The new year started with a bang. International markets rallied early, then the U.S. markets followed suit with the DOW posting a gain of over three hundred points before closing strong into the bell. Green was the theme for 2013 thus far and Wednesday's strong finish could indicate that another push higher is in the works for Thursday's trading, barring any unforeseen news, although the armchair quarterbacks are out in force during the early hours Thursday addressing the fiscal deal's shortcomings. For now, however, the markets are clear from controversy, aside from the sideline criticisms. New tax increases included in the fiscal deal were duly expected and have done little to keep investors from playing the game early-on in 2013, despite previous fears by some media outlets to the contrary. Washington is unlikely to engage debt ceiling negotiations this week, concentrating fully on the Hurricane Sandy relief package, which has become DC's talk of the day. Other political issues may steal the spotlight for Congress over the short term, freeing the markets to rally and pull back on individual stories for the time being, rather than trading along with the daily banterings of Washington.
Before long, too, we'll have another round of earnings to digest. We could also see some market fluctuations at that point, once the season picks up steam, especially since many retailers have already warned of weaker-than-expected fourth quarter numbers.
For now, though, we'll enjoy the show.
Here's a few stocks and stories to keep an eye on Thursday ...
Dendreon Jumps Ten Percent
It's a brand new day - and year - for Dendreon (DNDN). DNDN shares slugged through a disappointing 2012 after they were unable to rally following a late-summer crash the year prior, but a ten percent spike on the opening trading day of 2013 reinforces the optimism held by the company and its investors moving forward during the coming months. Numerous rounds of cost-cutting measures and lay-offs have helped the company conserve its cash and trim operating costs while Provenge, the company's immutherapeutic prostate cancer treatment, looks to gain a permanent foothold in the market as a solo or combination therapy. Dendreon's resurgence has somewhat coincided with a run of positive press from multiple financial media outlets and 2013 could go down as a rebound year for the once trend-setting company.
Aside from the cost-cutting measures placing DNDN back on solid footing, the expanded support of the insurance provider Aetna (AET) has laid the groundwork for a potential boost in Provenge sales this year, and could also be a precursor for other insurance providers to jump on board. Additionally, Provenge could grow even more support from doctors and insurers if data continues to prove its worth in combination with other drugs and therapies, such as Medivation's (MDVN) Xtandi, Sanofi's (SNY) Jevtana, and Johnson & Johnson's (JNJ) Zytiga, for example.
Although there have been positive results from the cost-cutting, Dendreon will need to make a move on the earnings front moving forward to keep investors from treating the stock as a hold and not merely a trade. Last quarter's report demonstrated twenty seven percent growth from the same quarter of the previous year, but the numbers were modestly lower than the quarter immediately prior. Should the company report rebounding growth for the just-closed quarter, then that could rightly add fuel to the ongoing rebound fire.
Investors will also be watching this year for a move into the European market. The revenue boost provided by an approval overseas could yet again underline the rebound potential and even send shares back towards the double-digit mark that investors have missed, especially if evidence persists that expanded insurance coverage is providing the expected boost in America.
DNDN is approaching levels of becoming a double from it's autumn lows last year, so some profit-taking and consolidation should be expected, but the pieces look to be falling into place again for this company. Wednesday's ten percent price spike on double-the-norm volume shows that investors like what they see.
FuelCell Energy Moving To The Mainstream
Shares of FuelCell Energy (FCEL) traded along with the market on Wednesday, posting a near-three percent gain on above-average volume, but a recent report circulated by the Associated Press (AP) could be further validation that the clean-energy provider is moving to the mainstream of the energy sector.
In December of last year reports surfaced that FuelCell, in collaboration with Dominion Resources (D), would develop the largest fuel cell power project in North America. This is deal was noted at the time as not only significant because it brought the company's backlog of orders to over $125 million, according to Bloomberg reporting, but also because it emphasized the capability of the technology to supply significant power sources independent of the regional and/or national grids. Such a capability is hugely in the spotlight right now following the events and mass power outages caused by Hurricane Sandy and the Dominion deal proves that energy providers and governments are taking notice.
Evidence as such is provided by the above-linked AP report which stated that, "The plant is part of a state program to increase renewable and clean energy projects. FuelCell Energy is receiving $5 million in loans to be repaid to the state Clean Energy Finance and Investment Authority and a $1.5 million grant."
FCEL shares had jumped by over seven percent when the deal was announced last month, but have since fallen to previously-traded levels before Wednesday's jump. Some of the quick decline may have been attributed to tax-loss selling, since shares are trading for well below their 2012 highs, but investors have also been inclined - due to quick and volatile price moves over recent history - to treat this stock as more of a trade than as a firm long term investment. Investors have also proceeded with caution since the company's potential has yet to translate into profits, but deals such as this one with Dominion help to validate both the long term potential of the company and its technology, while also building a bridge towards profitability.
With stand-alone power systems independent of the grid becoming more and more appetizing to governments and corporations alike, 2013 could prove to be a milestone year for FuelCell. Investors should bear in mind, though, the volatility that is likely to continue until profitability is met.
In a sign of the fanfare surrounding the plant, a report circulated on Thursday morning that multiple entities have come on board to insure the milestone project.
Healthcare, Biotech, Pharmaceutical:
TrovaGene Kicks Off The New Year On A High Note
TrovaGene Inc (TROV), a company quickly gaining acclaim for its technology to detect various cancer types through simple urine tests, was one of 2012's big late-year winners, tripling in price in just a few months time while advancing its pipeline of cancer-detecting diagnostics towards the commercialization phases. Fueling the run was the fact that multiple of the company's diagnostics are slated for commercialization in 2013, the first of which - a diagnostic able to detect KRAS mutations through urine samples - is expected achieve that milestone this month. It also helped that Aegis Capital jumped on board and initiated coverage of the company with a 'Buy' rating.
Another avenue that has attracted interest to TrovaGene is the increasing amount of collaboration the company is conducting with outside entities. This trend was exemplified just before Christmas when TROV inked a deal with Genoptix and again on Thursday morning when it was reported the company had "entered into a clinical collaboration with The University of Texas MD Anderson Cancer Center to detect transrenal BRAF mutations in the urine of patients with advanced or metastatic cancers."
This collaboration has the potential to significantly broaden the scope of the types of cancers detected by the company's diagnostic technology and also highlights the interest by outside players.
These events join other collaborative efforts signed by the company and helps validate the widespread acceptance of the technology and also boosts TROV's potential as a merger and/or acquisition candidate later on down the road. TrovaGene is also capitalizing on a growing healthcare trend of exploiting less-invasive and less-expensive means of identifying and treating various cancers and disease types.
Volume and price remained relatively unchanged during Wednesday's run, but a continued news flow may draw attention to the stock during the current quarter, especially if commercialization goals are met on time. Shares look to have stabilized at right around the seven dollar mark after the quick run - and investors and traders alike will never complain about a triple. Bear in mind pullbacks could materialize following big moves in the sector, but this company has enough developing in its pipeline to maintain interest.
Amarin Flirts With Higher Prices, But Finishes Flat
Shares of Amarin Corporation (AMRN) modestly joined Wednesday's rally, but closed flat for the day following an afternoon stall. Volume was within norms, but trading over the past few sessions has indicated that shorts may have found the recent lows as an opportune time to cover, as mentioned in Wednesday's write-up. While no significant update was provided in terms of the pending commercial launch for Vascepa or the much-anticipated New Chemical Entity (NCE) decision, Amarin did announce during the day on Wednesday that CEO Joseph Zakrzewski would be presenting this coming Monday at the 31st Annual J.P. Morgan Healthcare Conference in California. Anytime the CEO speaks, investors get excited, as any hints of developing or pending events from Mr. Zakrzewski have been known to move the AMRN share price. Without a doubt investors will be keying in on any comments regarding buyout or partnership deals in relation to the NCE status. The last update provided indicated that the company was still exploring other strategic options while undertaking the go-it-alone launch and confirmation of such will likely be sought.
Having returned to the eight dollar mark, investors will also be looking for clues as to how fast the stock will or can return to double digits. Assuming no partnerships or buyout rumors materialize, a quick start over the first couple of quarters for Vascepa on the open market could help to achieve such a milestone. Vascepa is still expected by many to become a billion-dollar product and with as robust a sales force as has been put in place, a positive quarter or two that confirms more lofty goals will be met in the future could do the trick.
Over the shorter term, however, any renewed buyout talk and/or a positive decision on NCE may spark a near term rally to above ten. Already, speculation has Teva Pharmaceuticals (TEV), AstraZeneca (AZN) and Pfizer (PFE) all interested in Amarin's assets.
With attention already heavily following this story, investors will be looking towards Monday's presentation with anticipation.
Roundup: Foreign markets traded higher again on Thursday, setting the stage for a continued US rally, too. Again, there may be some profit taking along the way, but until the politicians start up again with their normal antics regarding the economy and negotiations, there's no reason why a little early-year rally can't continue for a bit longer, barring any unexpected bad news. If earnings start to roll in soft towards the end of the month, however, or if reality hits in terms of jobs, GDP or manufacturing data, then it could be another ho-hum quarter. For now, let's enjoy the ride.