1.5 million was received upon closing. The stock fell by $0.05, to finish the week at $2.65.
Affinity Media International Corp. (OTCBB: AFMI), a special purpose acquisition company that previously announced a definitive agreement to acquire Hotels At Home, Inc., an industry leading publisher of in-room retail catalogs and hotel-branded e-commerce Web sites for luxury hotels and resorts worldwide, announced Hotels At Home’s financial results for the three months ended March 31, 2008. Total revenue for the three months ended March 31, 2008 was $5.8 million, as compared to $5.5 million for the comparable period in 2007, a 5.9% increase. The company added approximately 75,000 hotel rooms during the first quarter of 2008 and expects to realize the benefit of those additional rooms to revenue during the second half of 2008. Gross profit for the three months ended March 31, 2008 was $3.7 million, a 5.6% increase over the $3.5 million reported in the same period in 2007. At March 31, 2008 Hotels At Home had cash, cash equivalents and marketable securities of $3.3 million compared to $3.1 million at March 31, 2007. The company also announced that it extended its stockholder vote on merger with Hotels at Home, Inc. to June 6, 2008. Shares rose by $0.09 for the week, to close at $6.02.
Calypte Biomedical Corporation (OTCBB: CBMC), a developer, manufacturer and marketer of HIV diagnostic tests, announced the launch of a new product line, Calypte Life Sciences. Calypte Life Sciences offers a broad range of recombinant proteins and antigens as well as proprietary reagents, buffers, and other specialty products to researchers and institutions seeking to develop and optimize immunodiagnostic assay systems. Calypte Life Sciences products are being distributed through a new on-line catalog at www.calyptelifesciences.com, as well as through Calypte’s established worldwide network of distributors. The Life Sciences catalog provides a further means by which the company can capitalize on its R&D investment and bring new products to market quite quickly. The Life Sciences division will serve the needs of a large and diverse group of customers that includes universities, governmental organizations, and private companies focusing primarily on assay development. The stock rose by a penny, to finish the week at $0.06.
Volume Alert: Shares of construction services company Home Solutions of America, Inc. (OTC: HSOA), jumped 6% on Friday on the strongest volume in months and more than five times average volume. Perhaps shares rallied on hopes that the company will reach a resolution with its lenders, as a July 1st deadline looms for the company to reach a permanent solution with the banks that participated in its Revolving Credit Facility, Term Loan and Letter of Credit Facility. As of mid February, the outstanding amounts due under the facilities were $39.9 million. Or, the stock might have rallied last week as a result of a forecast for an active hurricane season. Shares rose 10 cents to end the week at $0.70
China Kangtai Cactus Biotech Inc. (OTCBB: CKGT), a vertically integrated grower, developer, manufacturer and marketer of a variety of cactus-based consumer products in China, announced that its wholly-owned subsidiary Harbin Hainan Kangda Cactus Hygienical Foods Co., Ltd. has been granted The National Invention Patent of China, a key patent for the nutritional use of cactus to enhance the immune system through its ability to prevent infection and anti-inflammatory diseases. This patent protects the investments the company has made in developing a portfolio of cactus-based consumer products in China and provides additional recognition of its leading position in the marketplace. The company has also entered into a long term cooperation agreement related to the research and development of animal feed with The State Ministry of Agriculture Feed Industry Center. This cooperation combines science and technology, full range equipment, and will allow the company’s scientific research personnel to collaborate with the information resources of The State Ministry of Agriculture Feed Industry Center. Shares fell by $0.04 for the week, to close at $0.66.
Volume Alert: Shares of GoldSpring, Inc. (OTCBB: GSPG), the largest mineral rights land holder in Nevada’s Comstock Lode Mining District, jumped more than 10% last week on heavy volume after the company reported that it had completed sufficient drilling at its Hartford Complex project to support the company’s preliminary 43-101 resource report. To date, the company has drilled 50 holes and has received third-party assay results for the first 36 of those drill holes. The company expects to receive assay results for the balance of the 50 drill holes in early June. The Hartford Complex represents less than five percent of the company’s total landholdings in the Comstock Lode. The 43-101 report is expected to delineate the amount of reserves the company has and could serve as a significant catalyst for the stock. The stock ended the week at $0.0166.
ProLink Holdings Corp. (OTCBB: PLKH), a leading provider of Global Positioning Satellite golf course management systems and digital out-of-home on-course advertising, announced that Geneva Farm Golf Course now features the ProLink Solutions GPS system used at many of the world’s most famous golf courses. Geneva also plans to participate in ProLink’s exclusive national advertising opportunity, which generates high-margin revenue for PLKH. The stock fell by $0.05 for the week, to close at $0.52.
SeaMiles Limited (TSX VENTURE: SEE), North America’s premier cruise loyalty provider, announced first quarter results for the period ended March 31, 2008. For the 2008 first quarter, the company reported total revenue of $2.6 million, an increase of 13% compared to $2.3 million during the same quarter in 2007 as a result of growth in the cruise loyalty program. The 2008 first quarter net loss was $104,197 or $0.01 per share compared to net income of $6,531 in the 2007 first quarter, primarily due to increased advertising and promotion to market to cruise industry customers, lower interest income and a weaker U.S. dollar. The 2008 first quarter results reflect continued success in increasing membership in the company’s cruise loyalty programs. SeaMiles also looks forward to completing the sale of its remaining real estate assets, which will improve the company’s balance sheet and allow management to focus 100% of its efforts on further building its brand among cruise industry enthusiasts. Shares fell by $0.09, to finish the week at $1.86.
Seaway Valley Capital Corporation (OTCBB: SWVC), a company that invests in equity, equity-related, and debt in companies that require expansion capital and in companies pursuing acquisition strategies, announced that its wholly owned subsidiary, Sackets Harbor Brewing Company, has officially launched its award winning premium “War of 1812 Amber Ale” in central Florida. The company’s 1812 Amber Ale has been launched at Gator’s Dockside Restaurants, which is headquartered in Orlando and has eighteen locations throughout Florida including Jacksonville, Gainesville, Orlando, Tampa, and Port St. Lucie, among others. Gator’s Dockside is one of a handful of regionally popular restaurant and sports bar chains featuring a family dining experience in a high energy environment that also caters to the sports enthusiast. Gator’s has initially chosen to launch 1812 Amber Ale at eight of its locations primarily in and around the Orlando area – but expects to roll the award winning ale throughout the chain if successful. Seaway also announced that its wholly owned subsidiary, Patrick Hackett Hardware Company, has scheduled a grand opening date of Saturday, June 14th for its newest store in Canton, NY, which is located in the University Plaza on US Route 11. The Hackett’s Canton grand opening represents the first of five former WiseBuys stores that the company will be transitioning into Hacketts over the coming months. The stock remained under $0.01 for the week.
On The Wires: Collexis Holdings Inc., (OTCBB: CLXS) has been included in the list of “Cool Vendors” in the Cool Vendors in Content Management, 2008 by Gartner, Inc.ProLink Holdings Corp. (OTCBB: PLKH) announced that Richard Spitz, Global Managing Director of Korn/Ferry International’s Technology Market has joined its new Strategic Advisory Board. Capital City Energy Group (OTCBB: CETG) announced that it has appointed James E. Bishop to its Board of Directors.