Companies featured in the current edition of the newsletter: CBMC, CETG, CLXS, CVM, ETGF, GMPM, GNBT, GSPG, IASCA, ICLK, NSMG, SRRY
Despite the holiday-shortened week, the markets remained volatile as nervous investors returned from their summer vacations. The Dow ended the week down 323 points, extending its yearly loss to 15.4%. The tech-heavy Nasdaq lost a whopping 112 points, further contributing to a yearly loss of 14.9%. The S&P lost 41 points for the week, and is now down 15.4% for the year. Meanwhile, the Russell 2000 lost 21 points, pushing its annual losses to 6.2%.
During the past week, investors focused on the worst as mixed economic news were hitting the wires. On Tuesday, the August ISM Index, a national manufacturing survey, indicated a very slight contraction in the manufacturing sector as it slipped to 49.9. On a positive note, the prices paid index declined to 77.0 from 88.5, suggesting an easing of inflationary pressures. Separately, July construction spending showed a continued poor trend as it fell a larger-than-expected 0.6%, versus the expected 0.4% decline. Factory orders also remained surprisingly strong, with the fifth straight month of positive growth. July factory orders rose 1.3%, indicating that manufacturing sector will remain busy. Orders in June were revised higher to 2.1% from 1.7%. On Thursday, the ISM Service Index came in at 50.6 for August, suggesting expansion since it is above 50. Still, the survey received little attention. Jobless data trends continue to suggest a soft labor market as weekly claims jumped to 444,000. Limiting inflationary pressure, productivity increased 4.3%, up from the previously stated 2.2%. The tone Friday was pessimistic early on when non-farm payrolls fell by 84,000 during August, bringing the unemployment rate to 6.1%. However, the major indices were able to recover their early losses as sliding oil prices helped the overall sentiment. Oil ended the week at $106.40 per barrel, down 7.8% for the week. Oil’s decline was also helped by a stronger dollar as the dollar climbed 0.5% against a basket of trade-weighted currencies. It is now up 3.0% this year.
What should investors look for this week? Since the earnings schedule is light, investors on Monday are likely to focus on news over the weekend that suggests that the likely takeover of Fannie Mae and Freddie Mac, and its implications for the economy and taxpayers. A government bailout could cost taxpayers around $25 billion, according to the Congressional Budget Office. Shares of both companies plunged in late trading on Friday, as shareholders in both companies feared that such action would make the stocks in both companies worthless.
Thursday morning’s report from Campbell’s Soup (NYSE: CPB) represents the only notable company reporting results. Texas Instruments (NYSE: TXN) provides a mid-quarter update on Tuesday afternoon. The conference schedule is busy and includes the Sidoti & Company Healthcare Conference in New York on Monday. Also starting in New York on Monday is the three-day Lehman Brothers 6th Annual Global Financial Services Conference. The Deutsche Bank Technology Conference will take place over four days in San Francisco starting on Monday. Meanwhile, the Denver Gold Forum will occur from September 7th through the 10th. Morgan Stanley will host its Global Healthcare Unplugged Conference on Tuesday in New York while the two-day Morgan Stanley Global Industrial CEOs Unplugged Conference begins Wednesday in Dana Point, California. Jefferies & Co will host its 6th Annual Communications Conference in New York City on Tuesday and follow with its 2nd Annual Technology Conference also in New York City on Wednesday and Thursday. Cowen and Company will host its 2nd Annual Clean Energy Conference in New York on Wednesday.
The economic calendar begins with Consumer Credit for July being announced on Monday at 3:00 p.m. Pending Home Sales and Wholesale Inventories for July will both be reported at 10:00 am on Tuesday while Wednesday morning at 10:30 a.m. will bring the usual Crude Inventories for the week. Several important pieces of data will be announced on Thursday, beginning with Import and Export Prices for August, Trade Balance for July, and the Weekly Initial Unemployment Claims all being released at 8:30 a.m. The Treasury Budget for August will follow at 2:00 p.m. Friday’s schedule is also full, starting with August PPI and Retail Sales both coming out at 8:30 a.m. Meanwhile, Business Inventories for July and the preliminary Michigan Sentiment for September will both follow at 10:00 a.m. Additionally, look for comments from Fed President Fisher on Monday.
CEL-SCI Corporation (AMEX: CVM), a company that engages in the research and development of drugs and vaccines used in the treatment of cancer, announced that it presented new rheumatoid arthritis data at the Marcus Evans conference on Immunogenicity in Amsterdam. The data indicate that CEL-SCI’s rheumatoid arthritis vaccine CEL-2000 prevents or retards the permanent tissue damage caused by rheumatoid arthritis in an animal model of the disease. These new findings further support previous positive results announced for this vaccine in June 2008. It is very exciting to see the reduction of severe rheumatoid arthritis damage in these animals through a simple vaccination and the company hopes that CEL-2000 may be used to lessen the damage caused by rheumatoid arthritis in human patients. Rheumatoid arthritis treatments comprise a $13 billion market. The stock ended the week at $0.58, down 2 cents in active trading.
Drug delivery company Generex Biotechnology Corporation (NASDAQ: GNBT) announce that it is sponsoring an international diabetes symposium in Rome, Italy as an adjunct to the 44th Annual Meeting of the European Association for the Study of Diabetes (EASD) taking place in Rome from September 6-11, 2008. Additionally, Generex will present 2 study results at the EASD meeting. An abstract, entitled Measurement of Serum Fructosamine Concentration is a Low-Cost, Easy-Specimen Handling, and Precise Method to Monitor Glucose Fructosamine in Type 1 Diabetes Mellitus,’ will be shown as a poster presentation on September 9, while an abstract, entitled Glucose RapidSpray for a New Management of Hypoglycemia in Children up to 5 Years of Age with Type 1 Diabetes,’ will be shown as a poster presentation on September 8, 2008. The EASD Annual Meeting, which brings together more than twelve thousand delegates in the healthcare industry, is a premier platform for professional exchange in the field of diabetes. Shares closed at $0.65, down 4 cents.
Capital City Energy Group, Inc. (OTCBB: CETG), a diversified oil and natural gas company with three separate divisions, elaborated on its projected revenue for the next two years which was inadvertently disclosed during a shareholder conference call held on August 21st. The well services subsidiary is currently becoming operational. However, the company anticipates that for the year ending December 31, 2008, the revenues from fund management will range from $3.0 to $4.0 million, annually and the revenue from principal investments, which currently are approximately $3.0 million annually, will increase because of investments in the Barnett Shale. The well services could produce another $3.0 to $4.0 million, annually and the company expects to be recognizing annualized gross revenues of approximately $8.0 to $10.0 million by the end of 2008. With respect to 2009, it was indicated that the company could double its annualized revenue recognitions, with margins which are significantly higher than what has previously been recognized in the first half of 2008. Shares lost 10 cents last week to close at $2.70.
Gamma Pharmaceuticals Inc. (OTCBB: GMPM), a marketing and product formulation company focused on innovative product lines of nutritional supplements, personal care products and OTC pharmaceutical products in Greater China and the United States, announced that it has received the Certificate Of Hygiene from the Customs Office in China. The Certificate of Hygiene is a requirement for any imported food grade product, and will allow the company to sell product in the country immediately. The company expects to commence sales of Gamma’s Brilliant Choice Gelibites nutritional supplements this month and plans to appoint up to three national distributors in China. Gamma’s first shipment to China has an approximate value of $300,000. The products were produced in the US, but customized for the Chinese market with dual language labeling and localized formulas. Gamma’s management is very excited to begin selling products in China as they belief the company is well positioned to become a leading supplier of nutritional supplements in China. The stock gained 1 cent to close the week at $1.01.
GoldSpring, Inc. (OTCBB: GSPG), a North American precious metals mining company, focused in Nevada, with extensive, contiguous property in the Comstock Lode District, released assay information for nine additional drill holes in its Hartford Complex. The positive assay results from these nine drill holes continue to expand the depth and surface area of the known mineral resource while the company’s drilling program is on-going. A second drill arrived on site on August 26, 2008 and ColdSpring has commenced the drilling of an additional 135 development drill holes with the objective of providing drill hole data for detailed mine planning. In addition, the company has provided an update on its forthcoming 43-101 resource report which it anticipates receiving latter this month. The upcoming Telesto 43-101 resource report will include an additional 19 holes as a result of increased exploration activity, and will be based on GoldSpring’s 57 drill holes plus numerous historic drill holes largely drilled in the 1990’s. The remaining geologic and assay data has been forwarded to the engineer. Shares were unchanged at $0.036.
Element 21 Golf Company (OTCBB: ETGF), the manufacturer of advanced Scandium Alloy golf and fishing equipment, announced that Vijay Singh, using Element 21’s Scandium shafts, won the Deutsche Bank Championship for his second straight victory in the PGA TOUR Playoffs for the FedEx Cup. Since Singh is using the shafts on unendorsed basis since 2007, ETGF cannot use the player’s name and likeness to get the Scandium message across. However, this past week Golf Week, a major golf publication, has shed some light on the Scandium shafts in its “What’s in the Bag?” segment. This is great publicity for the company as it could lead to a lot of interest in the shafts. Following his switch to the Scandium shafts, Singh, who is currently the leader in the FedEx Cup points standing, was quoted as saying that he experienced less vibration and, therefore, less strain in his elbows when he hits the Scandium shafts. He has suffered from an ongoing elbow injury, so the Scandium shafts, with vibration dampening ShockBlok technology, help keep that from flaring up. The stock lost $0.17 during the week, to close at $1.00.
IAS Energy, Inc. (OTCBB: IASCA), which has an option to acquired up to a 100% interest in an Chinese Internet company, announced that it has exercised its third option and will now own a 60% interest in Power Telecom Limited, which entirely owns www.video1314.com. Video1314.com is a Hong Kong based company that is a Chinese Web 2.0 platform similar to YouTube and has launched a Chinese version of Market Place. The webiste has increased the hits to its site from 4 million in November 2007 to 14 million in July 2008. The company’s plan is to increase the monthly hits to 50 million per month by the end of 2008 and to generate revenue from advertising. Investors should remember that less than 2 years ago, Google bought YouTube for $1.65 billion and that www.video1314.com is trying to greatly expand upon the functionality offered by YouTube. The stock gained 7 cents last week to close at $0.27.
National Storm Management, Inc. (OTC: NSMG), a national construction company providing storm restoration services in seven states, released earnings for the second quarter ended June 30th. The second quarter operating loss was $325,000 compared to $453,000 in the first quarter of 2008 and $1.3 million in the second quarter of 2007. The operating loss was the lowest in the last three years as the company continues its rebuilding process after surging growth in 2004 and early 2005. Going forward, the company will concentrate on adding one or two additional locations. The Atlantic hurricane season has been extremely active and company’s Florida and Georgia operations are currently tracking three named storms that have possible East Coast ramifications. NSMG is prepared to help these areas recover if a storm should hit. Shares lost a penny to close the week at $0.03.
Collexis Holdings Inc. (OTCBB: CLXS), a developer of semantic search and knowledge discovery software, has been named one of KMWorld magazine’s Trend-Setting Products of 2008 for the second consecutive year. Collexis is a leader in Knowledge Discovery. The company’s new engagements with Johns Hopkins, Mayo Clinic, the National Institutes of Health and other leading life science institutions, have been complimented with similar growth in defense, intelligence and legal markets. The stock closed at $0.40, up 3 cents.
On the Wires: interCLICK, Inc. (OTCBB: ICLK), the fastest growing advertising network in the U.S. according to comScore, announced 3 new hires last week. Matthew Burgoon was hired as director of media operations and Andrew Rosen as senior sales director, East Coast. The AOL and Specific Media alumni bring deep online advertising experience and further strengthen interCLICK’s East Coast sales and operations team. In addition, Monica Seebohm has been hired as the company’s senior director of sales, Southwest region. In this role, Seebohm will head interCLICK’s new Los Angeles office and be in charge of strengthening the company’s relationships with regional online advertisers and agencies. Seebohm is heavily involved in the area’s interactive community and was previously a strategic accounts manager with ValueClick Media, a division of ValueClick, Inc. Calypte Biomedical Corporation (OTCBB: CBMC), a developer, manufacturer and marketer of HIV diagnostic tests, announced that Jerrold D. Dotson resigned from his positions as Vice President-Finance and Administration and Secretary to pursue other opportunities. Dotson will remain with the company as a consultant until such time as the company appoints a permanent CFO. In the interim, Donald N. Taylor, the company’s President and CEO, will serve as interim CFO. Sancon Resources Recovery, Inc. (OTCBB: SRRY), a rapidly growing Chinese environmental services and waste recycling company, announced that on August 27th Klaus Shen resigned as the CFO of the company due to personal reasons and Mr. Gary Li has been appointed as the new CFO.