Saturday, December 22, 2012

Stock Watch Wednesday, 19 December: DDD, SSYS, HP, ONVO, PFE, UTHR, VNDA, NVS, HEB

Tuesday registered another solid up day for the markets as investors embraced positive discussions taking place between Democrats and Republicans during the opening days of the week, but an about face of media coverage Tuesday evening could spark a little bit more uncertainty into the markets regarding the outcome of negotiations.  Concessions were made by both sides this week as they played a game of 'offer, counter-offer,' but indications on Wednesday morning were that Republicans were preparing a 'Plan B,' which was to adopt their own tax bill, should President Obama not budge on his latest proposal.  Since everyone in the knows that anything the Republicans put forth will not make it through the Senate, there is reason to believe - again - that we may end up going over the cliff at the end of the year.  Even the leaders of the two parties cannot muster enough support from within to rally behind what is on the table now, so we may not be as close to the end of this thing as previously thought.  Should make for a nail-biting couple of weeks for those keeping track.

All that aside, the markets have prevailed and December has looked pretty green so far.  With each of the DOW's hundred point swings higher, however, one can't help to believe that what we may be seeing is a case of 'buy the rumor, sell the news.' With that in mind, it's quite possible that a case of 'sell the news' can materialize whether a fiscal cliff deal is announced or not, just like the markets rallied into the elections in November, but tanked afterwards.  The lack of a deal would likely lead to a more pronounced drop than should one be agreed upon, but we could be setting up for a fall either way.  After all, even with a deal, some taxes will be going up anyway, which will make some investors a tad more apprehensive about holding into the new year.

Trading strategies should not be altered, in my opinion.  Having some cash on the sidelines prepares one for any eventuality, while individual entry and exit strategies can still be adhered to - especially for catalyst-based trades - regardless of what is going on in the surrounding market.

As those stories all play out, here are a few stocks and stories to keep an eye on...

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3D Systems Sets 52-Week High

Shares of 3D Systems Corp (DDD) pushed through the fifty dollar mark on Tuesday and set a new 52-week high in the process.  3D shares have been flying all year long as 3D printing technology has been thrust to the forefront of next generation technology and, judging by recent analyst coverage of the company, there could be more to come with this run.  JPMorgan Chase (JPM), for instance, upgraded its rating on DDD shares to 'neutral' from 'underweight,' but other analysts also initiated coverage with 'buy' ratings and price targets at or in the range of sixty bucks.  Analysts argued that the wide-spread acceptance of the 3D printing technology and the growing earnings estimates warranted the positive coverage and enthusiastic outlooks.  In light of the company's triple in price during the past year, many other large media outlets have also jumped on board with coverage and/or reporting of the stock. 

3D printing has been around for a while, but is methodically catching on mainstream with double digit growth projected moving forward.  DDD and some other companies, such as Stratasys (SSYS) - and to a lesser degree Hewlett-Packard Company (HP) - have benefited greatly from the growth of the industry.  As indicated by the analyst coverage mentioned above, DDD and other companies in the sector may still return very solid gains over the long term.  Since shares have run so far so fast, however, it's also worth considering the precautionary note that some profit taking may develop over the near term, as it's a general rule that stocks which experience such runs often experience a pullback at some point.  For those interested in remaining with - or accumulating into - the 3D printing technology, it may be best to do so modestly at first, and then average down if the opportunity arises in the event of a pullback.

Much of the recent reporting can be interpreted by some as 'hype reporting,' while others may consider the 3D sector as trading in a bubble right now.  There's little doubt that the technology is for real and will become a big part of the printing technology of the future, but a jump in here might be considered 'chasing.'
You can't argue with a triple in price through the course of a year, though, especially for a multi-billion dollar company, so this will be one to watch, and it never hurts to keep a stock on the watch list for a period of time before jumping in anyway.


Organovo Signs Software Partner

In keeping with the theme of 3D printing technology, Organovo Holdings (ONVO) also made some noise this week and may be worth keeping an eye on as a still-developing company with big potential in this rapidly-growing sector.  Organovo has applied the 3D printing concept to the field of healthcare and biotechnology by developing the NovoGen MMX Bioprinter, which uses live human cell samples to generate 3D "bioprints" of human tissue that can then be used as disease models and enhance therapeutic drug discovery and development.  The potential of this technology over the short to mid term is significant, as mentioned above, in the realm of therapeutic research and development, but looking further on down the road Organovo could potentially put this technology to use in generating organs for patients awaiting transplants, as previously discussed.  That specific potential was highlighted by The Economist magazine a couple of years ago while other high-profile coverage from CNBC validated ONVO's potential more recently.

With the 3D sector as a whole receiving the attention it has over the past year, Organovo was able to land the collaboration of both Pfizer (PFE) and United Therapeutics (UTHR) early-on in the development of its technology.  Aside from the development of the MMX Bioprinter, these evolving relationships will be worth monitoring moving into the new year as UTHR currently retains the option to acquire a license from Organovo in relation to the results of the ongoing collaborative effort.  Such a license - if the option is enacted - would provide Organovo with up-front cash money and a future revenue stream from royalties paid.

On Tuesday Organovo issued an update on its collaborative efforts by announcing a deal with Autodesk, Inc. to create the first 3D design software for bioprinting.  Autodesk is the leader in cloud-based design and engineering software and, as described in Tuesday's press release, "will represent a major step forward in usability and functionality for designing three-dimensional human tissues, and has the potential to open up bioprinting to a broader group of users."

ONVO shares have not enjoyed the broad-based runup that others in the sector have, most likely because its bioprinting technology is not fully mature, but it could provide an opportunity for those that have missed the big sector-wide run this year to play the technology into the future, although just a bit more speculatively so.  Shares have hovered right around the two dollar mark for some time now and volume has remained relatively steady.  With that being said, though, it is obvious that ONVO is receiving its share of attention.  Volume was more than four times the daily norm on Tuesday with a noted - although brief - spike right when the news hit the wires during mid-day trading.  Both could be signs that accumulation is taking place in the background and once that accumulation is complete, then shares may have the opportunity to appreciate in value for the short term.

Over the long term investors will be watching for new or expanding partnerships and the development of the NovoGen MMX bioprinter.  Judging by the huge moves in other stocks in the 3D printing sector, ONVO, too, could have its day. 

Healthcare, Biotech, Pharmaceutical:

Vanda Moves On Sleep Drug Study

After dropping back towards the three dollar mark earlier this week on news that the company's schizophrenia drug Fanaptum received a negative approval opinion in Europe, Vanda Pharmaceuticals (VNDA) was on the move again on Tuesday when shares spiked by nearly twenty percent on very high volume following the announcement of positive results from a Phase III trial for the sleep drug Tasimelteon.  According to Tuesday's report, Tasimelteon met the primary endpoint of the trial and "demonstrated significant improvements across a number of sleep and wake parameters including measures of total sleep time, nap duration, and timing of sleep." 

This positive development reinvigorated life into VNDA shares, which otherwise been stagnant for months, and provides the company another avenue of revenue potential following Fanapt's disappointing launch.  Some may remain skeptical, however, since Tasimelteon has been considered a "me, too" product in the past and it still needs to muster an FDA approval before commercialization can be considered.  That said, the sleep-aid industry is a multi-billion dollar industry, so should Vanda make even a small dent in that business, then a market cap of significantly higher than one hundred million could potentially be justified, especially with the cash on hand that Vanda keeps in its war chest. 

Investors will also look to see if a partner will materialize for Tasimelteon, assuming approval.  Novartis (NVS) is already on board for Fanapt, so some may speculate that if NVS sees value in Tasimelteon, then an all-out merger or acquisition could be consummated between the two.  Vanda could be had now by big pharma for relative chump change, but a lot depends on how the big boys value the sleep-aid product.  Meeting a Phase III endpoint is a good start, but there's still a little while to go before realizing success.

It's been a roller-coaster week for VNDA shares, but the story is worth watching again.

Hemispherx BioPharma Loses Forty Percent In Value

Hemispherx BioPharma (HEB) is one of the hotter stories to watch for the remainder of the week.  The company's drug for chronic fatigue syndrome (CFS), Ampligen, is currently before the FDA for approval review and an advisory committee is due on Thursday to vote on its decision recommendation.  Shares plummeted by over forty percent on Tuesday, however, when the FDA released documents to the public indicating the an earlier review of the product cited agency concerns over the safety, efficacy and data compilation during the clinical process.  The FDA also indicated that the data reviewed may not be enough to support an approval request.  Such concerns were not previously aired publicly, hence the significant drop in the HEB share price.

Another aspect to this story is that CFS has proven to be a tough cookie to figure out and a growing lobby of citizens diagnosed with this illness have little or no effective treatments on the market, hence the huge amount of attention the HEB story is receiving.  To be fair to the Ampligen story, effective means and methods for compiling data in testing and treating CFS are still being developed, given the complex nature of the illness and the unknowns surrounding its root cause.  The FDA itself is treading new ground here, as it did with Human Genome's lupus-treating drug last year, given the complex nature of lupus, too.  That illness went half a decade in between treatment approvals.

The Tuesday reports make it hard to believe that HEB will receive an approval for Ampligen, but at the same time the CFS lobby is looking for something on the market to help treat their condition.  It will all be in the spotlight on Thursday for that advisory committee meeting and investors should expect a significant amount of volatility leading into the decision date.  If it looks like a no-go, shares may drop by another forty to fifty percent.  A positive opinion, however, could result in a very quick rebound. 

Press releases were circulating on Wednesday morning from law firms looking for investors wanting to file a class action suit against HEB for withholding information.  Expect some bad press over the coming days, with some solid supporting arguments being put forth, too.

A hot one to watch.

Roundup:  Early indications on Wednesday are that another up day could be in the works.  It's been a solid week of gains thus far and investors could be in for even more.  As usual these days, watch the headlines for updates on the cliff negotiations, as that will likely drive the trading patterns from now until the end of the year.  Regardless of the outcome, however, a dip could be in the works whether a deal is done or not, as many investors may take the 'sell the news' approach to the whole ordeal.  In the meantime, enjoy the gains.

Happy Trading!!!

Disclosure:  Long ONVO.

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Thursday, December 20, 2012

Stock Watch Tuesday, 18 December: AAPL, FCEL, D, TTNP, CELG, HTWR, INO

The markets loved the fact that US President Barack Obama and House Speaker John Boehner met face to face on Monday to discuss their respective proposals over how to avert the fiscal cliff, as the DOW jumped by one hundred points and the Nasdaq and S&P were also up by over a percentage point each.  More than just the fact that two met, however, was that the meeting came with a counter-offer by the President to what was proposed by Mr. Boehner last week.  Funny how that bipartisan and cooperation stuff works when the two sides are willing - it's refreshing to see such strategies return to Washington. 

There's still much to be done, though, but the tone looks to be set that it will all get done.  Cooperation does not mean instant agreement, so the two sides still need to come closer on the limit for who will receive tax hikes next year; the President's new proposal calls for increases on those earning more than $400,000 per year while Mr. Boehner's latest offer stood at a cool million/per.  It's likely that the two will agree to a number in between ($500-$600k would be my guess), while they also need to agree on when to raise the next debt ceiling.

No longer does it look like that the two cannot negotiate a deal before the end of the year, but where things still might get tense is when each has to convince their respective parties to buy off on whatever it is the President and Mr. Boehner bring forward.  With less than two weeks left to the year - and with the Christmas holidays taking some working days out of the mix next week - there will be little time for collective negotiations from the Democrat and Republican bodies of the Government, once a preliminary deal is proposed. 

So while Monday's tone is encouraging, this story is far from over.

As negotiations continue to play out, here are a few stocks and stories to keep an eye on...


Judge Denies Apple's Request

Apple (AAPL) shares rebounded by nearly two percent on Monday as the broad markets enjoyed a nice up day in light of  encouraging signs of cliff cooperation in Washington.  It's also likely that shares benefited from enthusiastic reports over the weekend of the positive reception in China for the iPhone 5.  In news unrelated to yesterday's trading, but news likely to be discussed on Tuesday, a Reuters report issued late Monday night announced that a judge had denied Apple's request to implement an all-out injunction on the Samsung smartphones that were found earlier in the year to have infringed on Apple's patented technology.  In the ruling, the judge essentially noted that an injunction would be over and beyond the common sense realm of punishment, given that Samsung was already ordered to pay Apple over a billion dollars in retribution while also only infringing on limited aspects of its smartphones. 

For investors digesting the news on Tuesday, the ruling comes as a relative non-factor.  Had the ruling in fact forced the target Samsung devices from the market, Apple likely could have benefited, but the fact that they're still on the market just means that we move forward with the status quo - and any Apple concerns should be directed at the company maintaining its technological and brand dominance.  When companies rely on pulling the competition off the shelves to stimulate growth, that's a sign of trouble because it means that its own technology is not impressing enough to 'sell itself.'  Not to say that Apple is in that position, but for a pullback to occur because of this news alone, it would indicate that investors might believe Apple is losing its dominance. 
That should not be considered the case just yet, but that could change.  As discussed this weekend, Apple has consistently relied upon consumers buying the 'latest and greatest' model of a particular product every time an update is released.  Then the mini comes on the scene - which is essentially a re-packaged deal of what's already out there - and one has to ask how long is the consumer going to buy different colors and different models of a bunch of products that all pretty much do the same thing before saying 'enough is enough?'  Add to that fact that there are a whole lot of protests going on in China these days calling for higher wages and better working conditions.  Many in America will stare at their television screens and agree that the people of China have a right to better working conditions, but then complain if the price of an iPhone were to jump as a result of better working conditions as the profit margins of Apple products shrink.

The same can be said for the news that Apple is moving a bunch of manufacturing jobs back to the US, too. The American worker demands more for their efforts than any other worker in the world, which costs money and leads to higher prices on products and/or lower profit margins for those products. 

By no means is Apple on the brink of losing its dominance, but these are all likely some of the considerations being taken into account that justifies the profit-taking we've seen over the past weeks, especially since AAPL has returned such impressive paper gains over the past couple of years.  Time to turn those paper gains into actual gains.  There's never anything wrong with doing that.

Any price movement on Tuesday will likely be unrelated to the judge's ruling on Monday.

Industry/Clean Energy:

FuelCell's Run Continues

FuelCell Energy (FCEL):  Shares of FuelCell Energy continued their surge on Monday following last week's announcement of a deal with Dominion Resources (D) to develop the largest fuel cell power project in North America.  As mentioned over the weekend, this announcement came as a huge validation of the company's potential to infiltrate the clean energy market, especially on the heels of Hurricane Sandy, which greatly exposed the weaknesses of regional power grids.  After a seven percent move on Friday when the deal was announced, FCEL follow-up on Monday with a push through the dollar mark on a nine percent move higher.  Also in line with Friday's action, the move was supported by volume of roughly triple the daily norm, indicating that investors are taking this development seriously. 

FCEL is one to keep an eye on right now.  A financing deal earlier in the year valued shares at $1.50/per at the time, but the stock has traded well below that point for months.  Historically speaking, dips to the dollar level or below have proven to be opportune buying times, regardless of whether intended for accumulation or quick trading purposes.  Progress overseas has already been well documented this year, but the US deal helps to draw attention to the growing US demand for the FuelCell technology, and it doesn't help having a cheerleader like Bloomberg come out of the woodwork with a high-profile article at every critical juncture for the company.

With big volume rolling in and a fifteen percent-plus price spike, one could expect some profit taking, but this Dominion deal could lay the ground work for similar arrangements and mark the revival of FuelCell Energy over the short to mid term. 

Also keep an eye out for the company's earnings report later this week.  There's no expectations of profitability in the immediate future, but if investors predict this milestone can be achieved within the next year or so, then shares could respond accordingly.

The future can quickly start to become now for FuelCell.

Healthcare, Biotech, Pharmaceutical:

Titan Lands Commercial Partner For Probuphine

Titan Pharmaceuticals (TTNP) spiked by seven percent last Friday and made it to the 'Weekly Stock Watch' list this week as a result, but any questions regarding the spike were solved on Monday when the company announced a milestone news event that led to a further ten percent spike in the TTNP hare price.  After years of awaiting confirmatory news that Titan has landed a commercial partner for its subcutaneous controlled-release treatment for opioid addiction, that news came on Monday in the form of a partnership with Braeburn Pharmaceuticals Sprl.  Braeburn is wholly owned by Apple Tree Partners IV, L.P., a partnership affiliated with Apple Tree Partners.  What's significant for Titan is that the deal comes with an up-front payment of nearly sixteen million dollars - alleviating a good portion of investor concerns about future financing - and potential milestones of over two hundred million dollars possible.  A future royalty on sales is also a part of the agreement.  Most significantly over the near term, the milestone payment for a Probuphine approval would put fifty million bucks in the bank for Titan.

Investors concerned that the company was forced to settle for a partnership with a lesser-tiered company and not a major pharmaceutical or biotech name should consider the relatively weak position that Titan was dealing from, at least financially, and the potential to reap some nice rewards in terms of milestones and royalties later on down the road.  No matter how valuable a product Probuphine may be, other partnership deals could have taken the product and given terms much less lucrative to Titan than this one - especially considering that Probuphine is not yet approved. 

Additionally, it's worth considering that the Apple Tree agreement positions Titan more for a potential merger or acquisition than it does for commercialization.  Apple Tree is made up of industry veterans - with contacts in the industry - and they've already demonstrated the ability to consummate high profile deals by delivering Gloucester Pharmaceuticals to Celgene (CELG) a while back and have also demonstrated the ability to manage the commercialization and/or development of other companies, such as HeartWare International (HTWR) and Aileron Therapeutics.  This could turn out to be a pretty good deal for Titan and its shareholders. 

With the partnership deal done and non-refundable up-front cash in the bank, it's all eyes on the Probuphine approval decision.  Expect TTNP, with some volatility assumed, to rally at points leading into the decision, with a push towards two likely at some point during that time.

Inovio Volume Boost May Indicate An Accumulation Point

Shares of Inovio Pharmaceuticals (INO) have been trading with consistently higher volume through the month of December thus far, besting the daily norm each day, bar two.  The volume spike could be an indication of accumulation for investors who have eyes towards the mid to long term progression of the company's deep pipeline - which includes nine programs in development, three of which are in Phase II stages (and six of which are funded with the help of third party collaboration) -  while short term potential also exists, given the volatile and speculative moves that the stock has already demonstrated this year. 

As noted above, the company has nine programs currently in development, some of which could produce actual or interim trial results through the course of 2013.  Potentially the most-watched story will be the progress surrounding Inovio's universal flu vaccines, based on its proprietary SynCon platform, which produces synthetic vaccines to treat various infectious diseases and cancer types.  Just recently the company announced interim results from an ongoing Phase I trial demonstrating that Inovio's universal H1N1 vaccine proved to be twice as effective as the current standard of care and additional updates next year could prove as a catalyst for the INO share price as trials mature and/or finalize.  Updates on other ongoing trials are expected in 2013, also a reason why investors may be taking advantage of the current prices to accumulate shares.

In conjunction with the SynCon platform, Inovio is also advancing its novel electroporation process through development.  As described on Inovio's website, uses controlled, millisecond electrical pulses to create temporary pores in the cell membrane and allow dramatic cellular uptake of a synthetic DNA vaccine previously injected into muscle or skin. This technology allows Inovio to more accurately and effectively direct its vaccine technology into the intended cells and has thus far proven successful in practice.
The combination of the SynCon pipline and the electroporation delivery technology could have the company positioned to reach multiple clinical milestones during the coming year, as mentioned above.

The pipeline is still only in Phase II trials, however, meaning that the company is still highly speculative and will be susceptible to volatile peaks and valleys along the way, as demonstrated already this year.  That said, speculative investors look to buy into a good story before the most significant percentage gains can be had, hence some of the possible accumulation we've seen recently.  It also helps for both the longs and traders that there is enough cash on hand to last well into 2013, according to recent reports, allowing for longer rallies and possibly sustained higher prices, should they materialize.

While keeping in mind the speculative nature of INO, it could be a nice accumulation pick at the current levels with an eye towards the development of SynCon and electroporation.  Judging by this end-of-year uptick in volume, other investors may agree.

Roundup:  Concessions from both sides sparked an early week stock market rally and any continued positive progress in the cliff negotiations could fuel the run further, but also bear in mind that a deal is still far from done, as mentioned in the open.  Individual investors should stick to their entry and exit strategies (that should be devised before investing in a particular stock), in my opinion, as the story rolls along.  Of course the idea of keeping some cash in hand to play into any market dip still looks good.  Early indications on Tuesday are that another up day is in the works - at least at the open.

Happy Trading!!!

Disclosure:  Long TTNP, INO, FCEL.

Contact VFC's Stock House:

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Wednesday, December 19, 2012

Weekly Stock Watch, Week of 17 December: AAPL, RIMM, GE, F, CPST, C, TROV, AMRN, VNDA, TTNP, NVS, FCEL, D

At the conclusion of each week, VFC's Stock House examines some news items, stocks and stories that made headlines during the previous trading week, but may also make headlines or influence trends during the upcoming week as well.

Ordinarily the only significant trading investors see during the closing couple of weeks of December is some tax-loss selling, but given that we're now in serious 'crunch time' in terms of possibly averting a fiscal cliff calamity, the coming week or two could be full of volatile moves based on the headlines and updates of the day.  The markets edged lower on Thursday and Friday of last week, indicating that investors may be losing faith that a deal can get done - even one that would postpone a final decision and temporarily halt the tax cuts and spending hikes that would be implemented come 1 January.

Another factor that could come into play for the remainder of the year is capital gains selling.  Because capital gains taxes could be slated for a significant bump, investors may take advantage of bailing out under the 2012 rate, rather than take an additional tax hit next year.  Many analysts, especially those that favor higher taxes, argue that investors would not sell for that reason alone, but others speculate that capital gains considerations are a large part of why Apple (AAPL) shares have been on the rapid decline over the past couple of weeks.  Looking at it objectively, however, Apple is also facing much stiffer competition in the smartphone market that is about to also introduce Research In Motion's (RIMM) BlackBerry 10.

So it's all eyes on Washington, with little distractions this week.  Investors will be observing negotiations with probably a little more intensity that what the New York Giants showed in Atlanta this week, especially since President Barack Obama and House Speaker John Boehner still look to be far apart on finding some middle ground.  Boehner noted over the weekend that he would settle for tax increases on those making more than a million dollars annually, but fell short of indicating that he'd go any lower.  The White House is still standing fast.

In keeping with the theme over the past few weeks, 'tis the season to keep at least some spare cash on the sidelines in order to pounce on any broad market dip - or at least to take advantage of those individual stocks that may experience more protracted dives than others.

As negotiations continue to play out, here are a few stocks and stories to keep an eye on this week...


General Electric Announces Boost in Dividend and Revised Share Buyback Plan

Although shares of General Electric (GE) closed the day unchanged on Friday, the company was full of good news for investors leading into the new year.  Come January of next year, according to a Friday announcement, the dividend rate for GE shares will jump by twelve percent to nineteen cents per share, while the company also announced plans to boost its share buyback program by ten billion dollars.  Both moves, according to Chief Executive Jeff Immelt, are intended to return cash to shareholders.  The two moves also help to negate the dividend cut and issuance of new shares that took place in the wake of the financial meltdown of 2008-09, which resulted in GE shares trading for under ten bucks at the time.  A revival in GE Capital has helped to spark the cash flow that will allow the company to implement these plans, although GE also looks to reduce exposure to its financial services division, given the huge hit it took during the crash of a few years back.  The share buy back will extend into the year 2015.  Already THE global conglomerate that touches many different sectors of the economy, GE may have again offered investors a reason to stick a few more shares of the company in the long term or retirement portfolio. 

In moving into the next generation of industry and clean energy, GE also announced a deal with Ford Motor Company (F) a few weeks back where 2,000 of Ford's C-MAX Energi plug-in hybrids will be purchased for GE's business fleet.  The company also maintains a collaborative effort with Capstone Turbine (CPST), a company gaining increased attention for its low-emission, clean energy producing microturbine units. 

Barring any major market meltdowns again, GE may be positioned as a nice, stress-free addition to the long term portfolio.  The boost in dividend rate certainly helps make that case.

Apple Continues its Decline

Apple shares continued their rapid decline on Friday, dropping by nearly another four percent and hitting intra-day lows of just over five hundred bucks per share.  As mentioned above, many may have decided to sell based on expectations of higher capital gains taxes next year, but there is also concern of growing competition in the smartphone market.  Apple has also not 'wowed' consumers with a new product lately, preferring simply to re-size or re-brand existing technology and offer updated models as often as most people change their undergarments in hopes of keeping consumers re-paying for pretty much the same product.  The iPad-mini, for example, essentially competes with Apple's other product offerings and the initial reception of the iPhone 5 may be an indication that consumers are finally catching on - and not falling prey to - the "gotta have the latest model" hype.  It also may be no coincidence that RIMM shares have doubled while AAPL has fallen, given the pending release of the BlackBerry 10.  Just as quickly as BlackBerry became a thing of yesterday in America, so, too, can the iPhone as new and revived brands hit the market with just as much fanfare. 

APPL also took a hit on Friday due to a downgrade from Citigroup (C), which lowered its rating from 'Buy' to 'Neutral' while also cutting the price target to $575 from $675. 

With all that said, however, APPL is far from finished and the time to buy may be when others are selling in this situation.  The new Apple TV that is in the works could be the new "wow" product that consumers are looking for and sales of the iPhone 5 in China looked strong, according to weekend reports.  Additionally, if investors are truly selling for capital gains purposes, then positions could consolidate leading into next year and rebound to somewhere between Citigroup's two estimates, should revenue continue to flow in at recent rates.  It's also worth noting that shares had slipped to near the five hundred dollar mark just recently, only to rebound closer to six within the blink of an eye.

This is a story to watch for the week and into 2013.  Some may see cracks forming in the foundations of this tech giant, but there's not yet a reason to predict Apple's market dominance is coming to an end.

Healthcare, Biotech, Pharmaceutical:

TrovaGene Pushes Through Six

TrovaGene Inc (TROV) shares continued to surge on Friday and pushed through the six dollar mark after having gained momentum during the trading days prior.  Volume also spiked and came in at more than five times the daily norm.  The company had been gaining increased attention this year due to its diagnostic technology that could potentially identify markers for specific cancer types through simple urine tests, and with some of those tests nearing the commercial stage, Aegis Capital initiated coverage of the company with a rating of 'Buy' and sparked the late-week rally.  With a one-day spike of ten percent on Friday, TROV also made the Nasdaq 'largest percentage increases' list, likely attracting even more interest to the company.  Investors will be looking this week to see if TROV is ready to hold its gains.  Multiple of the company's diagnostics are slated for commercialization in 2013, the first of which - a diagnostic able to detect KRAS mutations through urine samples - is expected achieve that milestone this coming January.

With price and volume rising at such an impressive rate, investors could expect some day, swing and momentum traders to play a part in any pending volatility, but those looking to take advantage of this technology's potential could look to play any dips moving forward.  TrovaGene's technology is advancing to the latter stages at a time when global health care trends are searching for cheaper and less-invasive ways to replace standing procedures and that makes TROV a stock to watch during the closing days of 2012 and into the new year of 2013.

Should the technology gain quick acceptance on the open market, it's likely that partnership and/or buyout talk could creep up and boost the collaborative efforts already realized by the company.
Another Patent For Amarin

Amarin Corporation (AMRN):  As usual, it's tough to discuss this sector without throwing in an update regarding Amarin.  Although shares modestly rebounded at points last week, they closed the day at below the nine dollar mark again as investors continued to await news on Vascepa's New Chemical Entity (NCE) status.  A mid-day price spike on Friday indicated that investors are watching the wires for any relevant update and are prepared to act quickly and accordingly, but the NCE news has yet to materialize.  Amarin did announce last week, however, the issuance of yet another patent from the United States Patent and Trademark Office (USPTO) based on the MARINE clinical trial results.  It has been previously argued by the company that enough patent protection was being built, with or without NCE, to ward off any potential legal challenges, although it has also been indicated that NCE is a relevant issue in regards to a potential buyout or partnership.  While anything can happen at any given time in this game, it's a relative given that few - if any - expect anything but the go-it-alone (GIA) strategy to reach fruition next quarter, especially without NCE.

Over the mid to long term AMRN could rebound as many still believe that Vascepa is an eventual billion dollar drug, but over the short term shares could remain depressed if GIA remains the preferable course of action for the pending launch.  Since it's a trader's market where less and less are playing the 'buy and hold' game, that fact could weigh heavily on investor patience.

Vanda Denied In Europe

Vanda Pharmaceuticals (VNDA):  Vanda launched Fanapt in the United States for the treatment of schizophrenia with the help of partner Novartis (NVS)a few years back, but the US launch failed to meet expectations and shares have since declined to under five bucks.  VNDA took another hit last week when the company announced that the product (known as Fanaptum in the EU) had received a negative opinion from the European Medicines Agency's (EMA) Committee for Medicinal Product for Human Use (CHMP) recommending against approval of Fanaptum.  Shares dropped by roughly three percent on the news, but had been declining since the summer months anyway.  Given the disappointing US roll-out, investors were looking towards a European approval as a potential catalyst to inject some renewed life into this stock, but that potential looks to be on hold, at least for the time being.  Vanda plans to appeal the EMA decision. 

A portion of Vanda's revenue goes to Titan Pharmaceuticals (TTNP) due to a long-standing licensing agreement, but Titan has used its share of the Fanapt revenues as leverage in obtaining financing from Deerfield Management.  Titan shares spiked by seven percent on Friday, although for reasons not related to the Vanda news.

Industry/Clean Energy:

FuelCell Spikes On Dominion Deal

FuelCell Energy (FCEL):  Shares of FuelCell Energy spiked by over seven percent on Friday when news hit the wires that the company, in collaboration with Dominion Resources (D), would develop the largest fuel cell power project in North America.  The deal, according to Bloomberg reporting, increases the company backlog of orders to over $125 million and is a testament to the company's growing potential of supplying a significant power source independent of the grid.  What has plagued this company for some time - and resulted in a dramatic share price drop from this year's highs - is the slow roll towards profitability.  Like Capstone Turbine, another company in the sector which is developing clean energy microturbine units, investors have yet to embrace that profitability may be within reach over the short to mid term, compelling many to simply use the stock as a trade, rather than as a hold.  Such activity leads to increased volatility and price fluctuations but also allows for accumulation and numerous trading opportunities. 

This deal with Dominion, one of the largest energy companies in the nation, could be the spark that FCEL shares have needed over the past months and provide the 'foot in the door' for FuelCell to boost its US-based business, following some nice overseas deals announced earlier in the year.  With clean energy quickly gaining market and political acceptance - and with Hurricane Sandy exposing the need for off-the-grid stand-alone power - FuelCell could be positioned for a resurgence. 

Even after Friday's spike, FCEL shares may be trading at an attractive level, based on future potential and past trading trends. 

Roundup:  Aside from the cliff negotiations, it could be a slow week.  Not much is expected in terms of economic indicators so it'll be a week of headline watching and playing some trades, should they come up.  As the days inch on - and with 2012 working days in Washington dwindling down to nothing - then investors will be getting more and more nervous at the prospects of the fiscal cliff being implemented.  By voting in November to keep the powers-that-be in Washington at status quo on both sides of the isle, voters essentially put it to the task of the politicians to find some middle ground; now let's see if the egos and affiliations can be put aside to come up with a plan that the people want.  In closing, let's take the time this week to remember those that need remembering and to appreciate family and friends the way we should - too often these days are we forced to remember that mortality is all too fragile.  Quickly, it puts things into perspective, at least for those who pay attention.

Disclosure:  Long AMRN, GE, CPST, FCEL, TTNP.

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Monday, December 17, 2012

Stock Watch Thursday, 13 December: RIMM, AMRN, GILD, YMI, TROV, ONVO, PFE, UTHR

Wednesday was a prime example of the finicky trading environment that we're dealing with these days.  The markets spiked at the mid-day point when comments from the Fed indicated that interest rates would remain low until unemployment numbers hit 6.5%, but stocks quickly gave back their gains and traded relatively flat by the market close when projected GDP growth numbers were modestly revised to the lower.  Adding to the reversal of the mid-day spike were headlines that started circulating painting another picture of a stark divide between the White House and Congress regarding budget negotiations - as if the daily flip-flop of tone wasn't getting old yet.

The Fed meeting provided a couple of days of distraction, but for the remainder of the year - or until a fiscal cliff deal is reached (whichever comes first) - the markets are likely to trade in tune with whatever the headlines are telling us that day.  As the cliff deadline approaches without a deal being reached, however, investors could start bailing out into cash, which could coincide with tax-loss selling and lead to a pronounced drop.  If the talks result in a budget deal over the short term, then predictions of a December rally may actually come to fruition.

It's best, in my opinion, to prepare for both eventualities by still playing the trades and keeping a nice chunk of free cash on hand to take advantage of a potential all-out drop.  As we await resolution on the cliff, days like Wednesday will make the traders happy.

As those stories continue to play out, here are a few stocks to keep an eye on for the day, if not for remainder of the week...


Shares of Research In Motion (RIMM) began a furious rebound last month when National Bank analyst Kris Thompson revised his price target of the company to $15, up from a previous target of $12, right about the same time Jefferies & Co. also raised its target on RIMM.  The move higher and the positive reinforcement from analysts was a clear sign that the company had fallen back into the good graces of investors as the pending release of the BlackBerry 10 quickly approached.  Another six percent move higher on Wednesday placed RIMM shares as a clean double since their September lows.  Not a bad rebound story.  Given that shares have jumped that high so quickly, however, investors may look to take some profit from the table.  While the RIMM stock price rebound has been a solid one supported by analyst attention, the company still needs to prove that it will be able to execute a rebound in BlackBerry sales in a tough smartphone market - and that will be no easy task.  To do so, RIM is essentially going back to its roots - business enterprise - before all-out targeting the consumer market again.  BlackBerry still remains a very popular brand overseas, but it has lost luster in the US with the rise of Galaxy, Android and iPhone technology.  Gaining traction in business again could give the company the foundation to launch a revival of its brand.  It may be unrealistec to expect this stock to achieve its past highs anytime soon, but a better-than-expected launch combined with some hype may be able to push shares towards the twenty dollar mark, but it'll also be wise to watch out for some profit-taking leading into the close of 2012. 

Healthcare, Biotech, Pharmaceutical:

Amarin Rebounds by Five Percent

Amarin Corporation (AMRN) is a company that needs to be watched daily these days, whether it's to play the price swings as a trader or to evaluate every move in what seems to be an ongoing chess game between the company and its potential suitors.  Throw into the mix the various media outlets which practically every day wish failure on the company - for the sole purpose of patting themselves on the back - and you've got some drama pretty good drama playing out, probably on par with a Lindsay Lohan night out.  Well, maybe not drama that good.

After continuing a drop that began last week when the company announced it would go-it-alone for the Vascepa launch - an announcement that was accompanied by a non-dilutive financing deal for $100 million - AMRN shares rebounded on Wednesday and closed the day up by five percent.  The move higher was not accompanied by any major news release, but it could have been a sign that some short sellers are covering in order to take some of their own profits off the table.  It may also be relevant to believe that Gilead Sciences' (GILD) surprise buyout of YM Biosciences (YMI) on Wednesday fueled speculation chatter throughout the entire sector, which would immediately bring more attention to Amarin, being high on the buyout rumor list for months.

Also of note, Amarin filed its 8k in reference to the financing deal on Wednesday, too, providing confirmation of the announcement contained in last week's press release.  Still, New Chemical Entity (NCE) status for Vascepa is the hot item right now. 

Positive Coverage Initiated on TrovaGene

We mentioned TrovaGene Inc (TROV) yesterday as a stock to watch because of its double in price over a relatively short period of time and also the company's pipeline of diagnostic tests that have demonstrated the ability to effectively detect the presence of various cancer types and infectious diseases through simple urine samples.  Shares jumped again on Wednesday by over six percent when Aegis Capital initiated
coverage of the company with a rating of 'Buy.'  The announcement likely attracted some new investor interest as volume jumped to nearly double the daily norm.  The encouraging analyst coverage is likely related to the pending commercialization of a few of TrovaGene's diagnostic tests set for 2013, the first of which - a diagnostic able to detes KRAS mutations through urine samples is slated for a January 2013 launch.  As another Seeking Alpha author noted on Wednesday, too, TrovaGene's patent portfolio may hold a very significant inherent value in itself, paving the way for more lucrative partnership discussions if the market begins to accept the technology on a broad scale.  With commercialization pending over the near term, a growing pipeline of potential and with enough cash on hand to last well into 2013, TROV may have some more room to run.  Volume to this point is not on the scale that indicates widespread attention just yet.

Organovo Holdings Holding Steady Through Market Volatility

Another company developing a novel and potentially ground-breaking technology is Organovo Holdings (ONVO).  While the markets have been moving significantly higher and lower during over the past weeks in line with the news releases of the day, ONVO has held fairly steady without much fanfare.  Volume has been more volatile than price during that time, however, indicating that some investors may be building or consolidating positions in preparation for a potentially active 2013.  TrovaGene has developed the NovoGen MMX Bioprinter, a technology that uses live human cell samples to generate 3D "bioprints" of human tissue.  Once generated, these 3D prints can then be used as disease models that enable therapeutic drug discovery and development.  With the ability to print living tissue in desired shapes and functions, Organovo could potentially put this technology to use in generating organs for patients awaiting transplants, further on down the road.  In developing a technology with such scientific implications, Organovo has already enlisted the collaboration of both Pfizer (PFE) and United Therapeutics (UTHR).  The evolving relationships of both partnerships will be worth watching moving into the new year as UTHR currently retains the option to acquire a license from Organovo in relation to the results of the ongoing collaborative effort.  Such a license - if the option is enacted - would provide Organovo with up-front cash money and a future revenue stream from royalties paid. 

Organovo will also, of course, look to bolster its financial position through additional partnerships.  Through the Zacks model, such deals could come with up-front money at around a million bucks/per - an increase over the up-front money associated with the Pfizer and United deals - with more significant milestone payments possible and a modest royalty stream on the back end.  As of the most recently announced financials, Organovo is sitting on about eight and a half million in cash, leaving the company on track to fund its way through the better part of 2013, assuming the current burn rate continues.  While dilutive financing events are always a threat for still-developing companies, investors will also be watching for any announcements of new collaborative efforts that would land immediate, up-front money.  Such events would not only provide additional validation of the technology through the partnership itself, but they would also win over investors who are always looking for reasons to validate (or not) a company's management team.

Could be one to keep on the radar for the coming quarters and potentially one to accumulate for the mid to long term on any dips.

Roundup:  The mood heading into Thursday's open looks similar to the market close on Wednesday - flat.  There will be few distractions from the cliff negotiations moving forward and the markets should continue to trade in tune with whatever Anderson Cooper and gang have to say at any given time.  There's likely to be some selling later on in the month, regardless of a deal or not, because whether the politicians acknowledge it or not, some investors will look to consolidate holdings based on planned 2013 tax increases.  Maybe the Wilpons can find an outfielder for the Mets as some of those holdings are sold, or maybe we can just suit up Bobby Bonilla and throw him in left, since we're still paying that guy's salary.

Happy Trading!!!

Disclosure:  Long AMRN.

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Saturday, December 15, 2012

Stock Watch Wednesday, 12 December: ONTY, DNDN, TROV, AMRN, PBTH, TEVA, YUM, MCD, GILD, YMI

Fiscal cliff talks continued on Tuesday as the US President and House Speaker appeared to be inching closer to an agreement that would avert a fiscal calamity at the new year, but all eyes on were on the Fed meeting Tuesday and will likely remain there on Wednesday, too.  Investors keyed in on the possibilities of new stimulus following the meeting and liked what they saw, as the DOW rose by nearly eighty points.  Whatever merry mood may prevail following the meeting, however, could disappear quickly if cliff negotiations start to become tense again.  Current trading patterns indicate that investors who were flying in a holding pattern awaiting a cliff outcome may now be judging the situation a little more positively than before.  Again, that could all change in a heartbeat as there are few working days left inside the beltway before the new year will be upon us - with or without a deal.

As those stories continue to play out, here are a few stocks to keep an eye on for the day, if not for remainder of the week...

Healthcare, Biotech, Pharmaceutical:

Oncothyreon Jumps Fourteen Percent

Shares of Oncothyreon Inc. (ONTY) jumped by fourteen percent on Tuesday with no news released in conjunction with the move.  Volume was over three times the daily norm.  ONTY has been a stock to watch during late 2012 due to the expectations of a first quarter results release from a Phase III trial measuring the effectiveness of the company's cancer immunotherapy treatment, Stimuvax, in treating non-small cell lung cancer.  Stimuvax is partnered with Germany's Merck KGaA (MRK.F).  Shares had declined earlier in the year when an an independent data monitoring committee recommended that the trial continue because many investors took that as bad news since, in their eyes, had the data looked positive, then the committee would have suggested halting the trial early in order for Stimuvax to go before the FDA sooner.  Shares have had their ups and downs since, but have traded for below five bucks for most of the time since.  Before Tuesday's run, shares had dipped below the four dollar level.

Some speculation into this week's price move revolves around bullish options trading, but it was also just a matter of time before ONTY started to run leading into the results release, given the trends of the sector.  With that said, options trading and run-ups into news - while encouraging at first look - are not definitive clues as to whether or not a trial is successful, so many investors of the sector have learned to trade with caution in such situations and to sell at least some trading shares into the pre-news spike in order to turn paper gains into actual bottles of Grey Goose.

We're likely to see a run higher over the coming weeks, assuming stable market conditions, and ONTY could rise very significantly if the results are positive.  Although hanging out in the doldrums now, Dendreon (DNDN) became about a monster gainer when Provenge Phase III results were positive years ago, given the spotlight received by cancer immunotherapy stocks at the time.  Because of Dendreon's woes in marketing the product, however, expectations of an ONTY rise may be tempered.  A run worth watching, and put the Stimuvax results on the first quarter 2013 watch list.

Gilead Buying YM Biosciences

Gilead Sciences (GILD) was already on the newsmaker list this week when the company announced that it would conduct a two-for-one stock split early next year, but the company made news again on Wednesday with the announcement that it would buy YM Biosciences (YMI) for over half a billion dollars.  It's already been a stellar year for GILD and what better way to top it off than boost the pipeline with an acquisition or two for relative chump change.  The deal came at a significant premium for YMI and shares traded in kind, up by eighty percent during premarket trading.  For YMI shareholders, such are the potential rewards for investing in the speculative still-developmental companies and Amarin shareholders may be looking at this deal with envy right now.\

Trovagene Doubles In Price

Since we mentioned TrovaGene Inc (TROV) as a stock to watch earlier in the year shares have more than double at times and close the day Tuesday at $4.61 after hitting as high as five bucks during intra-day trading.  Fueling the fire has been the company's line of diagnostic tests that have demonstrated the ability in early studies to effectively detect the presence of various cancer and infectious diseases through simple urine samples. Such a technology, should it be proven effective over the long run, could provide significant relief on a global health care system that is currently over-burdened with high costs and highly-intrusive procedures for both detection and treatment, such as biopsies and blood tests.

Volume and price have both been on the move, too, since the company conducted a stock offering in late November and followed-up with significant news on the pipeline front.  During the closing days of the month Trovagene announced the "successful development of its first molecular diagnostic test capable of detecting KRAS mutations from a urine specimen."  This milestone event served as validation of the previous price spike and also positioned the technology as commercially viable.  Also according to the press release, "Transfer of the transrenal KRAS test to the company's CLIA lab is expected to be completed in December 2012 with commercial availability expected in January 2013."

Trovagene has also continued to build its collaboarative efforts around the globe and could draw additional investor interest as results from ongoing trials start to roll in and new ones are initiated.  Aside from the latest development, Trovagene's near term future also inclued a trial later that will test its proprietary diagnostic technology in identifying pancreatic cancer by means of a patient's urine sample. Should the combination of news include positive interim results, trial initiations and the commercial availability of the KRAS-detecting mutations, then TROV could potentially be positioned for a continued run-up. 

TROV has proven over recent history to be a solid stock to trade and/or accumulate into the spikes and dips, and as with all such stocks, it may be wise to take some money from the table into significant moves as we've seen here.  That said, a core position can be maintained in order to play the long term potential of the technology. 

With as significant a move as TROV has realized in a relatively short period of time, and with pipeline catalysts still underway, this is one to keep an eye on.

Amarin Drops To Nine Bucks

Shares of Amarin Corporation (AMRN) continued their downward trend on Tuesday, following last week's announcement that the company would go-it-alone (GIA) with the commercial launch of Vascepa in the treatment of very high triglycerides.  Many investors expected a buyout or major partnership over the GIA strategy and investors may view the launch with greater risk now since new drugs marketed without the help of big pharma often take a little longer to catch on.  Some, in fact, never do catch on - hence the continued move lower on the news.  As investors still await news on the New Chemical Entity (NCE) status for Vascepa, the company announced on Wednesday morning the addition of David Stack, President and Chief Executive Officer of Pacira Pharmaceuticals, has joined Amarin's Board of Directors as an independent director.  Since a major partnership was not announced, this looks to be a move to bring in additional industry experience to advise and influence the pending launch.  By no means was this press release the news many investors have been waiting for and should be viewed as not much more than additional confirmation that there may not be any immediate deviations from the GIA strategy.  That said, NCE could change everything as its been noted before that it is an issue with ongoing buyout and/or partnership negotiations.

In regards to the drop, this story, again, reminds me of the GlaxoSmithKline (GSK) buyout of Human Genome Sciences a while back - HGSI had traded to unsuspecting lows before being scooped up for twice the price of where it was trading. The final deal was less than many long investors had expected or hoped for, but in the end the premium was still money. Amarin, too, may be swept up for prices below what many were expecting, but at the end of the day, any deal would still likely come with a pretty hefty premium.

Prolor Spikes Above Five

Prolor Biotech (PBTH):  Prolor Biotech may be worth keeping an eye on as shares jumped over the five dollar mark again on Tuesday for the first time since early November.  Prolor had been gaining attention earlier this year for its naturally-occurring Carboxyl Terminal Peptide (CTP) technology, which can be attached to already-existing therapeutic proteins in order to slow the process by which the protein is removed from the human body and thereby create an extended life span for an already-existing treatment. This process significantly reduces the amount of injections or applications a patient would need to endure during the course of treatment.  Prolor has put the CTP technology to work in its hGH-CTP, an extended-life treatment that early results have shown could replace seven once-daily injections with a once-weekly injection of hGH for hormone deficient patients.  While late-stage adult trials are ongoing, another sign of validation was given the technology with the initiation of a Phase II pediatric trial in Europe.  European regulators need to be essentially overwhelmed by trial data in adults before approving a trial in children, therefore allowing this trial could indicate that they were, in fact, wholly convinced in the adult data presented. 

With key catalysts potentially pending, such as interim and actual trial results during the upcoming year, PBTH is worth keeping an eye on, especially if it looks like the recent push higher will gain momentum.  The hormone deficiency market registers in the multi-billion dollar range, indicating that the hGH-CTP could quickly start raking in significant revenue, if approved for such an indication.  It's also worth noting that Teva's (TEVA) Dr. Phillip Frost is already heavily invested in PBTH and that connection is intriguing because, which is already linked to other buyout rumors, could also be considered as a potential buyer of Prolor.


YUM! Follows in the Footsteps of McDonald's

In following the course set by McDonald's (MCD) shares earlier this week, shares of Yum! Brands (YUM) spiked by over a buck on Tuesday and were trading higher yet again by a percentage point during the pre-market on Wednesday.  Yum's rebound began last week when investors took remarks made by company officials at a shareholder meeting as more encouraging than previous comments about slowing growth in China that led to a one-day drop of ten percent drop in YUM shares when the earnings warnings were initially made.  The rebound in share price is a welcome event for those that bought into the ten percent drop as this company's brands have been known to do well, even in weak economies, and are still demonstrating growth in numerous overseas markets.  While large caps such as this one often don't wet the appetite of the more speculative investor, those with a long term or retirement portfolio, do start looking at potentially less-stressful investments with money made from the hair-greying speculative ones.  YUM may fit that bill.  As mentioned recently, as well, it may worthwhile to bear in mind that trading the 'buy and hold' stocks (YUM) at opportune trading points could pay off just as well as the trading of stocks in our more speculative portfolios.  The percentage gains may not be as great, but throw in the dividends and the extra sleep one can get with less-stressful trading and it could be a more preferable strategy for many.  This strategy still one to build a portfolio towards holding for the long term, but also allows one to secure profits when possible in order to re-invest on the dips, and can also be more profitable than 'averaging down' over the long run.  Because significant percentage moves in the large caps often take quite a while to play out - at least in a normal, less volatile market - the trading is spread far apart and is preferable to the daily or even weekly trading that those with day jobs often don't have the time for.

YUM may also be moving as a result of positive Jim Cramer coverage.

Roundup:  Headlines circulating early on Wednesday indicate some pessimism over the fiscal cliff deal, so it may be likely that the move higher this week could start to stall, although the markets did open modestly higher on the day.  The GILD/YMI deal gave investors a jolt in the biotech/pharmaceutical sector which will likely lead to speculation as to who might be bought-out next.  The focus again Wednesday is the Fed meeting, although some discouraging economic data from overseas markets may also be digested with caution by investors.  I'm still liking the strategy of trading into any current rallies in preparation for a potential fiscal cliff fallout.

Happy Trading!!!

Disclosure:  Long YUM, MCD, AMRN.

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Friday, December 14, 2012

Stock Watch Tuesday, 11 December: MCD, YUM, DNDN, JNJ, AET, MDVN, SNY, INO, MRIC, SI, BSX, CLDX

Stocks traded relatively sideways during the opening day of the new trading week as investors continued a holding pattern while fiscal cliff negotiations progress behind closed doors in Washington.  Some took it as an encouraging sign that US President Barack Obama and House Speaker John Boehner were sitting at the same table, but most are taking an "I'll believe it when I see approach" to the situation and holding fast since both sides still looking to be standing fast on some key issues.  What complicates matters, too, is not just the uncertainty of the negotiations, but that a political game of chess is also being played, with each side consistently trying to gain the upper hand in the court of public opinion.  With that in mind, it's still a good idea to expect volatility and hold some cash on the sidelines in case things go south as we approach the cliff deadline.

Other than that there were no significant economic data released on Monday on which to dwell, so all eyes will be on the Fed meeting, starting today and heading into Wednesday. 

As those stories continue to play out, here's a few stocks to keep an eye on for the day, if not for remainder of the week...


McDonald's Rebounds On November Sales Numbers

Shares of McDonald's (MCD) started to rebound on Monday from their recent lows when reports hit the wires that the company's global comparable sales were up by 2.4% for the month, while same-store sales in US were up by 2.5%.  Both McDonald's and Yum Brands (YUM) were identified as potential rebound plays to watch as both dropped over the past weeks on weaker-than-expected earnings and/or weakening forecasts.  MCD closed the day up by a percentage point on Monday and - being arguably the recognized leader of its sector - is always one to consider on the dips for the long term or retirement portfolio.  Bear in mind that its also wise to trade the 'buy and holds' (such as MCD and YUM) in a long term portfolio at opportune trading points, too, just like we do with holdings in the more speculative portfolios.  That strategy still allows one to hold for the long term, but to also secure profits when possible in order to re-invest on the dips, and can also be more profitable than 'averaging down' over the long run.  Because significant percentage moves in the large caps often take quite a while to play out - at least in a normal, less volatile market - the trading is spread far apart and is preferable to the daily or even weekly trading that those with day jobs often don't have the time for.  Both of these stocks could find themselves dropping again should the market head south over this fiscal cliff stuff, but the potential for an eventual rebound would still be there.  MCD shares were rolling higher again in the pre-market hours on Tuesday.  Worth watching.

Healthcare, Biotech, Pharmaceutical:

Dendreon Pushes Through Five

Dendreon (DNDN) shares pushed through the five dollar mark on Monday for the first time since early November when news circulated that Johnson & Johnson (JNJ) won expanded approval from the FDA for use of its prostate cancer treatment Zytiga in pre-chemotherapy conditions.  DNDN's resulting bounce may have had little to do with the Zytiga news since the stock has spiked to five on multiple occassions over the past months, but volume kicked in at double the norm on Monday, indicating that the spike was likely related.  Some investor optimism surrounds the potential for both Zytiga and Dendreon's Provenge to work hand-in-hand in pre-chemo indications and if that's the case, then Provenge sales may receive a boost as well.  Regardless of the news driving Monday's price movement, DNDN has also made a decent late-year trade.  Shares reached highs this week that were roughly forty percent higher than November's open as some are keying in on 2013 as a potential rebound year for the once ten-bagger stock.  The positive speculation is based mainly on the company's recent cost-cutting measures and expanded coverage by Aetna (AET), which could lead to other insurers following suit and a boost in Provenge sales. 

While the JNJ news could benefit Dendreon for the reasons listed above, the company's pipeline and a European approval should also be considered as potential growth factors later on down the road.  Also consider that the company will face competition from Medivation's (MDVN) Xtandi and Sanofi's (SNY) Jevtana, too.

Until a rebound is in full effect in terms of sales numbers, DNDN will likely continue to provide investors with ample trading opportunities - and there's definitely something to be said for that.

Inovio Reports Positive Interim Data

Inovio Pharmaceuticals (INO) recently released two rounds of encouraging trial data and could be a stock to watch based on a deep pipeline that includes nine programs in development, three of which are in Phase II stages.  The first round of news came in early December when the company announced positive interim results from a Phase II leukemia trial that is investigating the use of Inovio's proprietary electroporation technology in delivering a WT1 DNA vaccine into patient cells.  Electroporation, as previously discussed, uses small electrical pulses to inject therapeutic treatments directly into damaged or infected cells.  The electrical pulses then cause the cell wall to harden, creating a condition where the treatment becomes 'trapped' inside, which therefore makes it more effective, as little can escape.  Early studies have proven the worth and potential of this technology and the leukemia trial data serves as validation. 

Another update came last week in regards to Inovio's SynCon vaccine platform, which produces synthetic vaccines to treat various infectious diseases and cancer types.  From this platform the company has developed an experimental universal flu vaccine that could someday replace the standard flu shot that treats only one strand at a time.  The flu-based SynCon vaccines are earlier along in development, but interim results from an ongoing Phase I trial demonstrated that "a single dose of INO's H1N1 universal SynCon flu vaccine followed with a dose of a seasonal flu vaccine generated protective immune responses in 40% of trial subjects compared with a 20% response rate in elderly patients who received the seasonal flu vaccine alone."  These results, which effectively double the effectiveness of the current standard-of-care, uderlie the potential of the SynCon platform.

Even with the encouraging trial results, INO shares have slipped over the past couple of weeks after having spiked back in October on similar encouraging news.  Shares are worth watching for a potential rebound as INO may be testing a previous bottom at this point, but with a deep pipeline that is advancing with success, this will be a story to watch.  The company's pipeline is still not in the latter stages of development, however, so volatility will be ripe along the way and dilutive financing is always a risk with these developing companies.  That said, six of the nine programs in development are already funded by third parties, according to documents contained on the Inovio website, which alleviates some financing concerns moving forward and also validates INO's technology and ability to attract collaboration.

Also Noteworthy:

MRI Interventions (MRIC) has dipped to recently-traded lows and could be one to keep an eye on as this stock has provided numerous trading opportunities from these levels over the past few months.  Volume rolled in and shares responded to news last month that the company had received the "2012 Global Company of the Year Award in Image-Guided Neural Interventions by Frost & Sullivan," but the stock continued to trickle downwards amid the broad market uncertainty.  This could be opening an opportunity for investors to either average down or accumulate for the future with an eye towards the development of the company's ClearPoint and ClearTrace MRI-enhancing systems, which provide medical professionals with real-time imagery during complicated procedures on the brain and heart, respectively.  As noted previously, MRIC has noted significant growth over the past few quarters and recently boosted its sales force in order to support plans of more growth into the brain surgery sector both in the United States and Europe.  A trading and/or accumulation point could be developing here as investors await next quarter's report to confirm a now-established growth trend.  It's also worth noting that this company has already demonstrated to build high-powered support for its technology, as partnerships with Siemens AG (SI), Boston Scientific Corporation (BSX) and Brainlab have already been secured.

Gilead Sciences (GILD) has been on a roll this year, currently trading at more than double its 52-week low, and investors were rewarded yet again on Monday as the company announced approval of a two-for-one stock split to be implemented next month.  Shareholders holding shares on 7 January will be able to partake in the split, according to Monday's press release, and shares will begin trading on the 28th of the same month.  Gilead has successfully continued to register growth in its robust pipeline of HIV-treating drugs and had also acquired Pharmasset earlier in the year for its pipeline product potential.  Two-for-one splits are rarely a bad deal for investors, unlike reverse splits, although the company will still need to demonstrate growth for investors to really cash in. 

CellDex Therapeutics (CLDX) gapped higher on Monday and trading volume remained strong for the day as the comapny announced positive Phase II survival data for breast cancer patients being treated with CDX-011.  Oppenheimer reiterated its 'outperform' rating on the stock as a result and boosted its price target to $10 from $8.  CLDX is another example of the quick profits that can be secured in the cancer immunotherapy market, but traders should also consider the inherent volatility of the sector and bank at least some 'trading share' profits into spikes such as this one, in my opinion.  To follow up Monday's solid news release, the company also announced on Tuesday morning that its CDX-301 was well tolerated and effective enough in Phase I studies to continue product development in treating a number of indications, including hematopoietic stem cell transplant and cancer immunotherapy.  In kind, shares were up another six percent in the pre-market Tuesday.  Still a story worth watching.

Roundup:  Tuesday looked to be a green day for the markets early-on as early headlines emphasized encouraging progress in the fiscal cliff negotiations and optimism from the Fed, but a large-scale rally is still not likely until a cliff deal is reached.  Any guessing as to what happens before that is pure speculation, so take the daily-changing headlines with a grain of salt as the media just likes to create jangle when it can.  Additionally, economic reports from Japan and Europe have not been the brightest of late, which is another item to consider leading into the tax-loss selling period.  As has been the case for the better part of the year already, in my opinion, utlizing those trading shares while holding onto a core position is the name of the game in order to bank profits and have some cash on the sidelines to jump on any broad market dip like Eli jumped all over New Orleans this weekend.

Happy Trading!!!

Disclosure:  Long MCD, YUM.

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