Amergence Surges after Initial Advertising Campaign
Amergence Group (AMNG, Free Analysis), a provider of products and services focused on the medical marijuana industry, surged more than 60% during today’s session after dropping its first advertisement in the Phoenix Times yesterday. The advertisement was geared towards qualified residents wishing to own their own dispensaries, while also joining a larger organization that has begun expanding nationally.
Investors are hoping that the advertisement will help generate revenues for the emerging medical marijuana company, but they should be aware that it has not generated any net income and accrued a net loss of over $157,000 during the three months ended December 31, 2010. Meanwhile, the firm’s current assets of just $885, as of December 31, 2010, suggest it may need to raise more capital.
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Blockbuster Jumps after Icahn Bids on Assets
Blockbuster Inc. (BLOAQ, Free Analysis), a bankrupt provider of video rentals through a nationwide chain, jumped more than 20% during today’s session after the Wall Street Journal reported that billionaire investor Carl Icahn would bid on the company’s assets along with Dish Network. The company had filed Chapter 11 bankruptcy in September with about $900 million in debt.
Despite existing bids of $290 million and the new potential bids, unsecured creditors and investors are not likely to recovery anything from the bankrupt video company, as it posted some $900 million in debt when filing for bankruptcy. Meanwhile, there have been rumors that the new bids were relatively minimal, coming it at around $297 billion.
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Global Aircraft Triples after Favorable Mention
Global Aircraft Solutions Inc. (GACFQ, Free Analysis), a bankrupt holding company of aerospace-related companies, more than tripled during today’s session on heavy volume after being favorably mentioned in a popular investment newsletter. The newsletter cited a technical breakout as the reason behind today’s move, while stressing that there is little fundamental support behind the spike.
While traders may still be actively engaged in the aerospace holding company, investors may want to steer clear given the fact that the company is in bankruptcy. Meanwhile, very few financial details related to the bankruptcy process have been filed, with the latest SEC filing being made in April of 2009, nearly two years ago, making it a difficult company to assess.
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Rudolph Technologies Gets $17/Share Price Target
Rudolph Technologies Inc. (RTEC, Free Analysis), a developer of software systems for semiconductor manufacturers, was initiated with a Buy rating and a $17.00 per share price target by DA Davidson ahead of the opening bell. At a significant 54% premium to the current market price, the analyst’s recommendation represents a very bullish outlook on the company’s outlook.
In early March, the software developer was also favorably mentioned by Stifel Nicolaus analysts, who believe that it has a number of short-term and long-term catalysts, after meeting with the company’s CFO. The analyst maintains a Buy rating and a $14.00 per share price target on the name.
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Companhia Brasileira de Distrib. Upgraded to Strong Buy
Companhia Brasileira de Distrib. (CBD, Free Analysis), a Brazil-based food retailer that also has a retail segment, was upgraded to a Strong Buy from an Outperform by Raymond James ahead of the opening bell. Notably, today is also the ex-dividend date for the stock, which has led to significant volume over the past few sessions, as investors get in for the 0.95% distribution.
While the food retailer trades with a price-earnings multiple of around 33.8x its trailing EPS, it has experienced significant 48.2% quarterly growth year-over-year. However, investors may want to take note of the firm’s significant levels of debt, which yield a relatively high debt-to-equity ratio of 87x, with more than $5 billion in long-term debt recorded on its books.
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CIGNA is Undervalued by 15-70% based on Sum-of-Parts
CIGNA Corporation (CI, Free Analysis), a global health service organization with numerous subsidiaries around the world, may be undervalued by between 15% and 70% on a sum-of-parts basis, according to Deutsche Bank. The analyst raised its price target and finds the risk/reward ratio to be very attractive at current levels after conducting a sum-of-parts analysis on the stock.
The U.S. health insurance sector has also begun to improve after experiencing a sharp decline last year amid government-related uncertainty. However, the Financial Times now suggests that the outlook for big insurers has brightened, as rising profits, dividends and stock prices indicate that there is little to worry about from the passage of the healthcare bill.
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Cannabis Science Spikes after Government Report
Cannabis Science Inc. (CBIS, Free Analysis), a biotechnology company focused on pharmaceutical cannabis products, spiked higher late during today’s session after a U.S. government issued report indicated that the treatment of cancer with cannabinoids goes beyond the simple treatment of symptoms and side-effects by exhibiting possible anti-tumor activities.
Investors are hoping that the favorable report helps solidify the cannabis company’s claims, but they should be aware that it has not generated any revenues and has posted a loss of more than $58 million since its inception in January of 2005. Meanwhile, the firm’s total assets of $88,612 are outpaced by more than $1.2 million in current liabilities, suggesting it may need to raise additional capital soon.
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CytoSorbents Soars after European Regulatory Approval
CytoSorbents Corporation (CTSO, Free Analysis), a developer of blood-purification technologies designed to combat sepsis and similar diseases, soared more than 130% during today’s session after receiving approval from European regulators for its flagship CytoSorb product. The CE Mark was awarded after the company was able to meet safety and label efficacy claim requirements.
Investors are hoping that the approval paves the way for E.U.-based revenues, but should be aware that the blood-purification technology develop continues to operate at a net loss, although this is common for early-stage biotech companies. Since its inception in 1997, the company has lost more than $83 million, while its balance sheet currently shows a $484,581 deficit, as of December 31, 2010.
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Luna Innovations Rises on Extended Relationship
Luna Innovations Incorporated (LUNA, Free Analysis), a sensing and instrumentation provider for the healthcare, telecommunications, energy and defense markets, rose more than 40% during today’s session after extending its agreement with Intuitive Surgical (ISRG) – a leader in medical robotics – to further integrate its shape sensing technology into Intuitive’s product lines.
Investors are hoping that the extended agreement will result in greater revenues, but they should be aware that the sensing and instrumentation company continues to operate at a net loss. During the quarter ended September 30, 2010, the firm’s revenues declined 3% to $8.6 million due to its technology development division, but its net loss narrowed significantly amid lower expenses.
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Online Resources Will Eventually Sell Itself
Online Resources Corporation (ORCC, Free Analysis), a provider of outsources web and phone-based financial technologies, will eventually sell itself, according to DA Davidson. After the board’s recent decision to forgo a near-term sale, the analyst believes that the ultimate outcome will be a sale of the company in one or two years.
Earlier this month, the analyst noted that, despite lower-than-expected fourth quarter earnings and ended discussions with potential acquirers, it believes that the outsourced web and phone-based financial technology company is in the early innings of a rebound that will enable it to sell itself in the future, and reiterated its Buy rating on the stock.
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Pharmasset’s Clinical Trials Could Unlock Value
Parmasset Inc. (VRUS, Free Analysis), a clinical-stage pharmaceutical company focused on viral infections, could see significant value come from its PSI-7977 clinical trials, according to Noble Financial. After initiating its Phase IIB clinical study, the firm said the RNA chain terminating mechanism of action and recent positive results indicate effective elimination of virus in all genotypes.
Given this potential to significant increase the compound’s value, the analyst rated the stock a Buy with an $80 per share price target, which represents a 3.7% premium to the current market price, after today’s 8.6% move higher. The biopharmaceutical company will host an investor meeting to discuss the progress on April 2nd at 2:00 p.m.
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Micron Should Benefit from DRAM Constraint
Micron Technology Inc. (MU, Free Analysis), a semiconductor manufacturer focused on producing DRAM, was favorable mentioned by Sterne Agee ahead of the opening bell. After Japan’s earthquake, the analyst believes that supply constraints are increasing in the DRAM market, which should lead to higher spot pricing, despite the firm guiding flat of pricing for the May quarter.
Other analysts also came out bullish on the semiconductor manufacturer after its latest earnings announcement. Stifel Nicolaus noted that the stock was one of its best ideas with a $17 per share price target, while Auriga believes that the risk/reward is skewed to the upside and maintained its Buy rating and $14 per share price target – all significant premiums to the current $11 per share price.
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Medical Marijuana Extends Rally Higher
Medical Marijuana Inc. (MJNA, Free Analysis), a provider of products and services focused on the medical marijuana industry, extended its rally by more than 45% during today’s session amid an extended breakout. Over the past five days, the stock has moved up more than 400% on heavy volume, supported in large part by favorable newsletter mentions and active traders.
The move stemmed largely from an announcement earlier this week that the medical marijuana company received an initial asset as well as a management contract transferred from the Hemp Deposit & Distribution Corp or CannaBANK, Inc. The firm expects to immediately benefit by receiving the debt-free income producing property from HDDC and expects to generate more than $40 million per year.
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Ambassadors Nearly Doubles after Breakout
Ambassadors International Inc. (AMIE, Free Analysis), an international cruise line operator under its subsidiary Windstar Sail Cruises Limited, nearly doubled after breaking out from a key technical level. The company’s stock had pushed below the $1 per share mark earlier this month and have since rebounded sharply amid a technical rally.
While today’s move has been driven by traders, the cruise line operator has also seen significant interest from investors, as indicated in recent 13D and 13G filings made with the SEC. Some investors believe the stock may be close to a turnaround after it reported improving financials last quarter. The firm’s revenues increased to $15.3 million, while its net loss narrowed to $587,000.
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Genta Jumps after Reporting 2011 Projections
Genta Incorporated (GNTA, Free Analysis), a biopharmaceutical company with a diversified product portfolio targeting cancer, jumped more than more than 40% higher during today’s session after reporting its Q4 and FY2010 results and offering some key projections for the future. Namely, the firm expects its Phase III melanoma survival data in April and additional data at the 2011 ASCO conference.
While these events could provide numerous catalysts, investors should be aware of the past difficulties facing the biopharmaceutical company. Moreover, the firm has recorded significant operating losses throughout its history and has a shareholders’ deficit of more than $11.2 million. As a result, it may need to raise additional capital over the near-term to sustain its operations.
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Brocade Shares Could Move Significantly Higher
Brocade Communication Systems Inc. (BRCD, Free Analysis), a supplier of networking equipment for organizations of all sizes, could move significantly higher, according to ThinkEquity. The analyst believes that the company has several strong upcoming positive revenue catalysts and suggested that the stock could increase significantly in upcoming quarters.
Earlier this month, the networking company announced a number of investments, including a $100 million evaluation program designed to enable eligible customers in the Asia Pacific region to quickly deploy Ethernet fabrics as the foundation for highly virtualized data centers. Ultimately, the firm is hoping that this move will help drive adoption over the long-term.
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Analysts Debate Cephalon’s Potential for More Bids
Cephalon Inc. (CEPH, Free Analysis), a biopharmaceutical company focused on improving the quality of human life, has analysts divided on the potential for additional bids. Analysts like Oppenheimer and Gabelli expect Valeant or someone else to buy the company for $80 per share, while analysts like Barclays and RW Baird do not expect any competing bids and recommend selling into the strength.
Currently, shares of the biopharmaceutical company are trading at around $75 per share, which is higher than the $73 per share offered by Valeant. The company indicated earlier today that it would commence an analysis of both alternatives presented by Valeant and work with its financial advisors to review and potentially accept the offer in due course.
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Nuance’s Multiple Could Expand with Many Catalysts
Nuance Communications Inc. (NUAN, Free Analysis), a provider of voice and language solutions for businesses and consumers around the world, should receive a higher multiple over the next 12-18 months, according to FBR Capital. The analyst believes that increased deal activity in the healthcare and mobile verticals should boost the stock, while it reiterated its Outperform rating and $22 price target.
The voice and language solutions provider’s stock moved sharply higher during today’s session after FBR Capital and Soleil both indicated their beliefs that it has signed a license agreement with Apple for voice commands on the Apple iPhone. Moreover, the analysts believe that the relationship is much greater than the street realizes and that the technology will play an important role in Apple’s IOS 5.0.
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Mammoth Energy Extends Rally on Favorable Mention
Mammoth Energy Group (MMTE, Free Analysis), a developer and operator of strategic mining energy reserves in locations around the world, rose more than 30% during today’s session after being favorably mentioned in a popular investment newsletter. Traders pushed the stock sharply higher on volume of about 244 million shares, compared to average volume of 124 million shares.
Recently, the mining company signed a letter of intent with Salt Gold Inter Chile Limitada, which has concessions located in the Salar de Marcunga region. However, investors should be aware that the company generated no revenues and incurred a net loss of more than $2,511 during the quarter, while its shareholders’ equity levels remained at a negative $4,206, as of September 30, 2010.
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MC Endeavors Jumps on New $18 Million Project
MC Endeavors Inc. (MSMY, Free Analysis), formerly Mees Masonry, a provider of power generation technologies, jumped more than 22% during today’s session after announcing a new $18 million project from its newest subsidiary ENGENAIRE Inc. using another proprietary multi-fuel generator product that will revolutionize the commercial power industry by allowing generators to run in parallel.
Investors are hoping that this new project will result in sustainable long-term revenues, but they should be aware that the power generation company generated a net loss of $34,483.99, during the period ended September 30, 2010, its last report to the OTC Markets. As a result, investors have yet to discover the true potential of the new power generation business.
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ProPhase Labs Breaks Out from Key Technical Level
ProPhase Labs Inc. (PRPH, Free Analysis), a provider of homeopathic and health products, jumped more than 30% during today’s session after breaking out from a key technical level and being featured in a popular investment newsletter. Traders sent the stock sharply higher on volume of more than 610,000, compared to average daily volume of just 24,160 shares.
Despite the optimism surrounding the shares, investors should be aware that the healthcare company reported revenues that dropped nearly 27% in 2010 compared to 2009, with a net loss of more than $3.5 million, or $0.25 per share. However, the firm’s balance sheet showed shareholders’ equity of some $13.4 million, which is a positive sign for long-term investors.
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Amkor Initiated with a Buy at Sidoti
Amkor Technology Inc. (AMKR, Free Analysis), a subcontractor of semiconductor packaging and test services, was initiated with a Buy rating and $10.00 per share price target at Sidoti ahead of the opening bell. At a significant 45% premium to the current market price, the analyst’s price target reflects a very bullish stance on the company’s future outlook.
While the semiconductor company experienced some damage from Japan’s recent earthquake, the company anticipates re-opening once the power situation is stabilized and necessary repairs are made. However, that operation is the company’s smallest and impacts only about $10-11 million in monthly sales, according to a recent press release.
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GSI Commerce Could See Amazon Bid
GSI Commerce Inc. (GSIC, Free Analysis), a provider of e-commerce and interactive marketing solutions for B2C businesses, could see a competing bid from Amazon.com or Alibaba, according to Caris. The analyst views the likelihood at about 40%, after eBay’s previously announced acquisition that took place at a roughly 50% premium to the pre-announcement price.
Earlier this week, eBay announced that it agreed to acquire GSI Commerce for $29.25 per share in a transaction valued at approximately $2.4 billion. Under the terms of the agreement, eBay will divest GSI’s licensed sports merchandise business and 70% of ShopRunner and Rue La La – seeing these as non-core to its long-term strategy – which will be sold to a newly formed holding company.
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Trius Initiated with a Buy at Ladenburg
Trius Therapeutics Inc. (TSRX, Free Analysis), a biopharmaceutical company focused on developing antibiotics for life threatening conditions, was initiated with a Buy rating and $10.00 per share price target at Ladenburg ahead of the opening bell. At a significant 87% premium to the current market price, the analyst’s price target reflects a very bullish stance on the stock.
Earlier this month, the biopharmaceutical company completed enrollment in its Phase III clinical trial for the oral dosage of torezolid in acute bacterial skin and skin structure infections. With trials expected to be enrolled this year, the company expects to begin receiving top-line data in early 2012, while it is also working to initiate a second Phase III ABSSSI trial for the IV to oral step-down dosing.
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Ocean Bio-Chem Jumps on Promising Results
Ocena Bio-Chem, Inc. (OBCI, Free Analysis), a manufacturer and marketer of maintenance and care products for marine and other products, jumped more than 50% during today’s session after reporting record net income of over $2 million – a 92% increase over a year ago – and earnings per share of $0.26, after successfully implementing its previous sales and marketing plans.
In addition to the sales increases, the marine company also recorded record gross margins of 34.2% and record gross margin dollars of $9.4 million, indicating that its sales shifted towards higher-margin goods and that its production efficiencies are beginning to pay off. Meanwhile, the company announced that it is cautiously optimistic that they will have another successful year in 2011.
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Fortune Oil Surges after New CEO Appointment
Fortune Oil & Gas Inc. (FOGC, Free Analysis), a mining exploration company focused on precious metal properties, surged more than 80% after appointing Serge S. Acimovic as its new President and CEO. Meanwhile, the company was also the subject of a popular investment newsletter, which likely contributed to the strong move upward during today’s session.
Despite the optimism surrounding the stock, investors should be aware that the mining company has not provided updated financial statements since 2007, and therefore may be very difficult to value. OTCMarkets has rated the stock a “No Information” company, which indicates that it may not be able or willing to provide disclosure to the financial markets.
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Novogen Breaks Out Higher with Marshall’s Support
Novogen Limited (NVGN, Free Analysis), a biotechnology company focused on pharmaceutical research and development, more than doubled during today’s session after breaking out from a key technical level, with a related move in its subsidiary Marshall Edwards. There was also speculation of upcoming FDA news that helped catalyze shares to move near their 52-week highs of $2.97 per share.
Last week, the company’s subsidiary Marshall Edwards published its Phase II clinical trials results for Phenoxodiol in combination with cispatin in women with platinum resistant ovarian cancer. With well-tolerated doses and an overall response rate of 19%, the company believes that the treatment may be capable of reversing resistance to platinum-based chemotherapy.
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Edwards’ Stock is Set to Rise in Sapien Results are Good
Edwards Lifesciences Corp (EW, Free Analysis), a developer of technologies to treat advanced cardiovascular disease, could see an 11-20% move higher if its Sapien shows positive results in an upcoming trial, according to Wells Fargo. The results come after surveying buyside clients, while the firm believes there’s a 50% chance of successful trial results.
Earlier this month, Madison Williams also upgraded the stock based on feedback that indicates its Cohort A trial data will be better-than-expected when presented at ACC 2011. The analyst upgraded the stock to a Buy and set a $115 per share price target, which reflects a significant 28% premium to the current market price.
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Wendy’s Upgraded on Arby’s Sale Potential
Wendy’s Arby’s Group Inc. (WEN, Free Analysis), a restaurant operator with 6,541 locations around the country, was upgraded by Roth Capital ahead of the opening bell. The analyst upgraded the stock to Buy from Neutral to reflect new initiatives by the company and its intention to sell Arby’s with an $8.00 per share price target, reflecting a 59% premium over the current market price.
Earlier this month, the restaurant chain reported a fourth quarter loss of 3 cents per share, versus a consensus estimate of a 2 cent gain, on revenues of $840.7 million, compared to a consensus of $840.82 million. However, the firm noted that it was continuing to explore a sale of Arby’s and expects 10-15% annual EBITDA growth starting in 2012 due to new initiatives.
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MetroPCS Benefits in Many Ways from AT&T’s Purchase
MetroPCS Communications Inc. (PCS, Free Analysis), a wireless telecommunications provider, could be a potential buyout target for Verizon or Sprint following AT&T’s acquisition of T-Mobile, according to RW Baird. As a result, the analyst upgraded the stock to an Outperform and set a price target of $22.00 per share, which represents a 40% premium to the current market price.
While a recent Barron’s report suggested that US Cellular is a more likely acquisition target, the article noted that MetroPCS may be able to benefit from the elimination of T-Mobile USA, whose existence tended to crimp pricing strategies. Meanwhile, the company may also be able to pick up more radio spectrum, depending on what AT&T decides to divest.
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