Companies featured in this edition of the newsletter: ACTC, CVM, CHIP, ENZ, HYTM, IWEB, ONEZ, PHC, SIHI, SRCO
Markets continued their strong performance this week in the absence of any major market driving earnings or economic reports, as the broad based buying that characterized the previous week continued and led to gains in all of the major indices. All told, the Dow added 2.5% on the week, gaining 247 points to close at 10,270, up 17.0% on the year. The Nasdaq posted a 2.6% gain on the week, closing at 2,167 to extend its yearly gains to 37.5%, while the S&P 500 and Russell 2000 gained 2.3% and 1.0% respectively, bringing their yearly gains to 21.1% and 17.4%.
Equity markets carried the momentum from the previous week’s session, as the thin economic calendar and lack of significant earnings reports provided little incentive for investors to slow their buying activities. The dollar remained a strong catalyst in the absence of any other major market driving announcements, which helped lead commodities higher and resulted in the materials sector posting the largest gain of the S&P’s ten sectors, coming in up 4.2% on the week. In related news, gold continued its strong move, hitting another all time high at $1,123.40 an ounce, as investors continue to eye weakness in the dollar and monitor signs of inflation.
What should investors look for this week? Earnings reports will be light again, but expect results from Lowe’s (NYSE: LOW) before the bell on Monday, followed on Tuesday morning by Home Depot (NYSE: HD) and Target (NYSE: TGT). BJ’s Wholesale (NYSE: BJ) reports Wednesday pre-market with Sears Holdings (NASDAQ: SHLD) reporting Thursday before the bell while Dell (NASDAQ: DELL) wraps things up after the close that same day.
Economic releases for the week begin with Retail Sales for October due out at 8:30am Monday morning along with Empire Manufacturing for November, followed by September Business Inventories at 10:00am. On Tuesday, expect PPI and Core PPI for October due out at 8:30am, followed by Net Long term TIC flows for September at 9:00am and Capacity Utilization and Industrial Production for October at 9:15am. On Wednesday, Housing Starts and Building Permits for October will be released in tandem with CPI and Core CPI for October at 8:30am, followed at 10:30am by weekly crude inventories. Things wrap up on Thursday with weekly initial jobless claims and continuing claims at 8:30am, followed by Leading Indicators for October and Philadelphia Fed minutes from the November meeting at 10:00am.
Conference schedules will be full again this week, beginning on Monday with the two day Deutsche Bank Securities G2E Gaming Investment Forum being held in Las Vegas. The Dow Jones Newswires Alternative Energy Conference begins on Tuesday in San Francisco, as does the two day Oppenheimer & Co. Industrials Conference, being held in New York along with the two day Bank of America Merrill Lynch Small & Mid Cap Conference . Enzo Biochem (NYSE: ENZ) will present at the two day Lazard Capital Markets Healthcare conference in New York on Tuesday. On Wednesday, the two day Sidoti & Co. Emerging Growth Institutional Investor Forum begins in New York along with the two day Morgan Stanley Global Consumer & Retail Conference and Citigroup Small/Mid Cap Conference.
Managed care provider, Hythiam (NASDAQ: HYTM), announced results for its third quarter ended September 30, 2009 last week, in addition to providing further details regarding its agreement with the Ford Motor Company. HYTM indicated that it expects to finish implementation of the Ford agreement in the Fourth Quarter of 2009, and expects revenue to begin in the first quarter of 2010. For the 2009 third quarter, the company reported revenues of $268,000 from its continuing operations, compared to revenues from continuing operations of $1.3 million during the comparable period last year. The decrease in healthcare services revenues was primarily attributable to the difficult economy and the company’s decision to streamline operations by reducing operating costs and resources supporting private-pay to focus on managed care opportunities. Loss from continuing operations for the 2009 third quarter was $8.8 million, or $0.16 per share, versus a loss of $6.4 million, or $0.12 per share, in the third quarter of 2008. Shares lost a penny on the week to close at $0.40.
Verichip Corporation (NASDAQ: CHIP), a provider of radio frequency identification systems for healthcare and patient-related needs, which recently announced its intention to acquire identity security provider Steel Vault to form PositiveID Corp, announced last week that it has completed the acquisition, and will change its name in accordance with its previously announced plans. The newly formed entity, PositiveID Corp, will trade on the NASDAQ under the symbol PSID, and will provide unique health and security identification tools to protect consumers and businesses, representing the convergence of a pioneer in personal health records and the first and only FDA-cleared implantable microchip for patient identification. PositiveID will initially operate primarily in two areas: HealthID and ID Security, with HealthID focused on bringing innovative health solutions to consumers and businesses based on the company’s intellectual property, specifically a rapid virus detection system for the H1N1 virus and other forms of pandemic viruses, and an in vivo glucose-sensing RFID microchip, both of which are currently under development with partner RECEPTORS LLC. The ID Security division will offer identity theft protection and related services including credit monitoring and reporting through its NationalCreditReport.com website. Under the terms of the agreement, Steel Vault stockholders will receive 0.5 shares of VeriChip common stock for every share of Steel Vault common stock held, with outstanding warrants and options to be converted at the same ratio. Shares gained fourteen cents on the week to close at $1.61.
CEL-SCI Corporation (AMEX: CVM), a developer of vaccines for the prevention and treatment of infectious diseases and a late-stage oncology company, announced last week that Dr. Kenneth S. Rosenthal, Professor of Immunology and Microbiology of Northeastern Ohio Universities College of Medicine and Pharmacy, reported on work conducted in collaboration with scientists at the Cleveland Clinic and CEL-SCI investigating CEL-SCI’s LEAPS vaccine technology at the 7th GTCbio Vaccine Conference in Crystal City, Virginia last week. Scientists worked with LEAPS vaccines for herpes simplex virus, HIV, rheumatoid arthritis and most recently, H1N1 influenza, with results demonstrating that LEAPS peptide immunogens can convert precursor cells from mouse or humans into dendritic cells, the cells that direct the subsequent immune response. Results further demonstrated that immunization with a LEAPS-immunogen for the herpes simplex virus activated a protective T cell immune response against the virus in mice while a LEAPS-immunogen for treatment of rheumatoid arthritis (CEL-2000) reduced the production of the pro-inflammatory cytokines to block the progression of disease in mouse models. Management indicated that it is encouraged by the new data, which it feels is supportive of its H1N1 treatment for hospitalized patients where the goal is to produce a specific anti H1N1 immune response, similar to those demonstrated in the herpes and arthritis models, that will steer the immune system towards protection and away from a cytokine storm which may be responsible for many infected patients’ deaths. Shares gained eleven cents on the week to close at $1.32
Pioneer Behavioral Health (AMEX: PHC), a leading provider of inpatient and outpatient behavioral health services, announced results for its 2010 first fiscal quarter last week, for the period ended September 30, 2009. During the period, the company managed to report its third consecutive quarter of profitability, increasing net patient care revenue by 11.4%, while improving net income from continuing operations by $790,000. Among the highlights was an increase in total net revenue from continuing operations, as the company generated $12.6 million for the three months ended September 30, 2009 compared to $11.7 million for the three months ended September 30, 2008, attributable to higher net patient care revenue, which was partially offset by a decline in contract services revenue. Net patient care revenue increased 11.4% to $11.8 million for the three months ended September 30, 2009 from $10.6 million for the three months ended September 30, 2008 and 8.7% from $10.8 million for the quarter ended June 30, 2009; the gains are the result of increased census at the company’s Seven Hills Behavioral Institute in Las Vegas, and its Capstone facility in Detroit. Income from operations improved $790,717 to $355,898 for the 2010 fiscal first quarter compared to a loss of $434,819 in the same period a year ago. Net income applicable to common shareholders was $223,604, or $0.01 per diluted share, compared to a net loss of $332,703 or $0.02 per share in the fiscal 2009 first quarter. Shares lost eight cents on the week to close at $1.05
Earnings preview: Chinese electronics supply chain management company SinoHub (AMEX: SIHI) is set to release third quarter earnings on Monday before the bell, and will hold a conference call to discuss results that morning at 10:30am EST. During the company’s second quarter, it demonstrated robust growth including a nearly six-fold increase in net income and revenue growth of more than 137%, compared with the 2008 second quarter. Net income for the 2009 second quarter grew substantially to $3.2 million, or $0.13 per share, from $540,000, or $0.03 per share in the corresponding year ago period. Total revenues for the 2009 second quarter also rose significantly, to $31.4 million from $13.2 million for the 2008 second quarter. Investors will likely focus on the company’s ability to maintain sustained growth and profitability as China emerges from the global economic slowdown; parties interested in the conference call can access a live broadcast via the company’s website. Shares lost five cents on the week to close at $4.80.
Advanced Cell Technologies (OTCBB: ACTC), a company engaged in the development of regenerative therapies utilizing stem cells, announced that its Chief Scientific Officer, Robert Lanza, M.D., was chosen to give an opening Plenary Lecture at the 3rd International Conference on Cell Therapy, which was held in Seoul, Korea last week. Dr. Lanza delivered a presentation titled “Embryonic and Induced Pluripotent Stem Cells – Moving from the Bench to the Bedside.” During the presentation, Dr. Lanza discussed the company’s various preclinical programs, including its retinal pigment epithelium (RPE) technology, which the company plans to file an Investigation New Drug (IND) application for this quarter to begin human clinical trials. Shares remained unchanged on the week at $0.10.
IceWEB (OTCBB: IWEB), a leading provider of purpose built appliances and building blocks for cloud storage networks, announced last week that it has been chosen to provide key servers used by security personnel at the 2010 World Summit in Canada. IWEB will provide its Modular Lightweight Portable (MLP) server, which will serve as the primary mobile command center for an array of security and infrastructure protection forces tasked with providing a safe environment for the major gathering of international world leaders. The server’s ability to deploy mission critical content and connectivity typically limited to a headquarters based network, in combination with its standing as a high performance, scalable solution, engineered as a field deployable package, has lead it to become a top choice for security details tasked with protecting high profile international events. Shares lost two cents on the week to close at $0.15.
ONE Holdings (OTCBB: ONEZ), a green process manufacturer of high quality health supplements, organic fertilizers and pesticides, announced last week that it has signed an agreement with one of Japan’s largest supermarket operators, Kobe Bussan Supermarkets, to expand its organic food product line offered through Kobe’s supermarket stores, marking a continued collaborative arrangement between Kobe and ONEZ’s subsidiary United Green Technology, Inc. The expanded product lineup will include fresh bamboo health products, organic bamboo, vegetable products, and the company’s newly developed organic convenience packs. The expanded agreement is expected to contribute an additional $8 million per annum to sales within the next two years. Shares lost four cents on the week to close at $1.22.
Sparta Commercial Services (OTCBB: SRCO), a nationwide financial services company dedicated to the powersports industry, continues to improve its balance sheet, as it announced last week that it has closed on the sale of additional preferred stock and warrants. The purchase was made by Optimus Capital Partners, and brings the total amount to date invested by Optimus to $1,570,000. In addition to this latest purchase, Optimus has also exercised warrants to purchase 13,500,000 shares of common stock at an exercise price of $.09 per share for $1,215,000. Sparta has also converted or received written agreements to convert an additional $945,000 of notes and accounts payable to equity, in addition to the $6 million in note and accrued interest conversions previously announced. This leaves approximately $100,000 in notes payable remaining on the company’s balance sheet as compared to $5.5 million at the end of its fiscal year April 30, 2009. The company expects that the $9.7 million that it has been able to raise in new equity and converted debt over the past three months will position it to begin utilizing the initial $25 million under its previously announced secured senior credit facility, which would significantly enhance its ability to expand its financing operations. Shares remained unchanged at $0.05 on the week.