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DRRX +14%
PTIE +35.8%
Two biotechs up on bullish SA article by Red Acre Investments
Both drugs soared when Pfizer revealed it was evaluating of their pain drug Remoxy on April 30th. Then fell on subsequent news from PFE that there was still significant regulatory hurdles to overcome. Still room to run if you look at how the charts mirror each other. as they are both based on the same event, evaluation of their pain drug Remoxy.
http://www.bloomberg.com/news/2013-04-30/pain-therapeutics-durect-jump-as-pfizer-highlights-remoxy-drug.html?
http://www.bloomberg.com/news/2013-05-10/pain-therapeutics-durect-fall-as-pfizer-evaluates-pill.html?
SRPT +5% woulda, shoulda, coulda. I forgot all about it and it popped. link back
BIOD - Huge volume and price spike first 15 mins of trading. Rest of the day retrace to close even.
GTXI- picked up a small starter yesterday, glad to see a little retrace here, in the hunt for more. Got a bid set at 4.80. Thanks Trade.
SIMO 11.29 +8% Ripping higher on volume. Traded as low as 10.60 this morning. Volume spike yesterday was the clue. Link back to DD
SIMO - 10.60 at close, +0.27 (2.6%) after reporting AH. Small beat on ER. IMO, this is a value play that is getting ready to run. It has put in a solid bottom, volatility has contracted.
Link back for more DD.
"Silicon Motion Announces Results for the Period Ended June 30, 2013
Second Quarter 2013
Financial Highlights
Net sales increased 2% quarter-over-quarter to US$58.3 million from US$57.4 million in 1Q13
Gross margin (non-GAAP1) increased to 48.4% from 41.0% in 1Q13
Operating expenses (non-GAAP) increased to US$16.8 million from US$15.6 million in 1Q13
Operating margin (non-GAAP) increased to 19.7% from 13.7% in 1Q13
Diluted earnings per ADS (non-GAAP) increased to US$0.27 from US$0.17 in 1Q13
Business Highlights
Entered mass production for our new 55nm eMMC 4.5 controller and secured nine design wins, including several global Android and Windows 8.1 flagship smartphone and tablets
Began mass production of our new 55nm UHS-1 SD controller supporting TLC flash, enabling high-performance, low-cost UHS-1 SD cards
Secured two tier-one Japanese OEMs for our FerriSSD solution for multifunction printers
Entered mass production for our high-performance CompactFlash 5.0 professional-grade controller with a Japanese and a US-based flash OEM"
SIMO is a Taiwanese (not mainland Chinese) company. It trades with a TTM PE of 4.63, forward PE 9.10 and a dividend yield of 5.7%, $4.77 COH and has been buying back shares (900K MRQ, 2.7% of float). The operational improvements and decrease in shares has helped improve per share metrics. The design wins are the big story for SIMO here as their "New Growth Products" grew 30%. The YOY decreases in sales are more than fully reflected in todays price. What isn't reflected is that they have over $4.77 in cash per share on the books. The revenue decreases have come as they are transitioning and growing their next gen LTE transceiver markets. Samsung is their biggest customer (about 30%), so there is some risk associated with that.
I would point to one line from the ER link below: "We believe we have about half of the fast growing China eMMC market." eMMC's are embedded SSD memory controllers in smartphones. SIMO designs controllers for all price points in the smartphone market and as everyone knows more and more SSD memory is being used in all smartphones at all price points. China is the single biggest smartphone market in units sales in the world.
http://finance.yahoo.com/news/silicon-motion-announces-results-period-220000671.html
The chart does look primed I picked up some GTXI today based on the catalysts and the chart. I love a SA hit piece swing play.
BIOD - Nice looking chart setup Trade. Consolidating for 6 weeks and a shallow uptrend for last 4 weeks Volume is very strong today and while off the price is holding nicely. You auto sold a portion of your position, you are still holding some?
IMUC - more analysis of catalyst and trade from RedAcre Investments. I like their work and recommend them as a very good resource. They killed me in one of $heff's trades that I was following. It was on Talon RX's Marqibo FDA approval catalyst trade. They published a SA article that pointed out how crappy the share structure was for holders of common, versus Warburg-Pincus. WP had a strangle hold on the company through preferred shares and preferred debt, convertible into shares that at full dilution the little guy was holding no value in his common. I took a bath but learned something. Red Acre was spot on as the recent acquisition by SPPI benefitted WP not common shareholders.
On to making money.
Immunocellular Therapeutics (NASDAQ:IMUC) Edit:excerpted from July 26 Red Acre Investments weekly Review.
"Immunocellular Therapeutics (NASDAQ:IMUC)
IMUC jumped 18% this week largely on the heels of a seeking alpha article which made an argument that "IMUC is the next ACAD". The article begins with the premise that:
Looking back at November of 2012, when ACADIA traded at just $2 a share, the upside was so apparent, although no one noticed.
Suggesting that "no one noticed" ACAD is ridiculous. Those of us who do this day in and day out did notice and told others about it. There were a ton of SA articles regarding ACAD - (we wrote about it when the stock was $1.92). What the market did not factor in was that the failed trials for ACAD had little bearing on the -020 study. Furthermore, ACAD was testing in Parkinson's disease psychosis - but the larger market is for Alzheimer's disease related psychosis - this was the major value driver after May of this year.
The article later states that "Newly diagnosed GBM patients live about a year". This represents all-comers. Realistically, for those with fully resected tumors (which is the proper comparison group for ICT-107) overall survival is 18.8 months. The Stupp et. al. trial that IMUC compares it's phase 1 data with involved 15% of GBM patients who had inoperable tumors - not really a fair comparison.
The other key difference is that ACAD last year was conducting its third phase 3 trial - IMUC is conducting its first phase 2 trial. IMUC will still have to do a phase 3 trial - or two.
All these points aside, given it's current valuation, long IMUC is the correct trade for now, but saying it's the next ACAD, right now, is a stretch. Proper analysis of the available data is a key to successful biotech investing - in this case the article misses some key points and reaches a long term conclusion that is questionable even though the short term trade call is correct.
A few weeks back we doubled our IMUC position. Here's the explanation for why we did so.
We are long IMUC."
The explanation from RedAcre, dated by the url as Jul 28th would not have been a "few weeks back" is as follows:
Buy IMUC at $2.50 or below
They are saying IMUC could run to $8 or $9. We shall see. Good stuff in these articles. I like their work. Published on their free emailing list and beta testing site. If the start subscription stuff I won't be able to post any of that.
CN - many thanks for your alert last time. I can't babysit my positions and day trade so I have to use auto orders and patience like I was taught by traders such you and the other GoodFellas. We were both in IMUC it was OTC before it was uplisted. I know it will run into the trial results so dips are just accumulation opportunities for me. I also agree that the cup and handle just reinforces the IMUC thesis. It is a thing of BEAUTY !!!
IMUC Bought more yesterday at 2.30. Average at 2.38 now. It is running hard into the close.
Edit: I see why, SA pump by Brian Nichols comparing it to ACAD (which I am still holding).
http://seekingalpha.com/article/1567072-what-can-you-learn-from-acadia-pharmaceuticals-exceptional-year?source=yahoo
SRPT 39.26 -15.2% or - over $7 a share today on crazy panic selling. Company reported today they will file a NDA early in first half of 2014 on the data they have. Crazy sell the news action. I got stopped out at $44 have been in since $30.80 on this run. Damn thing ran as high as 47.35 Monday before this flush. It is trying to settle here. Solid drug, solid prospects for approval given lack of alternatives, great safety profile, efficacy. I am watching for a potential reentry based on action today.
Sorry CJ, I missed this message last Friday. I have picked up $VIX calls, last week and more this morning. Markets look a bit overextended. I got out of my AAPL calls last week for better than a double. Waiting on this retrace, and because earnings out today. I think AAPL will drop post earnings will look to reenter. Also have GLD 8/17/13 calls, pulled the trigger too early and are almost breakeven on them. If they don't move more this week, I am bailing on those.
SIMO - 10.83 +2% on volume Fabless semiconductor with a 5.7% Dividend yield and $19.95 cash per share. Has been in a narrow range the last 30 days. This is my favorite semi play right now and I am looking for at least 50% by the end of the year. This is a underfollowed LTE play whose biggest customer is Samsung which is also their biggest risk. They are trying to diversify into other lines as detailed below.
some recent articles:
Good SA articles (is that an oxymoron these days?)
http://seekingalpha.com/article/1527672-4-good-yielding-stocks-with-low-price-to-free-cash-flow-and-low-debt?source=yahoo
Look at the valuation metrics in this next article especially price to free cash flow !!
http://seekingalpha.com/article/1528762-silicon-motion-significant-opportunity-in-light-of-near-term-headwinds?source=yahoo
http://beta.fool.com/ruperthargreav/2013/06/12/are-these-tech-companies-a-good-value-investment/36887/?source=eogyholnk0000001
CLSN +16.4% Called that one on the nose CJ. Your calls were up 32% Those LEAPS are cheaper based on IV and give you plenty of theta. You lose some upside but there are always trade offs. Great volume on this move.
BIOD - 4.46 +4.9% with 2X SMA 10 average volume. Popped on SA article. Biodel Is A Vastly Undervalued Biotech With A Near-Term Catalyst
Multiple upcoming catalysts 2H 2013. Added to Russell microcap index this month. Raised $22.4M cash on 6/20/13 with offering price $4.35.
INFI 17.49 +1.4% developemental bio. This one looks interesting to me. Oncology drugs are it's focus.
From MarketWatch.com article:
Hedge funds are buying these stocks Published yesterday.
"INFI +1.63% , a $790 million market cap biotechnology company (on average about 2 million shares are traded per day, making for plenty of volume), has had James Flynn's Deerfield Management disclose ownership of 2.3 million shares. Research more picks from Deerfield Management. As a development stage biotech stock, Infinity isn't expected to earn positive profits either this year or next year. It did have about $300 million in cash, cash equivalents, and liquid securities on hand in its most recent quarterly report with cash flow from operations being negative $25 million during Q1."
Another post from Marketwatch article on June 4, 2013 with bear case and explanation for sell off since April.
Infinity Pharmaceuticals tries to regain footing after a rough session
Just some thumbnail DD. I will dig deeper and post more. Does anyone else know anything about it?
EDIT: Another positive from July 11th. Bullish put selling.
Why trader is selling puts in Infinity
reported by OptionMonster.com
IMUC- I am in a starter at 2.44.
Wahhhh, everybody beat me to the bid... LOL, great trading Binks and T2M.
IMUC- That is a great entry CN. I missed it. I am watching the 3 min chart for an entry. I bought some VIX 08/21/2013 15.00 calls though. Looks like it is ready to bounce to me.
BIOD - 4.10. I am picking up more shares here. Here is a great breakdown from Redacre Investments. Sign up for their newsletter if you don't already. They have decent information on bios.
From week ending 6-20-2013
"Biodel (NASDAQ:BIOD
Biodel raised money this week. On Wednesday here is what we told our beta testers:
Biodel has announced a proposed public offering of common stock. While the press release does not give details of the size or pricing, word on the street is that it's $20 million and pricing likely to be $4.35.
While momentum traders hate to see financings because it pauses the upward movement, raising some cash now is smart balance sheet management. Biodel had been guiding that their current cash would last them until the second quarter of 2014 based on a cash burn of around $7 million per quarter. If the company raises $20 million, this should extend the cash runway by about 3 quarters, essentially to the end of 2014 at current expense levels.
Recall that Baker Brothers and Orbimed Advisors are large holders of BIOD. This means that the offering should be well received and these firms are likely to increase their stakes in the firm. When Bakers brothers recently disclosed a 22% stake in Acadia pharmaceuticals (NASDAQ:ACAD), the stock experienced a strong rally as other buy-siders began chasing the stock. While this is not a guarantee that a similar move would happen here, it is a definite possibility in the coming months.
All in all, raising $20 million increases BIOD's market cap, but not to unreasonable levels. We would rather see companies use prudent balance sheet management (recall ARNA also raised during run ups in 2010 and 2012), than see what CLSN did - letting the stock run from $2 to $9, and then massively diluting shareholders after a trial failure. There is a chance that BIOD will be green tomorrow if pricing comes in at the hinted $4.35 level. If it dips, it should be viewed as a buying opportunity. If you already have a full position of shares - look to the options on a dip for a short term play just like there was in MNKD today.
The financing indeed priced at $4.35 with a total of 4,482,760 shares and and underwriters' over-allotment (greenshoe) of 672,414 shares. We expect the greeshoe to be filled as well for a total of 5,155,174 shares to be issued. This was a very clean financing without warrants etc. On Thursday, when BIOD traded below the offering price, we added to our position as we tweeted that day. BIOD closed the week at $4.15 after a brief dip a low as $4.05 on Friday. Our buy may have been a bit premature, but, for a tock like BIOD where there are only about 19 million shares outstanding (24 million counting warrants and stock options), we do not trade for dimes, but rather for dollars. We continue to believe the company will announce positive top-line results from their phase 2 trial of BIOD 123 and that this could eventually move the stock by 100% from current levels.
We are long BIOD."
Their website: Red Acre Capital
Nice bull flag on the chart. Setting up for the next leg up with capital raise behind them.
BONE 0.54 +14.9% (was as high as 0.61 or +29.8%) on no real news of board votes to change board voting rules. I had a starter in at 0.53 but it floated to 0.54 and no lower. Company is in a turn around mode with new management. I read the last CC transcript and while they are restructuring operations there is a dearth of news on this $23.2M nanocap. There are many unknowns with this one as nobody follows companies this size.
http://biz.yahoo.com/e/130711/bone8-k.html
Linked back to T2M's chart.
That is a nice candle and volume spike today. Again, nice catch CN. I will have a bid in tonight.
APPL +2.8% today, up 13.3% since 4/19. I bought Jan14 450 Leaps yesterday at 14.50, now trading at 17.35 with HOD of 18.85. The options skew now favors calls (ie calls are relatively/historically more expensive than puts). The whole run down from 700 to 400 the opposite was been true. The smart money is indicating that it is go time for AAPL (for now).
EDIT: Added chart
PTX - geez, could never get it to hit the bid now at 3.82 up 0.32 or 9%. Relatively thinly traded so when it runs it runs (both ways !!)
I agree, I think they should finally be ramping revenue after dealing with the costs of addding additional clean rooms and training staff. They have added to their sales force as well. We shall see.
I get that. It is the same for me. I sold when they broke support back in late Feb. They are in transition, still hunting for new CEO and reporting the first institutional/hedge fund buyer ever in this one, a Rawleigh Hazen Ralls IV from Boulder Co.
They are so small I have never seen a hedgie with a position.
http://www.theflyonthewall.com/permalinks/entry.php/BONEid1822377/BONE-Rawleigh-Hazen-Ralls-reports--passive-stake-in-Bacterin-International-
This one owes me some money, Trade.
I agree on IMUC. It clearly is in an uptrend, closing better than MA10 last 3 days if this holds.
SIMO 11.58 +7.62% making a huge move here on SA article. Compares SIMO to HIMX.
I have bought an each of the last 2 dips as this is one I have researched carefully. Earnings AH May 6th. My target is $18 as SIMO's FY revenue is back end loaded.
How is IMUC looking to you CN? Looks like it is turning up. I am still holding ACAD. The accelerated approval is a huge for them. Added more on a dip to 13 yesterday.
FIO 16.71 +8.3% in at 16.20 this am after alert. Strong close near HOD.
SA Kapital article (one of the few authors I trust on SA) on FIO and others released yesterday evening. Just saw it.
http://seekingalpha.com/article/1359791-shorts-are-covering-4-stocks-reporting-this-week-with-history-of-upside?source=yahoo