With the DOW breaking 9,000 this morning and adjusting everybody's trading psychology, several Small Cap stocks shot out of the gate this morning in early trading. Medarex (MEDX), Affymetrix (AFFX) and Center Financial (CLFC) all posted big gains on good news.
The biggest news in the Small Caps markets today came from late yesterday's affirmation that Big Cap Bristol-Myers (NYSE:BMY) was swallowing up Small Cap Medarex, Inc., (MEDX) http://www.medarex.com/ through an acquisition.
That sent MEDX stock up over 88% ($7.47) this morning in early trading. MEDX is currently trading on the Nasdaq in the $15 range with a new market cap of $2.04 billion. The 3-Month average daily trading volume of MEDX is 2,318,390 shares but by noon EST today, the volume surpassed 55,293,669 shares.
MEDX is a bio-pharma company that focuses on human antibody-based therapeutic products to treat cancer, inflammation, autoimmune disorders and other life-threatening and debilitating diseases.
The MEDX pipeline was a clear incentive to BMY: One drug in Phase III Trials; four drugs in Phase II Trials; and seven drugs in Phase I Trails.
For those of you waiting for any slight dip to get in, at $15, MEDX is well past its 52-week high of $10.12 set on 08-01-08 and far above its 52-week week low of $3.40 set on 03-02-09. At $15, MEDX is above both its 50-day and 200-day moving averages. MEDX (like most development companies) had little in the way of revenues. MEDX shares out versus float are at parity.
A big Small Cap gainer in the Healthcare sector that isn't being acquired (as of this writing) and led pre-market volume trading this morning is Affymetrix Inc., (AFFX) http://www.affymetrix.com/ now trading on the Nasdaq in the $7.75 range. AFFX had picked up 31.46% ($1.85) by noon EST to set a new market cap of $547 million. AFFX has a 3-Month average daily trading volume of 995,772 shares and had quadrupled that by noon to over 4,035,861 shares traded.
The cause of the jump is AFFX's second quarter numbers (and a Neutral to Overweight upgrade at Piper Jaffray didn't hurt either).
Management at AFFX has been buying back debt and that really sweetened the pot. Also the fact that analysts were expecting a nickel a share in earnings; AFFX posted 11 cents a share. AFFX earned $7.3 million compared with a $3.6 million loss during the same quarter in 2008. Even though revenues fell 6%, buyers hardly noticed this morning.
AFFX makes and sells consumables and systems for genetic analysis in the life sciences and clinical healthcare markets. The AFFX primary product is 'GeneChip', a microarray platform that includes disposable DNA probe arrays (chips) consisting of nucleic acid sequences, certain reagents for use with the probe arrays, a scanner and other instruments used to process the probe arrays.
At $7.75, AFFX is below its 52-week high of $10.99 set on 07-23-08 and is well above its 52-week low of $1.78 set on 03-09-09 (a good buy signal). At $7.75, AFFX is well above both its 50-day and 200-day moving averages. AFFX has trailing twelve month revenues of $319 million and its shares out versus float ratio is near-parity.
Another gainer this morning on the Nasdaq is community bank Center Financial (CLFC) http://www.centerbank.com/ currently trading in the $2.95 range. CLFC picked up over 21% ($0.61) to set a new market cap of $49 million. CLFC has a 3-Month average daily trading volume of 78,926 shares and easily doubled that to 190,395 shares traded by noon EST.
APPLYING THE STRESS TEST
CLFC reported its second quarter earnings today for the period ending June 30 and its loan loss provisioning and net charge-offs to improve its credit standing are seen by investors as not only prudent, but forward-thinking. CLFC management also noted that the Company had completed its annual internal portfolio analysis during the second quarter, after expanding the application of the stress test to 100% of its loan portfolio. Bravo. That's the spirit. CLFC remains strongly capitalized with a total risk-based capital ratio of 12.76% at the close of its second quarter.
For me, the highlight of CLFC Q2 filing was: total deposits increased sharply to $1.85 billion at June 30, 2009 from $1.66 billion at March 31, 2009 and at June 30, 2008. People believe in CLFC.
CLFC is the bank holding company of Center Bank, a community bank that serves small and medium sized Korean-American businesses, professionals, and other individuals in Los Angeles metropolitan area, including Los Angeles, Orange, San Bernardino, and San Diego counties. As of March 30, 2009, it operated 19 full-service branches and 1 loan production office.
At $2.95, CLFC is far, far below its 52-week high of $14.84 set on 09-09-08 and just slightly above its 52-week low of $2.15 (another good buy signal). At $2.95, CLFC is above its 50-day moving average and below its 200-day moving average. CLFC has trailing twelve month revenues of $38.5 million and its shares out versus float ratio is near-parity.