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'.
Some solid earnings reports last week by a few key players made for an overall decent week for the markets last week, and with earnings again set to dominate the scene during the coming week, it's likely that the markets will once again follow the results.
On the heels of a strong earnings report and more than double the average volume, shares of Microsoft (MSFT) soared by nearly five percent on Friday and have positioned the stock as one to watch during the coming week following the exciting close of Friday.
Although some analysts predicted a week quarter for McDonald's (MCD), the company surprised and posted solid results, also a factor in Friday's strong showing for the markets. The same can be said for General Electric (GE), whose numbers beat the general consensus, although revenue was down.
Those three key players will be all but forgotten next week, however, when a slew of new earnings reports will dominate the headlines making last week's players over-the-hill, old news.
All eyes are going to be on Apple (AAPL) during the coming week, with the tech behemoth set to report earnings on Tuesday afternoon. Although AAPL shares have been on the slide over the past couple of weeks, dropping a good ten percent during that time frame, most predict another quarter of huge growth that could once again propel shares to over the six hundred dollar mark. There are naysayers, though, that believe the best days of Apple may already be in the rear view mirror, even with the prospects of Apple TV set to hit the markets later this year.
Whatever this company brings to the table on Tuesday will most likely dictate the sentiment of trading on Wednesday morning.
It could be that Apple is THE story to watch during the coming week.
Other big players set to report are Amazon (AMZN), Exxon (XOM) and Starbucks (SBUX), who made some noise over the weekend by informing customers that it will no longer used crushed beetles for coloring in its products.
Now that's nasty, who would have thought that you were drinking crushed beetles with your Strawberry Frappe?
Also this week the Fed will be reporting, another potential market-moving event, and attention may swing back to Europe where the French presidential elections will be in full swing and the United Nations will continue to prove its futility in Syria.
The sentiment is upbeat after a solid week last week following a shaky opening to the new quarter, but the possibility of a summer swoon still exists after the spiking numbers of the first quarter.
With a whole lot of earnings and information on the plate during the coming week, it's sure to be an exciting one for the business news junkies.
Here's a few stocks and stories to watch...
Human Genome Sciences (HGSI): Human Genome Sciences (HGSI), a company whose stock started to look quite attractive as it had been slid lower over the past few weeks, became one of last week's brightest success stories after partner GlaxoSmithKline (GSK) finally came through with a de-facto buyout offer after years of investor and media speculation on the issue.
Human Genome quickly rejected the roughly $2.6 billion offer and it's likely that more will be said on the topic during the company's planned conference call expected to take place this week.
HGSI doubled on the news and if it looks like a higher offer is going to be made by Glaxo, or even by another big player who might join the circus, then another spike in price could be in store, although it's highly likely that the best gains have already been seen, for the time being.
The immediate rejection of Glaxo's offer should have come as no surprise, given the trend of other high-profile rejections in the sector over the past weeks. Illumina Inc. (ILMN), for example, rejected two offers from Roche Holding AG (RHHBY), one for $44.50/share and the other for $51/share, and Amylin Pharmaceuticals (ALMN) turned away Bristol-Myers Squibb Company (BMY) on a $3.5 billion, $22/share offer.
Needless to say, the buyout bug has bitten in the pharmaceuticals sector. The late-week HGSI/Glaxo news makes this a hot story to watch during the coming week.
Capstone Turbine (CPST): Shares of Capstone Turbine (CPST) were in the rallying mood late last week after a Thursday afternoon appearance by President and CEO Darren Jamison on CNBC's "Fast Money" program drew increased awareness and interest to the company and its low-emission microturbine units.
Mr. Jamison did not announce anything that was not already public knowledge, but segment highlighted Capstone as a company that is primed to take advantage of the low prices of natural gas - the fuel of choice in powering its low-emission microturbine units.
Capstone also secured a large order last week for another 30 units destined for the Eagle-Ford Shale Play in the United States.
Last year CPST ran to over two dollars after a mention in a speech by US President Barak Obama in Brazil, and the early results for the post-CNBC appearance are encouraging for a rebound in CPST shares, which had dipped below the dollar mark at points over the past couple of weeks.
Volume was swiftly moving in during the last two days of last week, with well more than twice the daily norm taking part in Friday's price spike.
Short interest is still heavy with over 14% of shares short, which could weigh heavily on the potential for a trend reversal, but it could lead to a quicker move higher if those shorts start to cover en-masse.
Worth watching during the coming week.
Synergy Pharmaceuticals (SGYP): The strongest-volumed day in a couple of weeks supported a two percent price increase on Friday for shares of Synergy Pharmaceuticals (SGYP), a company that has been gaining increasingly positive coverage from analysts over the past couple of months.
Last week's modest move higher saw SGYP shares trading at levels not seen since early March.
Given that the halfway point has just recently been met for enrollment in an ongoing Phase II/III trial for lead product candidate, Plecanatide, which would enter into a multi-billion dollar market if approved, interest could start increasing in the company which may enable the share price to approach the enthusiastic estimates of analysts.
Summer Street has initiated coverage with a price target of $9, Brean Murray's most recent rating is accompanied by a price tag of $13, and just a couple of weeks ago Roth Capital threw its own prediction into the mix with a price target of $12.
The point of full enrollment for the Plecanatide trial is expected to take place in the third quarter of this year with top line results due in the fourth quarter. It is expected that results will turn out in the company's favor, given the relationship between Plecanatide and its to-be competition on the market, Linaclotide, a product developed by Ironwood Pharmaceuticals (IRWD) that shares origins with Plecanatide.
Although trailing in the race to commercialization, Plecanatide may ultimately prove to be the treatment of choice over Linaclotide, since Ironwood's product has demonstrated in trials to cause sometimes-severe cases of diarrhea with treatment, while Synergy's product has not demonstrated any side effects at all, to date.
With new analyst coverage providing a boost in volume and interest, SGYP will be a stock to watch for the coming week, and beyond.
McDonald's Corp (MCD): The earnings report for McDonald's last week was in line with expectations, a nice surprise as some had predicted that the struggling economy in Europe would hurt MCD's prospects of meeting expectations here on the home front.
Although spiking to nearly ninety eight dollars on the news, shares trickled back during the day on Friday and settled in at just under the ninety six dollar mark.
European numbers were stronger than expected and the company is continuing a push into Asia that should fuel further international growth.
Having slipped from its hundred dollar prices of earlier in the year, McDonald's continues to demonstrate its long term powerhouse potential and could be a nice long term buy if it dips much lower.
Geron Corp. (GERN): It might be time to throw Geron (GERN) back on the watch list. Months after announcing that - due to limited monetary resources - the company would discontinue the development of its stem cell line in the treatment of patients with spinal cord injuries (SCI), Geron has quietly been moving higher over the past few weeks and realized a five percent price spike on Friday with volume well above the daily norm.
Having left the active field of developing stem cell treatments, Geron should now be considered as an investment for its developmental cancer treatments, although there is still significant value in its stem cell line, if considering partnership or buyout potential.
Given the string of buyout propositions in the sector over the past couple of months, it's certainly worth throwing Geron on the list of potential acquisition targets, since a big player could have the company for relatively nothing, compared to the free cash flows of the big boys of the sector.
The recent price movement has GERN as one to watch again.
Advanced Cell Technology (ACTC.OB): Advanced Cell Tech's (ACTC.OB) pending reverse stock split may be dominating investor speculation these days, but the company is also making progress on its clinical trials, too.
Over the week the company announced that the second and third patients were treated in the ongoing dry age-related macular degeneration (dry AMD) Phase I/II trial that is testing the company's retinal pigment epithelial (RPE) line of cells for effectiveness.
When Geron bowed out of the stem cell field last year, ACT became the arguable leader in the field of developmental stem cell therapies and increased attention is going to be on the company as the April 26th shareholder meeting draws nearer, where a final decision on the reverse split will be rendered.
Amarin Pharmaceuticals (AMRN): Proving to be quite the trader's dream through the early months of 2012, Amarin kept that pattern with a near ten percent price spike on Friday that put shares solidly over the ten dollar mark again.
Amarin is another one worth watching for its buyout potential, as lead product AMR-101 has proven highly successful in trials and a deep-pocketed partner could potentially commercialize the product with a speed and efficiency that Amarin might not be able to match on its own.
Positive patent news led to a similar run last month.
Given Friday's action, AMRN will be a stock to watch during the coming week.
Titan Pharmaceuticals (TTNP.OB) is still one to watch for its buyout or partnership potential, recent stock offering and price dip aside. Like HGSI - which was trading near its 52-week lows when the Glaxo offer came - the recent price decline makes the company that much more attractive to a potential buyer...Dendreon (DNDN) trading up over the last two trading sessions of last week to put the share price back over the ten dollar mark...Cytosorbents Corporation (CTSO) receives European trademark for CytoSorb...Spectrum Pharmaceuticals (SPPI) back over the ten dollar mark...Siga Technologies (SIGA) flirting with three again...Immunocellular Therapeutics (IMUC.OB) holding strong at current prices...FuelCell Energy (FCEL) up five percent on Friday...Disney (DIS) studio boss leaves after 'John Carter' bombs - it might have helped if anyone knew who John Carter was before the movie came out. Chances are 'The Avengers' will fare much better...BioDelivery Sciences (BDSI) up another five percent Friday.