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Yesterday's Most Purchased (and why): BEHL, HURN, NVAX, ANDS

|Includes:Anadys Pharmaceuticals, Inc. (ANDS), HURN, NVAX

BioCentric Energy Holdings, Huron Consulting Group, Novavax, and Anadys Pharmaceuticals were all the rage on Tuesday.

By James E Brumley

Tuesday was, shall we say 'interesting', in terms of which names small and micro cap investors were clamoring for.... we saw a lot of ill-advised bottom fishing. The most purchased (net) stocks from the non-large cap world were BioCentric Energy Holdings, Inc. (OTC:BEHL), Huron Consulting Group Inc. (NASDAQ:HURN), Novavax, Inc. (NASDAQ:NVAX), and Anadys Pharmaceuticals Inc. (NASDAQ:ANDS). Here's a closer look at what's going on with each.

The only pink sheet of the four names we're reviewing today, BioCentric Energy Holdings, Inc. (BEHL) was likely plowed into by a small army of second-chancers... traders who regretted not participating in the initial run from $0.007 to $0.155 (+2000%), and who assume that uptrend will last forever.

What those traders may not have realized is that it was professional's profit-taking sending the stock lower after BEHL opened with a blowoff top on Tuesday. It's going to be incredibly difficult for BioCentric Energy to muster that kind of buying again.

Don't misunderstand - BioCentric Energy is for real (it turns algae into ethanol). It's just that a stock can only gain so much before investors become too hesitant to step in again. That's likely the reason why BEHL is stalling now; the remaining stragglers aren't seeing shares supported by bigger players.

It's not hard to find some buyers following any 68% plunge - the law of odds and averages says there's apt to be some kind of dead cat bounce. That's about the only reason Huron Consulting Group Inc. (HURN) was in demand yesterday though.

The stock's destruction was the result of an accounting scandal that came to light over the weekend. The company is believed to have misreported costs related to acquisitions. The irony? Most of the staff at Huron - including key management - were formerly of Arthur Anderson... the accounting firm that made some really bad decisions with its Enron account in 2002.

In all truthfulness, stepping into a little Huron position may not have been totally crazy. It's totally speculative, but not totally crazy. Chances are that the absolute worst-case scenario was instantly priced into the stock post-news. It may be a while before all the dust settles, but there could be a little upside here.

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Whoever was buying Novavax, Inc. (NVAX) yesterday at what looked like a short-term top must have been clairvoyant - the stock gapped up even further today on news that the company has an H1N1 swine flu vaccine ready to mass produce.

While we applaud the success and the fact that Novavax's vaccine technology can produce vaccines much faster than the more common chicken egg method, we also suggest traders take at least partial profits on NVAX trades now.

Why? What news is left that could really top this? The WHO may announce that Novavax is the sole approved-provider of a swine flu vaccine, but anything short of that miracle is going to pale in comparison.

We're not saying the stock won't regroup and move higher again on real news of success TBD later. It's just a little over-extended now.  

Finally, Anadys Pharmaceuticals Inc. (ANDS) was in demand yesterday on no news whatsoever. Though it closed lower, the buying effort ramped up as the stock approached lows for the day.

The inflow was probably from traders who missed out on Friday's pop from $1.80 to $2.60. Once shares reached a low of $2.31, the bulls waiting in the wings flinched, assuming the ANDS intra-day pullback was only temporary following the breakout move from late last week.

In the grand scheme of things, however, Tuesday's buyers got excited over nothing. The stock's up a little today, but there's no uptrend or breakout materializing.

Just so you know, the jump was sparked by the FDA'a approval of Anadys' design for a study of its hepatitis C treatment ANA598. It's still only in trial phases though, and the next big data milestone isn't expected to be reached until late this year or early next year. ANDS shares are fading as investors figure this out.

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