Companies featured in this edition of the newsletter: CUR, DKAM, ENZ, IWEB, NXOI, OMCM, ONBI, PSID, SIHI
Markets finished the year’s last full week of trading mixed for the second consecutive week, as the Fed’s policy announcement, the deterioration of Greece’s credit rating and strong earnings reports from several big tech names combined to lead the major indices in opposite directions. All told, the Dow surrendered 142 points to close at 10328, down 1.4% on the week, reducing its yearly gains to 17.7%. The Nasdaq performed significantly better, posting a 1.0% gain on the week, bringing its YTD gains to 40.2%, while the S&P 500 lost 0.4% and the Russell 2000 gained 1.7%, bringing their yearly gains to 22.1% and 22.2% respectively.
Volatility returned to equity markets early in the week, ahead of the FOMC’s December meeting, as a slight sell off on Tuesday was recouped ahead of Wednesday’s policy announcement. The announcement remained largely unchanged from statements made in prior months, with the exception of a slightly more optimistic tone regarding developments in the labor market; the Fed again announced its intention to keep rates at historically low levels for, an extended period of time.
The week’s only significant news came on Thursday, when markets reacted badly to the announcement late Wednesday that Standard & Poor’s had cut Greece’s credit rating, dropping it one level from A- to BBB+, citing the country’s need to address its status as the holder of the European Union’s largest budget deficit. In corporate news that same day, better than expected results from Research in Motion and Oracle helped buoy the tech sector and led to the Nasdaq’s outperformance. Following the week’s activities, seven of the ten sectors comprising the S&P 500 finished in negative territory, led by Telecom, down 2.3%, and Consumer Staples, down 2.1%, while IT led all gainers with a 1.1% addition on the week on the strength of the aforementioned earnings reports.
What should investors look for this week? Earnings reports will be very limited due to the holiday shortened week, but look for results from ConAgra (NYSE: CAG) before the bell on Monday, followed after the close by Jabil Circuit (NYSE: JBL).
Economic releases for the week begin with Existing Home Sales for November due out at 10:00am on Tuesday. On Wednesday, look for Personal Income and Spending, and PCE and Core PCE Prices, all for November, released together at 8:30am. Revised Michigan Sentiment for December follows at 9:55am, with New Home Sales for November due to be released at 10:00am, followed by weekly crude inventories at 10:30am. The week wraps up on Thursday with weekly initial jobless claims and continuing claims, along with Durable Goods Orders for November at 8:30am.
There are no conferences of note scheduled due to the holiday shortened week.
Rodman & Renshaw healthcare analyst Reni Benjamin, Ph.D, released a research update on vertically integrated life sciences company Enzo Biochem (NYSE: ENZ) last week, in which he reaffirmed his support for the company’s long term prospects. In the report, Dr. Benjamin reiterated the “Market Outperform/Speculative Risk” rating on the stock, and put a 12 month price target of $14 on the shares which are currently trading at $5.69, based on a 2015 discounted earnings per share and revenue per share analysis. Benjamin cited the recent addition of two widely used, high margin diagnostic tests to the company’s portfolio -colorectal screening test ColonSentry and cervical cancer screening test oncoFISH which represent a shift in the company’s strategy towards high end molecular diagnostics that have the potential to create substantial upside due to synergies created between the company’s clinical labs and life sciences divisions. He concluded his opinion by stating that, “Enzo has the potential to generate significant value for the long-term investor interested in a fundamental revenue story, augmented by considerable potential upside from a burgeoning therapeutics pipeline.” Shares gained two cents on the week to close at $5.69.
PositiveID Corp. (NASDAQ: PSID), a provider of unique health and security identification tools to protect consumers and businesses, announced last week that technology developed by its partner, Receptors, LLC, has been featured in the Journal of the American Chemical Society, a peer reviewed journal devoted to the publication of fundamental research papers in all areas of chemistry. The article, entitled Small Molecule-Based Binding Environments: Combinatorial Construction of Microarrays for Multiplexed Affinity Screening, documents the construction of Receptors’ patented CARA (combinatorial artificial receptor array) technology, which has been licensed to PSID for inclusion in the development of the company’s glucose-sensing RFID microchip and rapid virus detection system for the H1N1 virus and other pandemic viruses. Shares lost fourteen cents on the week to close at $0.94.
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 it had received approval from the Emory University Institutional Review Board (IRB) to commence a Phase I clinical trial investigating the use of the its proprietary neural stem cells to treat Amyotrophic Lateral Sclerosis (ALS or Lou Gehrig’s disease), a debilitating neurodegenerative condition affecting roughly 30,000 people in the U.S. The trial, which was approved by the FDA in September, will take place at the Emory ALS Center under the direction of Dr. Jonathan Glass M.D., Director of the Emory ALS Center, who will serve as the site’s Principal Investigator. The trial will study the safety of Neuralstem’s cells and the surgical procedures and devices required for multiple injections of the cells directly into the grey matter of the spinal cord. Shares lost five cents on the week to close at $1.79.
SinoHub (AMEX: SIHI) a company providing world-class supply chain management services with transparent information access for participants in the electronic components supply chain in China, had coverage initiated with a “Buy” rating by analysts from Canaccord Adams last week. Canaccord joins Global Hunter Securities in covering the company, with a median price target between the two organizations of $6.00, on the shares which are currently trading at $3.62. Recently, SinoHub announced that it has signed a new three-year lease, expanding its warehouse facilities in Hong Kong nearly three-fold to 79,500 square feet to support its growing business operations. The company’s current facility encompasses 26,900 square feet and processes nearly $70 million a month in electronic components; management expects that the newly expanded facilities will allow it to process approximately $200 million per month, assuming a similar business and product mix.Shares lost eighty eight cents on the week to close at $3.62.
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 expanded into Ontario, Canada, and has sold $50,000 of Trump Super Premium Vodka to the Liquor Control Board of Ontario (LCBO). The sale marks the initial launch of the brand in Toronto markets, and expands the offering outside of existing Canadian distribution channels within the provinces of Alberta and Manitoba. International penetration for the iconic spirits has been increasing of late, as the company recently announced $150,000 in new orders to be shipped to Israel in addition to the Canadian expansion. Management believes that the increased international demand demonstrated by the new orders for the brand is a direct result of the worldwide recognition of the Trump name, and expects to see increased order flow as it continues to roll additional iconic brands out in overseas markets. Shares remained unchanged at just over a penny on the week.
IceWEB (OTCBB: IWEB), a leading provider of purpose built appliances and building blocks for cloud storage networks, announced last week that it has expanded on the original deployment of its high-density storage platform with U.S. Department of Agriculture’s Agricultural Research Service (ARS). The TruEnterprise product line has been utilized by the ARS for several years for both regular data storage functions, and to ingest Geospatial raster and vector images from their field teams; the platform’s versatility provides significant ROI by drastically reducing IT costs associated with storing and processing large volumes of data, which has been rewarded with the expanded deployment. In other news last week, the company also announced that it has begun manufacturing ESRI’s latest version of the ArcGIS Data Appliance, expanding on the more than 1 Petabyte of ArcGIS Data Appliances which IWEB has already developed as part of an agreement to produce purpose built data appliances pre-loaded with imagery, which ESRI delivers to clients worldwide. Shares remained unchanged at $0.13 on the week.
Next One Interactive (OTCBB: NXOI), an interactive media company specializing in Digital Media with a focus on Travel and Real Estate, announced last week that it will begin airing the “American Outdoorsman” on the Resort & Residence Network. The show is one of the most popular and well recognized outdoor adventure/travel series airing today, and will also begin airing commercials promoting their new American Outdoorsman Outdoor Adventure Travel Club and American Outdoors TV series for kids.Members who join the new American Outdoorsman Adventure Club will be offered a cruise incentive purchased through Next One Interactive; under the arrangement between the two entities, Next One Interactive’s travel division, Extraordinary Vacations, will be the exclusive travel booking partner for the American Outdoorsman Adventure Club’s Celebrity Trips and American Outdoorsman weekends. With projections calling for a minimum of 2000 travelers for each outing, the partnership is expected to generate over 20,000 trips for Extraordinary Vacations during 2010. Management from both companies expect that the relationship will add significant revenue streams to their bottom lines from a number of channels, including travel bookings, advertising, sponsorships, production, and membership fees. Shares gained four cents on the week to close at $1.05.
OmniComm Systems, Inc. (OTCBB: OMCM), a leader in integrated electronic data capture solutions for clinical trials, announced last week that it has been selected by a West Coast biopharmaceutical company specializing in small molecule medicines across a number of therapeutic areas, to provide its TrialMaster EDC solution in association with a 9 month Phase I study which is expected to enroll over 80 subjects across 2 sites. Management has indicated that Trialmaster was selected due to its ability to quickly build studies while remaining within budgetary constraints, and as a result of the platform’s support of the client’s internal data standard. Shares remained unchanged at $0.18 on the week.
One Bio (OTCBB: ONBI), a company utilizing green process manufacturing to produce raw chemicals and herbal extracts, natural and health supplements and organic products, announced last week that it has appointed Dr. Jian Ming Chan, the company’s Chief Scientist and current Chair of the Department of Environmental Science & Engineering at Fudan University, to its newly created Advisory Board. Dr. Chan will work with the Company’s Board of Directors to identify respected members of the bio-science community who would be strong additions to the newly created Advisory council, and will be responsible for educating Directors on developments and research relating to natural supplements, herbal and chemical extracts, and organic products; Dr. Chan will also be making recommendations to the company regarding potential additions to the company’s product line. Shares remained unchanged at $6.10 on the week.