Q4 2009 Earnings Call

February 16, 2010 5:00 pm ET

Q3 2009 Earnings Call Transcript

October 27, 2009 5:00 pm ET

Q2 2009 Earnings Call

July 28, 2009 5:00 pm ET

A few notes from the trading turret:

• Some of you want to know if I trade any of the stocks coming up on the Century Club scan based on MarketClub’s smart scanner. Sure I do. Last week, for example, I bought Ada-Es (ADES) and Vical (VICL). Both bucked the dismal market and barely stayed green.
  
• Highway Holdings (HIHO) is off about thirty cents since the last post, down very close to my entry point. I still like it, especially after HIHO declared a three cent dividend. If that becomes a quarterly event, the yield would be about 9%.
• One of my all-time best shorts was Zix Corp. (ZIXI) formerly known as Zixit. Lucky or right, I took this one down in the 80s in 2000, and rode it all the way to mid single-digits. I hadn’t given Zix a second thought since I covered in 2002, but was surprised to learn that Zix is almost profitable. Turns out that HIPAA and other regulations that all the Ziximaniacs thought would send Zix to the stratosphere are actually beginning to pay off. Put this one on the watch list.
• As right as I was on ZIXI, I was just as wrong on Star Scientific (STSI). After a court entered summary judgment against it, I thought Star Scientific was kaput. Oops. The court of appeals reversed and breathed new life into Star Scientific, allowing Star to take its patent infringement claims against Reynolds American (RAI) to trial. But Star couldn’t convince a jury that Reynolds actually infringed its tobacco curing patents. If Star doesn’t get a new trial, I don’t see how it can survive.
• Remember Escala, the stamp-trading and collectible company that fell to the pink sheets after the Spanish corporation that owned most of its shares was exposed in an international fraud? Escala is now Spectrum Group Int’l (SPGZ.PK), with operations in coin dealing, bullion trading and auctions. Spectrum Group seems to have put the past troubles behind it, but can’t seem to turn a profit. Guess those inflated stamp revenues are sorely missed.

DISCLOSURE: Long ADES, VICL, HIHO. No position in STSI, ZIXI, or SPGZ.

Below are new healthcare stock indexes I have created, revised, and tracked over the past few years which are now featured at a new website called Investars YOU. The new site includes automated index tracking and allows investors to create custom stock portfolios based on their individual preferences with the ability to invest real money by linking your brokerage account.

1. prescription skin care therapeutics;
2. medical devices, products, services, OR equipment for procedures which are intended to enhance appearance;
3. medical devices, products, services, OR equipment for use as joint replacements, tissue repair agents, tissue reconstruction agents, surgical adhesives, and cardiovascular procedures; and
4. regenerative medicine products, services, and/or an active clinical pipeline which seeks to restore or repair the functionality of lost or damaged organ, tissue, cellular, and genetic material.

1. derive either $500 million (USD) OR more than 50% of trailing 12-month revenues from the manufacture and sale of any type of generic (off-patent) prescription or over-the-counter (OTC) drug product intended for use by humans, including contract manufacturing services for drug products and biological agents;
2. have one or more compound(s) in active clinical development OR have a pending ANDA with the FDA for a generic drug candidate;
3. have received FDA approval for an abbreviated new drug application (ANDA) within the past 12 months.

1. the electronic transmission, storage, and processing of prescriptions (e-prescribing);
2. electronic storage and systems for healthcare facility operations and medical records; and
3. electronic systems, devices, and services for remote, real-time monitoring of patient health parameters (telemedicine).

1. human vaccines which are already on the market or in active clinical development;
2. diagnostics and lab services;
3. diabetes care; and
4. vitamins, health supplements, functional foods, and weight loss products or services.

Index components will be removed to reflect corporate events such as mergers and bankruptcies which result in de-listing of the underlying stocks.

by Brenon Daly

One conclusion to draw from the recent pickup in divestitures is that dividing corporate attention often means diluting corporate returns. Consider the situation at Zix Corp (ZIXI). The Dallas-based company has a small but growing business selling email encryption. In mid-2003, Zix moved into electronic prescriptions through its $1.5m acquisition of the assets of PocketScript. The plan was to expand its business of providing secure communications to the billions of prescriptions written every year in a less costly and more secure way.

Q1 2009 Earnings Call

April 28, 2009 at 5:00 pm ET

Zix Corporation (ZIXI) is a component in the ETF Innovators Global Health IT Index which offers email encryption and electronic prescribing (e-prescribing) solutions, with the latter poised to experience significant growth thanks to a Medicare incentive program that started this year to encourage prescribers to make the switch from handwritten scripts. The email encryption business accounted for about 81% of 2008 revenue with major clients including hospitals, health insurers, banks, credit unions, and other financial services companies (see here).

Last month, Zix Corporation reported 4Q08 and FY08 revenue of $7.2M and $28M, respectively, compared to $7M and $24.1M in the corresponding periods during 2007. ZIXI ended the year with cash/equivalents of $13.2M and posted a GAAP net loss for FY08 of $5.4M, compared to a loss of $8.1M in 2007. Zix Corporation has a market cap around $70M with zero debt and 63.3M shares of common stock outstanding.

Q4 2008 Earnings Call Transcript

February 17, 2009 at 5:00 am ET

As we enter 2009, and leave the carnage that was 2008 behind us, I recently wrote that now is a fantastic time to buy shares of companies you have been watching and where the fundamentals present an excellent risk/reward scenario.

A fresh start to the new year gives us all a chance to catch our breath and reexamine the allocation of our portfolios.

It’s been another incredible month for stocks, and especially for those on my watch list.

With rare exception, stocks of all shapes and sizes are getting pummeled and are presenting us with great buying opportunities for those with a long term investment horizon.

Both candidates in the upcoming election are bullish on Health IT spending as part of their healthcare reform proposals, with an estimated savings of $88B to the country over 10 years. However, details of these plans are lacking; although Obama's proposal would include a $50B investment in Health IT, divided evenly over a five-year period. The accompanying table (above, click to enlarge), presents an overview of the ETFI Global Health IT Index, which includes a total of 38 companies.

Trends in favor of Health IT include a push toward electronic prescribing (e-prescribing), reduction of paperwork, remote patient monitoring technologies, and plans by both candidates for significant investment in the industry. Zix Corp (ZIXI) and Allscripts (MDRX) provide e-prescribing technologies, which have pending legislation in the House and Senate to provide financial incentives to promote the adoption of the technology.

(click to enlarge)

The Lehman Brothers (LEH) failure last week will delay the merger of Allscripts (MDRX) with the healthcare info tech division of UK-based Misys (London: MSY), which is dependent on a $305M loan agreement to fund the majority of a $330M payment due to Allscripts from Misys.

Q2 2008 Earnings Call

July 29, 2008 5:00 pm ET

Q4 2007 Earnings Call.

February 19, 2008 5:00 pm ET

E-Prescribing is being introduced to busy physicians which enables them to prescribe a patient script directly from a hand-held device to a pharmacy. There appears to be numerous benefits to this practice. The service saves time and money while also minimizing the chance of prescribing errors. According to a company presentation, there were 1.5 million medication errors last year, which resulted in 7,000 deaths.

The service is being tested in pilot programs throughout the United States. One of the major advocates for E-Prescribing is the managed care industry. According to ZIXI management, several managed care plans including Aetna (AET) and Blue Cross/Blue Shield have helped roll out the pilot programs. The insurers also have elected to pay for the implementation, training and costs of the services for the physicians. The insurers are not altruistic. Instead, they receive cost savings because the system highlights particular preferred and generic drugs that the physician can prescribe.

The Microcap Speculator submits: One stock at the top of my watch list is Tumbleweed Communications (TMWD). Tumbleweed provides enterprise software that secures email and other communications. I first looked at Tumbleweed several years ago after a nice run shorting its competitor Zixit (ZIXI). I never took a position, but now TMWD is getting interesting on the long side.

Tumbleweed has now put together two cash flow positive quarters in a row, and after four years of reporting GAAP losses, seems to be on a trajectory towards GAAP profitability. TMWD just upgraded its corporate suite, bringing in Craig Brennan as president and CEO. Brennan previously was CEO of Brio, Inc., a business intelligence software company that was acquired by Hyperion. It provides security software to many top banks, healthcare institutions and, as of last month, the U.S. Marine Corps. In a recent interview, Brennan explained Tumbleweed's position within the industry: