Readers Ask: AdventRX. Fannie Mae, Freddie Mac, EpiCept

In response to a number of requests that I've received via email or comments asking for 'VFC's Take' on numerous stocks that readers of have found, I'll do my best to address as many as I can, as long as everyone takes a few things into account while reading:

- I have not thoroughly researched all of the stocks that I'm about to comment on. I've done the initial DD but my opinions are mostly based on my first impressions of the stock. I'm merely providing VFC's Take, as requested. Use that as a starting point to do your own DD.

- Don't get testy if I don't like your stock. Remember, this is just my initial impression and I take into consideration some variables that other people don't, that's why VFC's Take is not always the mainstream impression.

- I appreciate all the recent feedback, and keep the stock tips coming; this is a great forum for all investors of all levels to share tips and insights. There's a whole lot of stocks out there, but there's only a few gems. Let's keep trying to find those gems.

ANX: AdventRX Pharmaceuticals:

A comment from Lenny in sunny Australia:

Hope you are having a relaxing weekend! Melbourne Australia is a lovely place, and considering it is middle of winter yet has temperatures of around 50-60 Fahrenheit, who can complain? While having a drink I made a toast to your health! (-:

If you get a chance, can you please have a look at ANX? It has a market cap under 20 million with no debt, appears to be 'under the radar', and has an interesting product (it does not appear to be a '1 trick pony'). It is a product reformulation (which may reduce its risk?) and looks to have benefits over what is being currently used in chemo.

Let us know when you get a chance.

Tks!

Lenny

Thanks for the toast, Lenny. Much appreciated. I've never hit Melbourne myself and you can't complain about weather like that in the "middle of winter!" Enjoy!

VFC's Take: About a month ago I responded to another inquiry regarding ANX and I will maintain my stance that it is a decent speculative buy for the reasons listed above by Lenny. I do believe that the company is still trading somewhat 'below the radar,' but also note the increasing volume of late.

The time for getting in may be slowly disappearing as the stock has risen to twenty cents from fourteen cents in just over a few weeks. It should go higher as the date for the NDA submission for ANX-530, scheduled to take place by the end of this year, approaches.

However, with ANX-530 being a reformulation of an existing product, I'd be a bit weary of long term viability unless it brings something significantly new to the table. That being said, the market cap is fairly small, in my opinion, and could at least double leading into the NDA filing.

Personally, I'd treat this stock as a mid term trade vice a long term hold - for now; definitely worth buying a few shares and seeing what happens, in my opinion.

Disclosure: VFC is long ANX.


SPNG.OB Spongetech, FNM Fannie Mae, FRE Freddie Mac:

From Pixie:

Woo hoo, go SPNG! Suddenly I realize SPNG is everywhere. I caught their ads on WETA Kids, Nickelodeon and CNBC recently. Ever since she saw the ad, my daughter's been pestering me to buy this cool Spongebob sponge. Should I be the frugal mom or help the stock by shelling out 14 bucks? LOL.

What's your take on FNM and FRE, both of which rebounded some, though nothing on the lines of AIG...

Thanks much!
Pixie

VFC's Take: Regarding SPNG, the company is going all out on the marketing front. Quite simply - the marketing will translate into nice sales numbers and handsomely reward shareholders or it will fruitlessly eat into existing cash and burn the company into the ground if the full fledged marketing attack does not translate into revenue.

Keep in mind that if the current marketing blitz does NOT translate into big sales, then a reverse split may be in order. If that occurs, I'd add shares on any dip post-split.

For the time being, I can support an argument for continued buying at twenty cents.

FNM, FRE: An eventual rebound is likely from both, but these companies are extreme messes and too closely associated with the federal government for me to feel comfortable putting my money in there.

Rebound stories are everywhere and I'd personally look elsewhere before considering these two as safe investments, although keep in mind I said the same thing about AIG - so do your own DD and invest accordingly.

Disclosure: Long SPNG, no position FRM, FNE.

EPCT: EpiCept Corp.

From an anonymous poster:

Did you get out of EPCT? You have indicated a few times that you have been considering getting out.

VFC's Take: It's true that I've been considering getting out of EPCT for some time, but I've also stated that I'm going to hold on until the next update on Azixa is released.

Azixa, a treatment for brain cancer, is partnered with Myriad and positive updates on that drug candidate have launched the EPCT stock price to over four dollars in the past.

I haven't completely written off Ceplene yet, but the lack of relevant news regarding a European partner is somewhat troubling and I'm not going to bank the future of my EPCT investment on that product.

EPCT still holds quite a bit of potential, in my opinion, and I'm still in - for the time being.

Disclosure: VFC is long EPCT.

Comments

[Nära:]

An important indication for whether or not EPCT will have a hard time getting a partner for Ceplene in Europe, is the fact that EMEA recently ranked Ceplene first among "the 12 products [of 66 approved 2008] which are expected to confer major public health benefits". This gives a good idea about how Ceplene is judged by those who understand this question best. It seems perfectly clear that Ceplene is one of the absolutely most interesting products on the market right now, and we all know how intense Big Pharma need such products to put all their money in.

www.mednous.com/news/a...

Nära

Sep 01 05:37 PM

[VFC's Stock...:]

Nara,

Agree with what you are saying and usually I'm a believer that good product will eventually superceed poor management, but in this case I'm starting to lose doubt.

Bitty Mack,

Noted - good stuff for SPNG.

Glad I got in, to tell you the truth.

VFC

Sep 01 06:31 PM

[harvard hom...:]

Only the functionally innumerate can justify paying anything north of 1x tangible book value for Spongetech, which works out to something just below $0.03 per share, or about one-seventh the current stock price.

This company is an outright scam. Anyone who's ever taken Intermediate Accounting or better can walk you through the smoke and mirrors accounting -- huge increases in Accounts Receivable with NO provision for uncollectible accounts; huge reported foreign sales of sponges that retail in the U.S. for $9.95 each in places like Russia and South America which are impossible to confirm or, for that matter, to find; a statement of cash flow from operations that is clearly non-GAAP compliant (it includes the proceeds from stock sales, which are noted, but are still included to fool the innumerate); and so on.

And needless to say, back out all the accounting garbage and the company is cash flow negative from operations big time ($9.9 Million for the nine months ending Feb 28 2009) and is also free cash flow negative as well. Meanwhile, the corporate execs use the company treasury like it's their own little piggy bank to sell stock to themselves at discounts of 40% or more from the prevailing market prices.

MEMO TO SEEKING ALPHA: Please get these shills off your site, since it degrades the content of what you do, not to mention the fact that you really don't need your reputation tainted by subsidizing, underwriting and promoting securities fraud.

Sooner or later this one implodes and zeroes out, and the sooner the better.

harvard homeboy

Sep 01 06:32 PM

[VFC's Stock...:]

Harvard Homeboy,

Appreciate your thoughts on SPNG, although SPNG is a speculative stock. People will speculate on speculative stocks and many believe that there's some money to be had on speculating with SPNG - I tend to agree.

For those that bought just three weeks ago and are sitting on 35% gains - they'll especially agree that SPNG is worth the speculation.

Thanks for the input.

VFC

Sep 01 07:30 PM

[wcorowitz:]

how did harvard homeboy get all those details, we are still waiting for the 10-k

Sep 01 10:34 PM

[freemarkets...:]

Harvard Homeboy,

So strange to see you all over the internet bashing this stock. For a while I thought you only contaminated the investor hub board, but I see you have decided to spread your lies around the internet.

You really should take No_BS's advice and take an accounting class. You are incredibly good at bending the truth to slander this stock, but the market will ultimately decide the PPS, and you will see that you are wrong. Sadly, as you are probably part of the NSS crew (that's been confirmed by Reg SHO), you're going to lose a ton of money as well.

But of course, good luck to you. Lie all you want, the market will determine the PPS, and not you.

FreeMarkets4Ever

Sep 02 03:35 PM

[harvard hom...:]

freemarkets,

You're right. I don't bother posting much on the I-Hub site primarily because it's an obvious site for shills and lightweights who like waving the pompoms, like you and No BS. As I might have mentioned there, I was limited to five posts per day in any case and, of those, typically three would end up being deleted.

So, in a sense, why bother.

And if you think No BS is some kind of accounting guru, then I guess you'd be really impressed by the Cliff Notes version of Cash Flow Analysis for Dummies, which he likes to plaigarize.

I've said it before and I'll say it again: there are two kinds of companies in the world -- those that are cash flow positive (net generators of cash) and those that are cash flow negative (net consumers of cash).

Spongetech falls into the latter category and the amount of cash SPNG consumes is increasing, which sooner or later is going to make for a really ugly scenario for the longs.

Of course, it's entirely possible that the pornographers promoting this stock, like your business partner Moskowitz, may be able to manipulate the stock price higher by paying yet more shills to sit around at computer keyboards posting insightful commentary like "To Da MOON", which is comparable to the degree of accounting heft incorporated into the average post of guys like No BS and others on the board of shills you're referencing.

And my short position in this pos, money-losing, cash flow negative, mom-and-pop, pump-and-dump scam is working out just fine, thanks.

hh

Sep 03 12:23 PM