At the conclusion of each week, VFC's Stock House examines some news items, stocks and stories that made headlines during the previous trading week, but may also make headlines or influence trends during the upcoming week as well. Although focusing intently on the biotech and healthcare sectors, due attention is also given to potential market-moving or game-changing companies in a broad variety of sectors and industries. The 'Weekly Stock Watch' will also introduce new companies for coverage and identify some stocks that may have entered 'buy territory'.
Last week was one that belonged to the traders, with quite a bit of downwards action in the markets peppered with a couple of big up days, too. Friday's fall, however - when the DOW dropped over one hundred and thirty points - could have set the tone for Monday's open.
In today's age of volatility, quick-breaking news and intense media hype all playing on the markets, we never really know what's coming next until we get there - which makes it a great trading environment, and also allows those who like to hold for the long term to average down on quite a few instances.
Some big players were making news last week and could do so even more during the coming week.
Google (GOOG) announced that the company will initiate a stock split to ensure company control by its founding members, news that sent shares down by four percent on Friday, while excitement over the Facebook (FB) IPO is also growing.
Some of the big banks were slipping towards the end of the week last week, with Bank of America (BAC) and Citi (C) dropping five and three percent, respectively, during Friday's trading. Any continued dip in either of those big boys could provide investors another chance to buy low(er) and trade into any potential rebounds - as has been the story for the banks over the past couple of years since the crash of 2008-09.
Even some of the little guys were making noise, and could continue to do so during the coming week.
Take Implant Sciences (IMSC.PK), for example. This company makes explosives and narcotics-detection devices that fit right into today's global increased security posture whose shares touched the dollar mark before settling back to close the week at ninety one cents. Implant won a key contract to provide security at the Summit of the Americas that took place over the weekend in Cartagena, Colombia, and the news was well received by investors.
It was also well received by US President Barak Obama's Secret Service security team.
Evidently these guys were so comfortable with Implant's ability to provide security that twelve members from the team decided to live it up like they worked for the GSA and ended up getting sent home for inappropriate behavior before the main event even started. Given the party atmosphere of the Cartagena night life, these guys must have really lived it up to reach the point of "inappropriate."
Regardless of the extra curricular events surrounding the conference, the contract win could be considered a big one for Implant Sciences, and many investors believe that there will be a lot more in store for the company and its share price this year.
Given the spike, consolidation and modest retreat of the IMSC share price last week, it'll be a stock to watch during the coming week as well.
On the big boy front, the Facebook (FB) IPO hype is starting to gain even more steam with the big day expected to come within weeks. Last week Facebook decided on the Nasdaq as its trading board of choice, but the company also completed the acquisition of Instagram, a photo-sharing network that had been picking up some quick popularity points in the mobile market, which happens to be the next arena into which Facebook is looking to infiltrate on a large scale.
Although the Facebook brass told investors not to get used to the company using its cash in the acquisition market, the company didn't waste any time by announcing the acquisition of Tagtile on Friday. Tagtile, another growing name in the mobile market, provides mobile apps that allows businesses to market to customers based on their purchasing activity, including the frequency of customer visits at a store.
Details surrounding the deal are not yet known, but the move is a sign that FB is not kidding around with all of its new found glory - as if that were ever a question.
Even the New York Mets were getting in on making some noise.
While the Knicks and Rangers were making game in their respective sports, the David Wright-less Mets dropped the Philadelphia Phillies in game one of a weekend set, a victory sparked by a homer from some guy trying to be Jason Bay. With Wright back in the lineup for game two, it was an easy 5-0 win...how ya like that, Phillie?
The coming week should certainly have its share of excitement.
We'll see how North Korea reacts after their failed missile launch; there's the cease-fire in Syria that is not really a cease-fire - at least not to anyone outside of the United Nations; and then there's Iran still issuing threats enough to keep oil prices inflated.
All this while the presidential campaign in the US heats up - can't we get at least a one week break from that?
Here's a few stocks and stories to keep an eye on this week...
Dendreon Corp (DNDN): Dendreon shares dropped by just about five percent on Friday as Citi updated its price target for the company to $10 - down from the previous target of $14 - citing growing competition over the next couple of years as cause for concern.
It's been a tough go of it for Dendreon since the landmark approval of Provenge a couple of years back, with pricing and reimbursement concerns severely dampening the initial high hopes of the historic immunotherapeutic prostate cancer treatment.
Despite all the negative press that this company has received since its stock price collapse of last summer, many are still banking on a rebound in Provenge sales, whether competition is a factor or not, and there is still some belief that the treatment will ultimately achieve the billion-dollar-blockbuster status that had previously been forecast.
It's also been true over this stock's recent past that any dips down to the range of eight or nine dollars have turned out to become solid buys, as even the most speculative of spikes could have DNDN right back at the ten dollar mark or above.
Management has also been highly cautious over the past couple of quarters, so any earnings increases that are slightly more than just modest could renew some investor confidence in the company.
If the market continues to dive, then it's quite possible that DNDN has some additional downside to come, but once again Dendreon is going to be a stock to watch for its rebound potential. Even Citi's new price target is more than ten percent higher than Friday's closing price; and although the traders tend to look for much higher gains than that, ten percent is not a bad trade in this day and age.
It's also worth noting that DNDN is not strictly a Provenge trade - there's a pipeline being built, too.
Human Genome Sciences (HGSI): Barely a week after trading at prices of higher than eight dollars, shares of Human Genome Sciences closed last week at just over seven bucks - not too far at all from the 52-week low of $6.51.
This has been another volatile player during the early-goings of 2012, with a short-lived run being taken over by downward pressure and short selling that has resulted in the current trading levels. With the market as a whole dropping, the shorts just have that much more of an opportunity to take advantage of this company's slagging numbers for Benlysta sales; numbers that - like Provenge for Dendreon - have thus far failed to meet early hype and predictions.
That said, Benlysta sales have been inching higher on a quarter-over-quarter basis and it's expected that they will start to pick up more significantly one the "trial period" applied on the drug by Doctors is complete. Being the first FDA-approved treatment for lupus in over fifty years, Benlysta has to do some convincing on the market before Doctors are going to become true believers.
The potential is there for HGSI to quickly rebound following the current market downturn, as this one is also prone to speculative price runs - especially on the roughly thrice-yearly buyout rumors that will surface regarding the company's partner from across the pond, GlaxoSmithKline (GSK).
Without a swift increase in Benlysta sales Human Genome is going to still be considered too risky for the more conservative investor, but the signs for a turnaround have been encouraging and HGSI could again be a nice buy while trading near its 52-week lows.
Even without the buyout speculation, this is one to keep an eye on; but you have to believe that if a buyout is going to take place, it's going to happen when the share price is depressed, not while it's trading near the highs.
Also of note last week, UBS initiated coverage of the company with a "neutral" rating.
Agenus, Inc. (AGEN): In a general downswing on Friday, Agenus, Inc. managed to weather the storm and came out on top for the day with a four percent price increase. AGEN had been running solidly over the opening months of the year, fueled mainly by an expanded agreement with GlaxoSmithKline (GSK) for the vaccine adjuvant QS-21 Stimulon.
AGEN's adjuvant is being used in multiple of GSK's late clinical stage vaccine candiates and the company will be due a modest royalty on sales should any of them make it to market.
What piqued investor interest regarding the expanded agreement with GSK was a 'first right of refusal' clause that gives Glaxo the opportunity to match any partnership or buyout deal for Agenus or certain of its properties. The clause immediately through the company on the radars of speculative investors identifying potential buyout candidates, although like Human Genome, it would be more reasonable to believe that if a buyout were to take place, it wouldn't occur while shares of the acquired company are trading near their recent highs.
Friday's upwards move in the midst of a broad market downturn was especially curious given the fact that a popular biotech blogger gave another not-so-positive opinion of the company in his weekly "mailbag" roundup that is issued most Fridays through the year. The AGEN share price did not respond to the comments, even in a day that saw just about the entire market take a dive.
Agenus also has Prophage in the pipeline as an immunotherapeutic treatment for glioma.
The recent strength has been encouraging, but the buyout speculation alone may not be enough for AGEN to sustain its recent price increases.
Mannkind Corp. (MNKD): Shares of Mannkind are trading at their 52-week lows and the company could be hanging out below the radar right now as the lull in news has investors disinterested. It's been over a year now since the FDA denied Afrezza, an inhaled insulin delivery for diabetics, and the shorts have taken well advantage of the stock while new trials are sorted out that will test Mannkind's next-generation inhaler.
The high short interest and high insider ownership still makes MNKD an intriguing play, and some shares picked up in this territory could come back to pay off should a speculative run materialize later in the year as news or rumors surrounding trial progress or potential approvals start circulating again.
In this sector, it's the ones that look to be forgotten about that could come back to pay the best rewards later on down the road, and MNKD might fit that bill right now. If Afrezza shows the same results as previous trials with the updated inhaler, then an approval is expected, although there are some concerns that it could falter on the open market due to the past failure of a similar product launch.
For diabetics, however, Mannkind's Afrezza and Generex's (GNBT.OB) Oral-lyn - should one or both ever make it to market - could offer an alternative to the needle.
Cowen & Co. initiated coverage of Mannkind last week with a rating of "neutral."
FuelCell Energy (FCEL) and Capstone Turbine (CPST): Both FuelCell and Capstone have experienced their share of downward share price pressure during the recent market downswing, but both continue to make moves in the green energy market that could have them primed for lucrative futures. Given the recent price slides that has shares back into the lower end of their respective trading ranges, these companies could be in buy territory and will be worth watching during the coming week.
A stock offering last month sent FCEL lower after having ran to the two dollar mark, but the company also announced a significant cash infusion from a Korean partner as well as a new Memorandum of Understanding Air Products (APD) to market tri-generation stationary fuel cell power plants.
Capstone, in turn, banked another foreign order earlier this month following up a solid performance last year of adding a significant amount of new orders for its low-emission, power generating microturbine units.
With both companies trading lower, they'll be stocks to watch this week. CPST, especially, usually doesn't hang out below a buck for long, although broad market behavior will dictate the timing of any potential rebound. FCEL may have some additional short term downside, but there's little doubt that the company could be positioned to be a player in the green energy generation.
Premier Alliance Group (PIMO.OB): Premier Alliance Group is a company that has recently realized significant growth and has also demonstrated the potential to bank even more growth during the coming months.
Premier provides advisory, consulting and resource services, as well as energy and sustainability solutions, to a wide range of companies of all sizes. Premier has a wide range expertise, to include the areas of Governance, Risk & Compliance (GRC), Business Performance & Technology, and Finance & Accounting, to name a few, and the company has secured numerous new contracts during the early months of 2012 that indicate a growing momentum that could lead to lucrative returns and share price appreciation.
In the key acquisition of GreenHouse, announced last month, Premier was quickly elevated to a leading player in the energy and sustainability consulting/advisory market. This could turn into a particular boon for business, as municipalities, state and federal agencies are all targeting energy efficiency as a way to trim costs and maintain budget predictions. The GreenHouse deal places Premier right in the middle of this emerging service need and has very positive implications on the company's short and mid term potential to realize significant growth.
Shortly after the deal was officially announced Premier landed another contract in Southern California relating to its GreenHouse division, and its portfolio of contracts also includes a one-of-a-kind contract with the Department of Defense for military base energy audits, according to information posted on the company's website.
Like every other business and government entity out there today, the DoD is also looking at energy efficiency on its bases as a way to cut costs, and this is an area where Premier has only touched the surface of its growth potential.
Premier also recently added Harvey Pitt, a former chairman of the SEC, to its board. Pitt's addition instantly lends credibility to the company as it seeks new customers and looks to make the leap into prime time.
More will follow this week regarding Premier at VFC's Stock House.
Siga Technologies (SIGA): SIGA shares dropped well below the three dollar mark on Friday, good for a near six percent downward move with no news being released to support the drop. Given the volatile market conditions, additional downside is possible, although this stock has proven over the recent months to be a nice trade if shares can be picked up near the lows.
Will be worth watching this week. Although the price drops are not uncommon, when SIGA moves higher, it tends to move quick.
Sunesis Pharmaceuticals (SNSS): The market might have been dropping around it, but SNSS spiked ten percent to the upside on heavy volume. Cantor Fitzgerald recently issued a buy rating on the stock with a price target of six bucks, to which at least some of this price spike can be attributed, but a new partnership announced a couple of weeks ago initially sparked the renewed interest. Sunesis has already returned bank for investors over the past couple of weeks and remains one on the 'hot list' to watch.
Celsius Holdings (CELH.PK) nice late-week volume and holding strong in the midst of market downturn...Amylin Pharmaceuticals (AMLN) dropping after Icahn lawsuit...Illumina Inc (ILMN) drops five percent when Roche does not up its bid...Nuvo Research (NRIFF.PK) FDA date pending, approval largely expected...Titan Pharmaceuticals (TTNP.OB) no signs of quick recovery after last week's drop.