Companies featured in this edition of the newsletter: CUR, CVM, DKAM, ICLK, IMUC, IWEB, OMCM, ONEZ, SVUL, TAGS
Markets managed to extend their run this week, hitting fresh highs for â€˜09 despite coming under pressure from negative economic reports and a significant two week correction in Chinese equity markets. All told, the Dow ended up 2.0%, gaining 184 points to close at 9505, extending its yearly gains to 8.3%. The Nasdaq finished the week up 1.8%, closing back above 2000 at 2020, up 28.1% on the year, while the S&P 500 and Russell 2000 managed to post gains of 2.2% and 3.1% respectively, bringing their yearly gains to 13.6% and 16.4%.
Concerns stemming from weakness in Chinese markets which have surrendered 20% in the past two weeks after climbing 109% from October lows spooked many investors expecting a similar correction in US markets early in the week. US markets demonstrated their resiliency however, reversing a decline on Monday to close in positive territory for the week and allay the fears of many expecting a correction similar to those demonstrated in China. Buyers stepped in again on Wednesday to reverse opening declines and stocks surges higher despite the lack of any significant catalyst; by the end of trading Friday, all ten sectors of the S&P were in positive territory on the week despite the absence of any major market moving developments.
Bullish sentiment remained strong on the week, as even negative economic developments were discounted. Larger than expected declines in housing and employment data were largely shrugged off, as July Housing Starts came in at 585,000 versus expectations for 599,000 and building permits dropped more precipitously than expected, coming in at 560,000, against expectations for 577,000. Poor jobs numbers were also largely overlooked, as weekly initial claims came in at 576,000, well above estimates of 551,000. The only piece of economic news that investors seemed to trade on this week was the announcement on Friday that Existing Home Sales were up by significantly more than expected, coming in at 5.24 million versus expectations for 5.0 million, which led to a 1.9% gain in the S&P following the news.
What should investors look for this week? Earnings will be light again with the majority of companies with market moving potential having already reported, but look for reports from Burger King (NYSE: BKC), Medtronic (NYSE: MDT), Staples (NASDAQ: SPLS) and Sun Microsystems (NASDAQ: JAVA) Tuesday before the bell. Also keep a look out for reports from home builder Toll Brothers (NYSE: TOL) Thursday morning and Dell (NASDAQ: DELL) after the close that same day.
Economic releases for the week begin with the S&P Case-Shiller Home Price Index for June at 9:00am Tuesday, followed by Consumer Confidence for August at 10:00am. On Wednesday, look for Durable Orders for July at 8:30am, followed by New Home Sales for July at 10:00am. Weekly initial jobless claims, weekly crude inventories, Preliminary Q2 GDP, Q2 GDP Deflator and Q2 Core PCE will all be released together at 8:30am Thursday. Friday morning Personal Income and Spending for July will be released with PCE Core, also for July, at 8:30am, followed at 9:55am by revised Michigan Sentiment for August.
Conference schedules will be light again this week, but look for the Piper Jaffray Semiconductor Summit in Chicago, beginning on Tuesday. Jefferies & Co. will hostan investor conference in New York from Tuesday through Thursday, while Medtronic will hold its annual shareholder meeting in Minneapolis on Thursday.
Tarrant Apparel Group (NASDAQ: TAGS), a design and sourcing company for private label and private brand casual apparel, announced last week that its shareholders have approved the proposed merger between Tarrant, Sunrise Acquisition Company, LLC, and Sunrise Merger Company. The proposition was approved by 74% of the companyâ€™s outstanding shares; under the terms of the agreement, all of the outstanding shares of common stock of Tarrant, other than shares held by Sunrise Acquisition Company, LLC and two controlling shareholders will be acquired for $0.85 per share in cash. Shares remained unchanged on the week at $0.84.
Neuralstem (AMEX: CUR), a company targeting major central nervous system diseases using neural stem cells of the human brain and spinal cord, announced last week that its compliance plan to remain listed on the NYSE AMEX exchange has been accepted and the company has been granted an extension until December 6, 2010 to become compliant. Shares lost eight cents on the week to close at $1.09.
CEL-SCI Corporation (AMEX: CVM), a late stage cancer immunotherapy company and vaccine developer, announced last week that it has entered into a definitive agreement with several institutional investors to sell 9.7 million units -with each unit consisting of one of the company’s common shares and 0.50 warrants to purchase one share of common stock- for gross proceeds of approximately $4.4 million. The investors have agreed to purchase the units at a purchase price of $0.45 per unit, with warrants, representing the right to acquire 4.85 million common shares, exercisable at any time on or after February 20, 2010 and prior to the 5-year anniversary of the closing of the transaction at an exercise price of $0.55 per share. The transaction is expected to close on or about August 25, 2009, subject to satisfaction of customary closing conditions. In other news last week, the company announced that it has expanded the scope of its work towards creating a novel treatment and vaccination against the current H1N1 virus, as well as future mutations. The companyâ€™s scientists believe that the combination of various non-changing regions on the virus in one treatment or vaccine will allow for a greater ability to treat and protect against the current H1N1 virus and any possible future mutation. CEL-SCI currently has two on-going research programs directed towards the H1N1 virus; the first is directed against a future mutated form of the virus while the second aims to treat those already infected with the current strain of the virus. The company has indicated that it expects to provide an update on its operations regarding the current form of the virus within the next month. Shares lost a penny on the week to close at $0.45.
Drinks Americas Holdings (OTCBB: DKAM), a company that develops, owns, markets, and nationally distributes alcoholic and non-alcoholic premium beverages associated with renowned iconic celebrities, announced last week that it has entered into a definitive financing agreement, which could raise $5 million, from which the proceeds will be used to fund operations and working capital needs. Based on the terms, certain market conditions and thresholds of the investment, the company may drawdown funds from the investor through the issuance of Series B Preferred Stock and five year warrants exercisable for shares of the companyâ€™s common stock having a value of 135% of the drawdown amount. Management is pleased to have completed the transaction and plans to use the funds to finance production of current brands and provide the capital needed to launch Kid Rockâ€™s â€˜American Badass Beerâ€™, which is off to a very strong start in Michigan, its first launch market. In other news last week, the company announced that it has entered into a distribution agreement with Golden State beverage, a newly formed wine and spirits distribution and marketing company operating in California. Golden State Beverage has formalized a deal with Drinks Americas Holdings to take on the distribution of such high profile brands as award winning TrumpÂ® Super Premium Vodka, TrumpÂ® Premium Flavored Vodkas, Willie Nelson’s Old Whiskey River Bourbon, Olifant Premium Vodka from Holland and Damiana Liqueur from Mexico. Shares lost half a cent on the week to close at $0.125.
interCLICK (OTCBB: ICLK), a leading ad network, announced last week that it has joined the BlueKai Premier Partner Program. BlueKai is the online industry’s first intent-focused data exchange and online marketing’s largest source of user intent data, and is expected to enhance ICLKâ€™s technology platform which is specifically designed to leverage 3rd party data to consistently deliver top results for advertisers. The company believes that BlueKai will make its data supply chain much more efficient, enabling them to run more scalable campaigns and optimize toward advertiser goals more quickly than before. Marketers working with program members will be able to tap experts who have long and extensive experience working with BlueKai data and who have deeper product integration with the company. Shares gained twelve cents on the week to close at $1.88.
Immunocellular Therapeutics (OTCBB: IMUC), a clinical-stage biotechnology company that is developing immune based therapies for the treatment of brain and other cancers, announced last week that it participated in the Southern California Investor Conference held in Newport Beach, CA on Tuesday, August 18. The conference brings together officers from 30 of Southern California’s leading growth oriented companies operating across a breadth of enterprises, including the life sciences, technology, media, and real estate/financial industries with retail and institutional investors from all over the nation. Shares lost one cent on the week to close at $0.49.
IceWeb (OTCBB: IWEB), a storage technology company specializing in Geographic Information Systems (GIS) that provides services to bureaucratic and corporate organizations, reported results for its third quarter ended June 30, 2009 last week. Among the highlights were revenue margins for the IceWEB family of products eclipsing 50% for the first time ever, compared to 12.2% in the same period in fiscal 2008, attributable to the company exiting their lower margin reseller business earlier in the year to focus on the sales of high-margin proprietary storage solutions. As a result of this decision to divest the lower margin business which the company expects will lead to higher profitability over the balance of the year, revenue for the period was $826,000 compared to $6.0 million for the same period in fiscal 2008. Third quarter total operating expenses were $1.2 million, which included $322,000 of non-cash items, compared to $2.8 million in the year-earlier period, while EBITDA for the period was a loss of $396,000, compared to a loss of $617,000 in the previous year. In other news last week, the company announced that its wholly owned subsidiary, INLINE Corporation, and Spot Image Corp., a leading supplier of geospatial information, have signed a commercial partnership agreement giving INLINE rights to distribute imagery data to the entire U.S. Federal and Commercial market. The U.S. market represents one of the largest user-bases of SPOT imagery in the world, which is used for many applications including homeland security, agriculture, geology, forestry, regional planning, education, intelligence and warfare. Shares lost two cents on the week to close at $0.08.
OmniComm (OTCBB: OMCM), a leader in integrated electronic data capture (EDC) solutions for clinical trials, announced last week that it has been selected to provide eClinical data management solutions for two more organizations engaged in clinical research. The first deal involves Amarex, a Mid-Atlantic based Contract Research Organization, which will be conducting an upcoming Phase III trial investigating the use of a medical device for wound healing. The study will be conducted at over 30 sites and will recruit up to 300 patients over the course of two years. Amarex also joined OmniComm’s CRO Preferred Program, which will allow them to offer OmniComm’s flexible, robust electronic data capture solution, TrialMaster(TM), to their clients. The second deal announced this week will involve studies for Impax Pharmaceuticals, a California based organization conducting an international Phase III study in patients with Parkinson’s Disease. Shares gained a penny on the week to close at $0.24.
ONE Holdings (OTCBB: ONEZ), a rapidly growing company focused on the acquisition of core operating assets in the Asia Pacific and greater China region, announced last week that it has signed a letter of intent to acquire Jianou Lvjian FoodsStuff Co., an award-winning green-technology enterprise that specializes in the highly profitable production of organic products and fertilizers based on bamboo. JLF is the third largest bamboo producer in China and is the first bamboo company in China to gain food safety certification from both Japan and Europe; it operates nearly 6,635 acres of bamboo land in Fujian Province, one of China’s largest bamboo growing areas. ONEZ has indicated that upon completion of the acquisition it expects combined revenue, EBITDA, and net income for ONE Holdings would be increased to $27 million, $10 million and $7.7 million respectively based on 2008 results. In related news last week, the company announced results for its subsidiary, Green Planet Bioengineering for the second quarter of â€™09. Second quarter revenue was $2,169,748, with EBITDA of $920,085 and operating income of $841,466; net profit reached $615,857. For the first two quarters of â€™09, the company reported $4,467,369 in revenues while EBITDA reached $2,131,764. YTD 2009 operating income and net income came to $1,981,689 and $1,458,582 respectively. Green Planet managed to maintain margins for the period of over 59%, and expects that the results for their next two periods will be stronger as the first half of the year is traditionally much slower. Shares remained unchanged at $1.05 on the week.
Steel Vault (OTCBB: SVUL) an emerging provider of identity security products and services, announced last week that its Chief Executive Officer, William J. Caragol, appeared in an interview on the NBC news affiliate in West Palm Beach on Tuesday, August 18,. Mr. Caragol described how the companyâ€™s services, offered through its NationalCreditReport.com subsidiary, can help protect people’s credit and shield them from identity theft. A replay of the broadcast can be found on the affiliateâ€™s website. Shares lost half a cent to close at $0.295.