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The stock has corrected recently, and is now about 15% below the 52 week high of $2.02 made in July. The next earnings could be an important trigger for the stock. It will determine the short term direction of the stock. If the company is able to post good numbers, then the upward momentum will resume and gain strength. The fundamentals have shown improvement recently, and the company seems to be close to achieving profitability on a net basis. The ttm revenues are around $684 million and the net loss is around $15 million. This compares well with the 2012 figures of $650 million and $16 million for revenues and net loss respectively. It indicates that the company may do better than 2012. In H1'13, the revenue were $381 million which is 20% above the $318 million in H1'12. The net loss also declined from $8 million to $6.4 million during the same period. The debt has reduced over the last couple of quarters, though the extinguishment has cost the company $3.8 million as a one time charge. In addition there may be recurring costs. Dr. Frost's support has been the real game changer for the sentiments about the company. Recently, several of his investments have done very well, and many like Biozone (BZNE) still have a lot of potential. LTS stock has not done as well as many of Dr. Frost's other stocks, but is still up 36% on a 52 week basis. However, as soon as the market begins to factor the possible turnaround, the stock may begin to do even better. The price to sales ratio is extremely low (0.47), and the price may catch up with the fundamentals soon. It is important that the improvement in fundamentals is consistent over the next few quarters. There have been some small insider purchases recently, and one needs to keep a watch on that before the earnings.
There have been several articles on Biozone recently, and more investors are beginning to know the details about the future potential of the company. A recent article mentioned that the stock has limited downside potential due to revenue support of the contract manufacturing division, and the future potential is largely based on the developments related to QuSomes technology. The high potential of QuSomes drug delivery technology is indicated by the fact that a company like MusclePharm (MSLP) invested in Biozone months after a similar investment was made by OPKO Health (OPK). The MusclePharm team, including Dr. Frost, must have seen real potential based on the experience of OPKO during its trials with the technology. It is possible that the research results are encouraging enough to warrant a strategic investment. As the author mentions 'there must be something very innovative about the QuSomes technology and Biozone's ability to manufacture it for multiple different products.' Success in the trials could open up the gates for manufacturing for other companies, leading to higher revenues and margins. MusclePharm could benefit by lower cost production, and improved efficacy of its supplements due to use of QuSomes. In case OPKO begins to use the technology for manufacture of even one of its products, the commercial viability of the technology will be proven beyond doubt, and it could be a significant event for the company. Even if MusclePharm transfers a portion of its production to Biozone, the contract manufacturing business is likely get a huge boost. The stake taken by Dr. Frost indicates that he has faith in the prospects of QuSomes technology. Investments in companies like Biozone have their risks, and the volatility is likely to be high. However, the backing of investors like Dr. Frost surely provides assurance of financial support which is one of the critical elements for success.
The proposed acquisition by AT&T (T) has changed the game for the stock. After years of continuous declines, it has done great over the last few months. The company has been reporting losses for several years, and it carries a huge accumulated deficit. AT&T also has its own problems, and there was an article on seekingalpha which outlined the threat of competition in the near future. Players like America Movil (AMX) and Deutsche Telekom (DTEGF.PK) are offering lower cost, less restrictive prepaid and postpaid services which may hurt the company's topline growth and also put pressure on the margins. The acquisition of leap, which offers such less restrictive services (no contracts, no limits) may help, but it is important that the losses reduce so that Leap becomes a positive contributor soon. There is also indirect competition from the used phone market which is growing fast. Some of the price conscious customers go for previous version of a good quality used high end phones available through companies like Usell.com (USEL). Usell, which provides a platform for buying / selling used phones, reported excellent growth in revenues in 2013. Meanwhile, analysts are not so upbeat on Leap as the stock has already run up quite a bit. Zacks has a neutral rating with the price target at 16, and its analysts anticipate that continued loss of subscribers coupled with significant increase in promotional activities may put pressure on profitability. On the other hand, launch of smartphones coupled with the slashing of non-profitable subscribers may drive ARPU in the near future. There have been other downgrades, like those from Raymond James and Wells Fargo, mainly based on valuations. The stock has already factored a lot of short term positives, and the future is linked to the performance of the entity after the acquisition is completed.
Recent articles on SA have conflicting views regarding Verizon. One article recommends to buy the stock due to its size, safety and dividends. Compared to AT&T (T) it has higher debt, but the gross and net profit margins are higher. The difference between the gross and net margins is very low, which indicates that improved efficiency can improve the net margins. Another article states that the increased competition from the likes of Wal-Mart (WMT) can have an adverse impact on the sales and margins. The Verizon's and AT&T's (T) high price and restrictive two year contracts may not be preferred by customers who want to own smart phones. Importantly, the upgrades are also not available. Competition from America Movil (AMX) and Deutsche Telekom (DTEGF.PK) will be a challenge as these companies are offering lower priced and less restrictive plans, both in the prepaid and the postpaid segments. Importantly, the latest version phones are also available without contract. The author recommends to sell both Verizon and AT&T. Further, there is also an increasing market for used phones, and resale value is becoming an important aspect of competitive advantage. Two consecutive versions of phones are no longer that far apart in technology, and the minor differences in features are no longer compelling enough for all. Instead of going for lower end phones, some may prefer previous versions of the high end phones available through companies like Usell.com (USEL). Usell, which provides a platform for buying / selling used phones, reported phenomenal growth in revenues in the first half of 2013. So the things may not be that easy for Verizon due to competition. However, the power of Verizon cannot be underestimated, and surely the company will make more attempts to adapt to the changing environment. However, the margins are expected to be hit if the threat from the competition increases.
Usell is one of the companies expected to benefit from the launch of the new versions of iPhone. The launch of the application uSell Current is also likely to help the company. It allows customers to determine the value of their iPhone directly on the mobile. The value gets updated on a real-time basis. Customers prefer to own newer versions of their smartphone whenever they come to the market, and resale value of Apple's products offers them a unique advantage. There are also those who want to own a smartphone, even if it is a slightly older version. For Apple, the previous version may not always be too far behind. The technological gap between two versions of other smartphones is also not always too big. Breakthrough or disruptive technology is not launched too often. That being the case, resale value will be an important competitive advantage which companies will seek to achieve. Further, the lower end market customers may go for the previous version of a high end brand instead of going for a new version of lower level brands. Companies like Usell will be in a position to leverage this change in the marketplace. Fundamentally, the company reported better numbers in H1'13 compared to H1'12. The revenues increased from $836K in H1'12 to $2.27 million in H1'13. The net loss declined significantly from $7.26 million to $2.69 million during the same period. The loss per share declined from 77 cents in H1'12 to 4 cents in H1'13. Stock based compensation comprised $1.4 million of this loss. Even for Q2'13, the revenues increased by more than 100% and the loss declined by 82%. The company needs to translate the exponential revenue growth into consistent improvement in bottom-line margins. If the company can show remarkable improvement over the next few quarters, then the outlook for the stock may change significantly.
The stock has recovered after the recent correction. It has done well and appreciated by around 10% over the last one month. 2013 has been good as it has appreciated by 78%. Growth in the top and the bottom-line has been good over the last few quarters, though the last earnings were not as per expectations. There was some growth in revenues on a yoy basis, but there was decline in net income. Sequentially, there were declines both in the top and the bottom-line. The valuations are a bit higher now, but can improve if the next earnings are better. The P/E (ttm) is around 21.5 and the forward P/E is 16.6. The price to sales ratio is 4.22 and price to book is 2.3. The revenues on a ttm basis are $217 million and the net income is $43 million (20% net profit margin). The good part is that there is no debt and the cash position is strong. It has $259 million cash and the current ratio is 2.5. It is important the Q3 earnings are better than expected. That may give a boost to the sentiments. There has been some insider selling but that could be due to various other reasons. Earnings are to be released in the last week of next month. Analysts are still positive about the stock, and there have been articles recommending to buy the stock. The main reason for the positive stance is the unique business model and the huge potential of the growing market. Spherix (SPEX), which had recently acquired several patents, has filed claims against big companies. One author wrote that RPXC is extremely undervalued because the entire company can be bought for less than the cost of its patent portfolio. RPXC has the expertise to leverage the growth to its advantage.
OPKO has done great over the past few years mainly because of the faith of Dr. Phillip Frost. He has been a consistent investor in the company, and he recently resumed his purchases after a gap of 2 odd months. The recent purchases, though not huge in volume, have added to the positivity surrounding the stock. The stock has moved up by nearly 500% over the last 5 years, and even during the last 12 months, it has appreciated by more than 100%. The possibility of a deeper correction can not be ruled out, but it is important to note that the short interest is already very high. There were nearly 35 million shares short with nearly 7 days required to cover based on the recent trading volumes. So if there is a positive trigger or if Frost increases his purchases, then some may press the panic button. However, there are analysts recommending caution, but the purchase by Dr. Frost has reduced the conviction. The valuations are more based on future prospects because the company continues to report net losses. The accumulated deficit is nearly $426 million. The ttm revenue is around $83.25 million and the net loss is $49.45 million. So justifying or sustaining a market cap of $2.92 billion seems a bit difficult. The company seems to be taking the required steps to correct the situation, but the improving the net margins may take time. It has an agreement with Biozone (BZNE) which gives it exclusive rights (for opthalmic products) for use of Biozone's drug delivery technology QuSomes. The technology is expected to reduce the cost of production of drugs. So the potential is there, but it may take some time to realize. Considering the valuations, it is good to remain a bit cautious. Tagging along with a stop loss can be a safe strategy.
The upcoming earnings will be extra crucial for Acacia. The last two earnings have led to huge declines in the stock, and it is imperative that the company is able to beat the estimates this time around. The revenue for the last 4 quarters (ttm) is $201 million and the net loss is $4.19 million. So to show growth in 2013, it has to do great in the balance two earnings. Most probably, the exponential growth of past few years will not be repeated this year. The revenues have fluctuated and the Q2'13 was particularly bad with 54% decline in the topline on a yoy basis, and an even larger drop sequentially. In Q3'12 the revenues were around $35 million and the net loss was around $6.62 million. The analysts have diverse opinions about the stock, though the average price target of $28 indicates significant upside from current levels. Zacks has upgraded Acacia from underperform to neutral rating, and the target is $23.50. Standpoint Research has a buy rating and with a PT of $33, while Barclays Capital has reduced the PT from $28 to $23. JPMorgan Chase has also reduced the target to $34 from $40, though it maintains an overweight stance. The market is growing and Acacia is in a position to leverage the growth to its advantage. Competition may also increase over time. Spherix (SPEX) has changed its business model to pursue patent monetizing strategies. Spherix has filed a few claims against big organizations recently. In case the earnings for Q3'13 are better than estimates, the positive reaction may be aggravated by the shorts. As of September 13, the shorts were at 8%, but the days required to cover them is around 14.5 days. Hopefully, the earnings will provide the positive trigger and the uptrend will resume.
In a recent interview, the CEO Brad Pyatt, has expressed optimism that the company will be able to complete all the cleanup of the balance sheet by 2014. He also expects that the company will report an EBIDTA profit by that time. For 2013, the company seems to be on course to reach $100 million in sales. There are hopes from the Arnold range, and the female fitness products are also likely to bolster growth. As per Brad, MusclePharm is one of the few companies which cover all the product categories for women. The products are likely to be introduced through the bigger retailers like Walgreen (WAG), GNC Holdings(GNC) and CVS Caremark (CVS) whose buyers are 70% women. He mentioned that the support of Dr. Frost has helped improve the capital structure of the company. Dr. Frost helped the company bring in the sophisticated institutional investors and the company has been able to get rid of the toxic debt. MuslePharm has recently invested in one of Dr. Frost's companies Biozone (BZNE). Dr. Frost has nearly 40% stake in Biozone which is into contract manufacturing. It has a patented drug deliver technology (QuSomes) which can help improve the efficacy of the supplements and reduce manufacturing costs significantly. Over the years, topline growth has never been a problem for the company. What it needs is further improvement in the bottom-line. The ttm revenues are $83 million and the net loss is around $9.2 million. The stock has moved from under $4 to current levels within a short time, and it is imperative that there is consistent improvement in net margins over the next few quarters. This will help maintain investors interest in the stock. Listing on NASDAQ will also be another trigger as that will increase the exposure amongst bigger investors.
Many analysts have expressed positive sentiments about IZEA recently. One article focuses on the additions to the strategic advisor board of the company over the last 3-4 months. The author states that the list of addition demonstrates the strength and diversity of the board. Importantly, it is rare to see such a high caliber of advisors associated with a small company like IZEA. This indicates that the members see a lot of potential in the future of the company based on the possibilities which exist in the market. These members could add significant value to the company due to the experience, networks and knowledge they possess. Another analyst mentions the changing face of online advertising over the last few months. Sponsored content is increasingly being accepted and preferred by advertisers. Consequently, companies like Facebook (FB) and twitter have recognized the change. Facebook has shifted to news feed ads and Twitter has adopted promoted Tweets. Even in the professional networking space, LinkedIn (LNKD) has launched Sponsored Updates. Further, the increasing recognition of banner blindness is also leading to a shift from traditional display ads to the native ad format. IZEA has been a pioneer in this business and hence has gained significant experience over the years. This gives it an edge over other companies which are beginning to recognize the importance of native ads. Most importantly, IZEA is getting close to becoming profitable on a net basis. It has been able to obtain funding recently which may help it in its cash flow. The upcoming Native Ad Exchange of IZEA will also be a catalyst which can take it to higher levels of sales and profits. The expected sales in 2013 is $6.9 million, which is more than three times its market cap. This makes the valuations attractive if one factors the future growth potential of the market and the prospects of profitability.
A seekingalpha article contains excerpts from the author's interview with Biran Kellar who answers questions related to the potential of the QuSomes technology and BioZone's contract manufacturing business. The author himself has taken a position in the stock. The Qusome technology is expected to allow BioZone to reformulate and sell certain FDA approved drugs at much lower cost. This can potentially help BioZone capture a large percentage of the market for these drugs. The initial 3 drug targets have a total addressable markets exceeding $7 billion annually. One of the first prescription applications being tried by the company is Voriconazole (a first-line therapy for systemic fungal infections). It is important to note that the formulation needs to go through the required trials and approvals. The trial and approval processes may take two years and cost the company around $3 million. The other drug is Docetaxel (for different types of cancer), which again is highly insoluble. Importantly, the company may be able to sell these drugs at a 20%-30% discount, and still have good profit margins. QuSomes are known to be less expensive, easier to make and more versatile compared to phospholipid based liposomes. For injectable drugs, the QuSomes help in circulation of the drug in the bloodstream for a longer period of time. This results in achieving the same results at lower doses. This reduces the cost of therapy and the side effects. The phospholipid-based liposomes are unstable, expensive, and difficult to formulate. The other aspect of BioZone's business, contract manufacturing, is also expected to do well. The revenues are expected to be $20 million in 2014 based on the deal with MusclePharm (MSLP). More importantly, the company is expected to turn profitable next year. However, the article also mentions some risk factors related to investment in the company, so needs to be read in totality.
The stock has corrected by nearly 25% over the last one month. The weakness & volatility in prices of precious metals has dampened the sentiments. Even other stocks have corrected significantly from recent highs. The underlying nervousness surfaced again as soon as gold & silver started the correction. News from the Fed had some bearing on the sentiments, though the prices have factored the worst and the best already. Now gold /silver are trying to find support around crucial levels. Meanwhile, analysts are not so negative on the sector anymore. Scotiabank increased PT of Coeur from $5 to $6, and Zacks upgraded the stock from an underperform rating to a neutral rating with a price target of $13.50. Raymond James, which initiated coverage on Coeur recently, has an outperform rating with a price target of $18. The stock has an average rating of Hold, and an average target price of nearly $20. Even smaller companies like Pershing Gold (PGLC) have been able to obtain funding at market price. Its Director Barry Honig has made significant investments recently. This indicates that apart from the analysts, even the managements are a bit optimistic about the sector. Coeur recently announced a 91.5% and 96.4% increase in estimates for mineral reserves for silver and gold at its Nevada-based Rochester mine. The management stated that resolving the mining claims dispute at Rochester in late June enabled it to develop a new mine plan for Rochester which significantly increased the reserves. This increased the confidence in the long-term profile of Rochester which may extend well past the life of the current reserves. If silver prices manage to stage a rebound from current levels, then Coeur may benefit significantly. Its cost rationalization efforts are already yielding results. This, coupled with increased expectations from Rochester mine will help improve the outlook for the medium to long term.
An article on SA in August had recommended to buy ANV for the long term. The author stated that the weakness in the stock has more to do with the correction in gold prices and the recent increase in production costs. The liquidity concerns and delays in construction of the Hycroft mill have added to the pressure. The liquidity issues increase the risks in the event the gold prices go down further or the grades deteriorate, or if an unexpected cash outlay event occurs. The company has missed its production targets due to problems with its leach pad. The author stated that valuations are very cheap, and the market cap of the company is even below the current assets it has on the balance sheet. Further, most of the debt is long term and is not due before 2019. The company has one of the lowest enterprise value per gold equivalent reserves and resources among its peers.
In any case, the stock has declined continuously over the past several quarters. Compared to peers, it did not do well even when the gold prices rebounded from the June lows. It has weakened further due to the recent decline in gold prices. Though the liquidity issues may outweigh many positives, one can not ignore that the company has reported net profit in the last quarter, and has a good profit margin on a ttm basis. The revenues are nearly $250 million while the net profit is around $43 million. Overall, the analysts are relatively less negative on the sector, and there have been investments in smaller companies also. Pershing Gold (PGLC), a development stage company in Nevada, has obtained $20 million funding largely supported by its Director Barry Honig. This indicates the faith of the top managers in the prospects of the sector. ANV surely has the potential to do well if gold prices rebound, there is improvement in the liquidity position and reduction in production costs.
The Q3'13 earnings will be a trigger for Silver Wheaton. It has done relatively better compared to many peers. While many stocks have declined by more than 20% from the recent highs due to the correction in prices of precious metals, Silver Wheaton has fallen around 14%. On a 3 month basis, it has appreciated by 33% which highlights the out-performance. The company did not do too well in the last earnings, as the revenues declined by 17% and the net income fell by nearly 50%. The cash margins and operating cash flow declined. A recent article on seekingalpha predicts that the company may post an 11% increase in revenues in Q3'13 while the net margins may decline. The decline is expected to lower the dividends. Increased contribution of Gold to the company's revenues may put pressure on margins, and even the silver's profit margin will decline to around 80%. Gold is expected to contribute 32% to the revenues in Q3 compared to 29% in Q1'13. However, Silver Wheaton remains a preferred bet because of its low risk business model and higher profit margins compared to the gold mining companies. It is important that the correction in the prices of precious metals gets over soon. The outlook is still much better than what it was in June, and many believe that the June lows will hold, if tested. There have been more investments in smaller companies. Pershing Gold (PGLC) has obtained $20 million funding recently, with its Director Barry Honig making significant investments. This indicates the faith of the top managers in the prospects of the sector. The relative strength of Silver Wheaton indicates that it is a good bet for the long term provided the gold / silver prices show sustained strength. In case of a rebound, Silver Wheaton may do better.The valuations may start to get a bit stretched in case the stock goes much higher from here.
There are a lot of expectations from Hayes based on his track record. He is expected to pursue a range of options to monetize the existing patents of the company. He may also acquire more patents which could compliment the existing suites. However, it is important that the efforts lead to visible results on the ground. The company needs licensing agreements so that it gets regular inflows. Settlement agreements could also help the company in getting revenues, and also in increasing investor confidence in its portfolio. Revenues will improve the financials and strengthen the balance sheet. More importantly, it will improve the overall outlook and bring in more interest of large and small long term investors. The good part is that it has the backing of Hudson Bay Capital and seems to be moving on the right path based on the guidance of Hayes. The next few quarters will indicate how things progress on this front. According to a recent press release, Hayes confirmed the company's progression to full monetization of the suite of 230 patents. It had recently filed complaints against T-Mobile claiming infringement of Patent No. '584 entitled related to the geolocation of cells phones on the T-Mobile cell phone network. It has also identified other parties infringing this patent. It also is identifying companies which are infringing the 224 patents acquired in its merger with North South Holdings and filed claims against Uniden and VTech in respect of the patents acquired in its deal with Rockstar Consortium. These two companies together control 75% of the cordless phone market. Skiermont Puckett LLP is leading the monetization efforts of this patent portfolio, and will also help identify other parties infringing the rights. With Hayes at the helm, more aggression may be expected over the next few months. Hopefully, it will translate into licensing and settlement agreements.
Barry Honig purchased another 300,000 shares on September 24 at around $0.37 per share. Honig continues to invest in the company. He has acquired shares from the market consistently, which indicates that he has positive expectations from the short and the long term future of the company. Pershing Gold already has obtained sufficient funds to take it close to production. Now movement in price of gold becomes relatively more important. Gold has remained a bit volatile recently, and it is crucial that it shows strength.
The QuSomes drug delivery technology of Biozone finds mention in an article on Trefis.com. The author states that the QuSomes technology of Biozone is a technique for drug delivery with good potential. After it goes through the trials and tests, it can be used in cancer therapy also. The QuSomes overcome the disadvantages of traditional liposomal delivery techniques which are more costly and time consuming. Qusomes are expected to work faster due to instant formation of a liposome upon introduction into water. The deal between Roche and Inovio has drawn comparisons between Inovio's electroporation technique and other methods which could provide competition. The licensing deal between Roche and Inovio is for developing vaccines designed to treat prostate cancer. The author mentions that the treatment method and the drug delivery technology are important in oncology to minimize side effects by using a more well directed administration. Further, better drug delivery can help in preventing return of the tumors. The Qusomes technique (liposomal delivery), which is being tried with other drugs, can offer an alternative to electroporation because the technique can increase the efficacy of certain drugs in treating cancer. Liposomes are basically a fatty layer which encapsulates the drug thereby reducing the systemic decomposition of the drug and increasing its bio-availability. The cost of producing liposomal drugs can be high and time consuming, but the QuSomes technique is believed to take care of the disadvantages. The QuSomes increase the solubility of drugs which makes the administration easier, and production less costly. The technique is not being applied to cancer treatments yet, but may ultimately find place as the tests on other drugs progress. Success of QuSomes on drugs like Propofol can enhance the possibilities with liposomal delivery. Ultimately, the efficacy of the technique will matter. If the tests conducted by OPKO show great results, then the technique could be in demand.
An article on SA compares Facebook (FB) with Twitter in view of its upcoming IPO. Among other things, the article mentions that both Facebook and Twitter derive the majority of their revenues from online advertising, and one of the driving factors behind both companies' recent valuations is their adoption of native advertising. According to the author, native advertising is a rapidly expanding subset of online advertising, and on Facebook, native ads are placed in the news feed, while on Twitter, they come in the form of promoted tweets. Many analysts expect native advertising to be behind the majority of future growth in revenues of these two companies. Interestingly, the article mentions that social media ad networks (like IZEA) are increasingly diverting ad revenue from these social media companies. These provide third party marketplaces through which advertisers and social media publishers can transact without the host platform's input. The author mentions IZEA as a platform which is home to database of social media publishers that are willing to promote goods and services via their personal social media channels. The author mentions that 'In the same way as display ad placement, native ad placement on social media sites will likely be increasingly arranged by a third party in the future. With this in mind, investors looking to place valuations on social media sites such as Facebook and Twitter should do so with the consideration that alternative revenue streams might be required in the medium to long term to sustain growth.' So these companies are expected to find ways to counter the competition from IZEA and other social media ad networks. This will help them continue the growth in the revenues. Options available to the companies could include acquisition of such companies and diversification of the revenue streams. Analysts expect the spending on this form of advertising to reach $160M by 2014.
The upcoming IPO of Twitter is expected to generate some hype, though the investors are likely to be more cautious. A seekingalpha article mentions that even Goldman Sachs is likely to be more cautious about the pricing of the IPO. The author compares Twitter with Facebook and the similarities include the fact that both are giants of social media and have experienced tremendous growth in user base in a short period. However, twitter is far behind with around 100 million monthly active users compared to 1.1 billion of Facebook. Both companies generate most of their revenues from advertising, and Facebook seems to be getting it right as far as monetizing its mobile user base is concerned. In fact, that is what led to the dramatic change in sentiments for the stock recently. The article also mentions that the driving factor for valuations of both Facebook and Twitter could be their increasing focus on native advertising. Native advertising is believed to have huge potential, and is likely to play a major role in future growth of both companies' revenues. The author contends that future success in this segment is not going to be too easy, as specialists in this field like Social media ad networks are increasingly diverting ad revenue from social media companies. For example IZEA (IZEA), a pioneer in native advertising, runs a number of these marketplaces, and the number of advertisers are using them to arrange native ad publishing. So the pure social media companies may acquire some of these smaller companies and also diversify to focus on other emerging segments to maintain growth. The upcoming IPO will lead to a lot of discussion on Facebook, and arguments like these will be discussed. Ultimately, Facebook has done well though there was a lot of pain in the intervening period. This could have perhaps been avoided had the pricing been better.
The stock has multiplied 6 times during the last nine months. The purchase of shares by Dr. Frost in April at $0.05 has led to significant improvement in sentiments. Fundamentally, the company does not have much to show right now, though a recent article on seekingalpha has expressed positive sentiments about it. The author believes that the company has reduced losses over the past few years, and its product has a lot of potential. Investment by Dr. Frost also points to the potential in the products, and also the possible synergies which NIMU can offer for the other companies where Dr. Frost has a stake. The article mentions that there may be some synergies with OPKO Health (OPK). Further, Dr. Frost is known to be great at picking companies with high potential when they are available at low valuations. He also looks for collaboration between his companies. For example, he has substantial stake in Biozone (BZNE) which owns a high potential drug delivery technology (QuSomes). There is an agreement between Biozone and OPKO Health (OPK) for testing of the QuSomes technology. Though the possibility of a stake by OPKO could be far fetched, it cannot be ruled out either. However, it is important to remember that the company hardly has any revenues right now, and it needs to show some improvement in the fundamentals to justify the recent jump in market cap. It has appreciated by 328% in 2013, and has multiplied 6 times from its 52 week low of $0.05. Presence of Dr. Frost is surely reassuring, but ultimately fundamentals may start to weigh down on the stock. So it may be good to be a bit cautious after such a huge run up. News flow and results of the next few quarters will determine whether the stock will be able to cross the recent highs.
Recently, many of the stocks owned by Dr. Frost have done well. There are several investors tracking the portfolio of Dr Frost. His acumen at picking high potential growth stories at extremely low valuations is very well known. Success of his investment in IVAX is famous, and the recent investments in companies like OPKO Health (OPK) have also done well. In addition, he has stakes in several other companies like Biozone Pharmaceuticals (BZNE) which is expected to do well in the near future based on its products and technologies. He also looks for synergies between his companies like the agreement between OPKO and Biozone for testing of Biozone's proprietary QuSomes drug delivery technology. An article on seekingalpha recommended to buy Castle Brands. The author contends that the company has huge potential, and it recorded good growth in its latest quarterly earnings. For the quarter ended June 30, 2013, the sales increased 7% to $10.4 million and the EBITDA improved by 54.9% to a loss of ($0.2) million. Dr. Frost owns 10% in the company, and has perhaps seen a turnaround story in the making. However, the run up may not be so smooth in the short term because the stock has already appreciated a lot recently. The stock is already up 125% in 2013, and may do better if the earnings for the next few quarters show improvement in the top and the bottom-line. The business surely has a lot of potential, and the backing of Dr. Frost is reassuring. Other aspects of the balances sheet also need to be strengthened. As on June 30, the company had $9.43 million debt and $288K cash. The accumulated deficit was in excess of $130 million. Ultimately, it will move on fundamentals and hence it is vital that the turnaround happens sooner rather than later.
The stocks owned by Dr. Phillip Frost have been in focus recently. Several analysts and investors have been following the stocks where he has been active. Last few months have been very good for many of these companies. The SA article on Tiger Media has recommended to buy the stock. The author considers it a multi bagger turnaround story. He has recommended to take a long term investment position at $1.20. He has mentioned that the future looks extremely bright with high margin LCD displays, rapid expansion, a proven business model currently operating in Shanghai, and the revenue growth opportunity of implementing interactive advertising displays. Again, one of the main reasons for his bullish stance is that Dr. Frost owns a major stake in the company. He had increased his stake in July at $0.81 per share, and the stock has done great since then. Frost's acumen at picking high growth potential companies at low valuations is well known. His recent successes include the famous IVAX story. OPKO Health (OPK), Biozone Pharmaceuticals (BZNE) and several other companies have done well recently. Importantly, Frost looks for synergies between the companies where he owns a stake. The licensing agreement between Biozone & OPKO for testing of Biozone's proprietary QuSome drug delivery technology is a recent example. Tiger Media's performance in its nascent LCD advertising business is encouraging as the company recorded $2.1 million sales in the first couple of months. This indicates the potential from Shanghai alone to be around $37 million in annual revenues. By the end of September they will have established more than 115 LCD screens in 23 different malls in the Shanghai Network, and it does not need to raise more funds as the Shanghai operations are likely to be self-sustaining in six months. Expansion plans for other parts of China and the partnership with Home Inn hotels network are the other reasons to expect great things from the company. However, like all such investments, the risks are extremely high.
The last few sessions have been great for Omnicom as it has rebounded sharply after the post-earnings correction. Now it is up around 10% from the recent lows. However, the volumes have not been too high during the recovery. This helps the sentiments as the stock had corrected significantly after the better than expected earnings. Now the stock is up around 22% over one year, and is nearly 45% above its 52 week low of ~$45 made in November. In Q2'13, there was 2% yoy growth in revenues and net income. The growth in emerging markets helped the company beat the analyst estimates. The operating margins expanded. The company has been doing well fundamentally over the years. It is possible that the stock may take a breather and correct a bit as the run up has been very fast. The stock is about 9% away from the 52 week high. It may require a major trigger for the stock to cross that hurdle. A seekingalpha article had predicted 7% growth in EPS based on the company's expansion in the Asian and Latin American markets. The company is also likely to gain from the rising demand for digital marketing. The merger with Publicis is also expected to help improve the overall performance of the company. It will help it enhance its capabilities in the digital arena. There may be some problems due to the merger as the two companies serve rival customers. This may lead to loss of some major accounts. Further, competition in the advertising industry is high and fragmented. IZEA (IZEA), a company in the social media sponsorship / native ads space, recently published results of a survey indicating the changed dynamics of online advertising. The exact impact of the merger will be more apparent over the next several quarters and years.
The last few weeks have seen the stock make a bit of a comeback. It has moved smartly from ~$845 to the $905, and there have been some good volume days as well. It may try to test the 52 week high, but that will partially depend on expectations from the upcoming earnings. Any rise in the stock price will make the earnings exposure even more risky. The last quarter earnings were not as great as usual, and there were some areas of concern. Increased usage of mobile devices is putting pressure on the ad rates as the advertisers are unwilling to pay the rates which they were paying for desktops. Most companies in the search engine / social media space are facing the challenge. Further, there have also been reports highlighting concepts like banner blindness which can make growth of display ads more difficult. Native advertising / social media sponsorship is picking up with companies like IZEA (IZEA) doing well recently. An article on seekingalpha mentioned Google's efforts to diversify its revenue stream. Its Enhanced Campaign project is likely to force marketers to one package of advertising for mobile computers and desktop computers. This may help counter the adverse effects of declining ad rates. Further, the Motorola Mobility purchase may begin to pay off, and even launches like driverless automobile are also expected to help in the long run. The author has predicted a 10% fall in the price of the stock before the earnings release in October. Next few sessions will give an indication about the likelihood of a correction. If Google is able to beat the estimates and its Enhanced Campaign begins to show results, then stock may go higher. It remains a favorite of many analysts, and the recent news from the Fed may also support the markets.
An article on insidermonkey gave some details about the hedge fund activity related to the stock. The article mentioned that in preparation for Q3'13, 10 of the hedge funds tracked by them were bullish on Clear Channel (an increase of 11% from the first quarter). There were a few notable hedge funds which increased their stake. Joshua Friedman and Mitchell Julis's Canyon Capital Advisors had the largest position in Clear Channel worth close around $39.4 million, while Mason Capital Management had around $31.1 million position. Further, a Judge in Delaware approved a $200 million dividend payment by Clear Channel Outdoor Holdings Inc. to settle a shareholder lawsuit over cash transfers to its parent company. The stock has, meanwhile moved up a bit during the last one month. It is looking a bit better, and the volumes average are a bit higher. The performance of the company over the years has not been very consistent because the bottom and the top line has not shown continuous growth. The recent quarter was much better with growth in revenues on a sequential and yoy basis. The company posted a net income after reporting a couple of quarters of net loss. The ttm operating margins are around 10% and the company has a net loss of $200 million including the $258 million impairment for extinguishment of debt. A few more good quarters can help it become much stronger and regain the lost momentum. However, growing the topline is not easy in view of the competition in the market. There is direct competition from other outoor advertising giants like Lamar (LAMR) and CBS, and there is competition from other segments of the advertising market. IZEA (IZEA), a company active in the social media sponsorship space, recently reported results of a survey which point to increasing popularity of native advertising. The next quarter results will be important.
2013 has been good for Inovio investors. The stock is up 370% with most of the gains coming more recently. It is up 237% in the last 52 weeks. Compared to the 52 week low of $0.44 in November, the stock has multiplied more than 5 times. The volumes have been good over the last few days. The deal with Roche (RHHBY) is expected to have positive long term implications which may change the game for the company. It will give it the support required to take its vaccines and the drug delivery technology to the next stages of trial. The agreement with Roche indicates that company's technology / products surely have a lot of potential. The electroporation technology may have a significant impact on cancer therapy after it successfully goes through the trials etc. As mentioned in an article on Trefis, there are other drug delivery technologies like QuSomes from Biozone (BZNE) which are being tested. The QuSome technology (lipisomal delivery) is expected to help in reducing the cost of production of several drugs by enhancing the solubility of drugs. Once these type of technologies are tested and approved, the efficiency and efficacy of drug delivery may improve remarkably. Inovio has granted the license for two of its vaccines and the electroporation technology to Roche. In addition, Roche has an option to license additional vaccine opportunities to further develop a research program in oncology. The $10 million upfront payment and the $400 million milestone payments will help improve Inovio's financial performance. Over the years, the losses have continued and the accumulated deficit is nearly $250 million. However, Inovio does not have any debt on books, and the cash position is also good. The royalties on future sales may take time to come, but that possibility brings additional positivity to the long term outlook for the company.
The stock is up around 38% over the last one year. Over the longer term also, the stock has done well with decent returns for the investors. It has been a bit volatile over the last few months, but is starting to look strong again. As mentioned in an article on Motley Fool, Roche is a good stock for investors looking for conservative growth. In the first half of fiscal 2013, its group sales rose 5%, and the core earnings per share climbed 12%. The HER2 franchise grew 11% to around $3.55 billion, accounting for 14% of the company's top line. It has been working with experimental companies like Inovio (INO). This could help it prepare for the patent expirations starting next year for Herceptin ($6.3 billion in sales in fiscal 2012). The new subcutaneous formulation of Herceptin which was recently approved in the EU is also likely to help make up for the loss. Roche's exclusive worldwide license deal with Inovio will support continuous research, development and commercialization of Inovio's SynCon technology vaccines for prostate cancer and Hepatitis B. The deal mainly gives Roche exposure to the high potential prostate cancer market and access to electroporation technique for administration of vaccines. This drug delivery technology is promising though the technology itself is still in the trials phase and will be subjected to regulatory approvals etc. As mentioned in an article on Trefis, there are other drug delivery technologies like the QuSomes of Biozone (BZNE). This technique (liposomal delivery of drugs) is also very promising with OPKO Health (OPK) having a licensing agreement with Biozone for testing / commercialization of QuSomes. Even QuSomes can find place in drug delivery for cancer treatments. Hopefully, the deal will help both Roche and Inovio in the long term.
The correction after the earnings was deeper than expected, but the stock has recovered well. It has appreciated by 12% during the last one month and is 30% up over 3 months. However, it has declined by 22% over the last one year. Recent fundamental performance has been okay, as the second quarter earnings were better than expectations. The revenues were higher than the company guidance, and even the net loss reduced substantially. Mobile revenues, the main hope of the company's growth, doubled on a yoy basis, and increased by 37% sequentially. The growth is expected to increase as the company plans to concentrate on this through launch of new products. The management is happy with the progress related to growth from mobile advertising products, especially after the launching of additional native mobile ads on iPhone recently. Native advertising / social media sponsorship is catching up with advertisers. As per a survey conducted by IZEA (IZEA), a company active in this space, advertisers are increasingly allocating a portion of their budget to social media / paid social content. The performance on the other indicators (like monthly active users and mobile MAUs) was also good, which indicates that things are better now. The mobile average revenue per daily active user also increased 48 percent. However, for sustained appreciation in the stock, it has to deliver consistent improvement in performance. Bottom-line margins will be the key metric to watch going forward. There is a lot of scope in improvement as the net margins (ttm) are -35%. Revenue on ttm basis is ~$40 million and net loss is ~$14 million. Revenue growth may not be that easy due to competition, but reduction in net loss will improve the sentiments. That will increase the possibility of a turnaround which may get reflected in the valuations in due course.
Biozone recently entered into an asset purchase agreement with Lautus Pharmaceuticals for selling its interests and inventory related to Glyderm brand of skin care products. Specifically, it sold the Glyderm trademark, patents, product formulations, the domain names and website, apart from the existing inventory. Lautus will re-launch the Glyderm product line. The selling price is $1 million, with $600K payable at the closing of the agreement, $200K payable 6 months after the closing date, and $200K payable after 12 months. In addition, the purchase price for the inventory will be paid by Lautus as the inventory is sold to third parties. Importantly, the two parties entered into a 5 year supply agreement providing for the manufacture of Glyderm products by Biozone on behalf of the buyer. The schedule of the price per unit payable by Lautus to Biozone for manufacture of Glyderm has been specified. Biozone will use the sale proceeds to repay a portion of the principal plus interest owed under outstanding promissory notes, and for general working capital purposes. In addition, Biozone also announced settlement of a long standing dispute with its former Executive Vice President (Daniel Fisher). Further, the recent investment by MusclePharm is a recognition of the possibilities related to its proprietary drug delivery QuSome technology. It is expected that the technology will help in enhancing the absorption and speed of delivery of MusclePharm's supplements. QuSomes have the potential of being a game changer for Biozone due to the expected demand from pharma manufacturers after the technology completes the process of trials and tests. Presence of Dr. Frost, who is on board of other pharma manufacturing companies, increases the possibilities significantly. It will also help Biozone in its main business (contract manufacturing) which is already generating revenues to provide the necessary cash flow for the company.
The CEO Ted Murphy recently purchased 100,000 shares of the company for investment purposes. This week he purchased 30,000 shares in the open market for a total purchase price of $9,890 (an average of $0.33 per share). Last week (September 4 to 9), he had purchased 70,000 shares for a total purchase price of $24,902 (an average of $0.36 per share). While the quantity may not be much, insider purchase is a good sign as it indicates confidence of the management in the future of the company. The recent quarterly earnings were very good as the revenues increased, and the net loss had declined significantly. There were indications that if the company continues to make progress, it may get close to profitability on a net basis. In H1'13, the company booked $3.45 million in sales which can be extrapolated to $6.9 million on an annualized basis. The operating expenses decreased by 35%, and the net loss reduced dramatically. Further, IZEA obtained $1.49 million by private placement of shares and warrants recently. The Securities Purchase Agreement was for private placement of $562,500 (or 22.5 units) at a price of $25,000 per Unit paid in cash. Each Unit consisted of 100,000 shares and two warrants. One Warrant is to purchase 50,000 shares at an exercise price of $0.25 per share and the other Warrant is to purchase 50,000 shares at $0.50 per share. The warrants are exercisable for cash at any time during the five years following the date of issuance. The funding will help the company in its operations. The company may be on course to take advantage of the growth in the social media sponsorship market. Upcoming launch of the Native Ad Exchange is also likely to help the company in increasing the growth in revenues.
The stock seems to be stable, and is looking to make an attempt to cross hurdles. The volumes are not too high, but there is no reason to be too negative on the stock in the short term. The recent earnings were better than expected with 6.5% growth in revenues and 53% rise in net income. The conservative forecast for the third quarter dampened the sentiments a bit, and the reaction to the good earnings was not too positive. In any case, the stock has done well over the last one year. It has appreciated by around 34% despite a 8% correction from the 52 week high made in May. It can resume the uptrend, but may need some positive news flow to get things going. It continues to acquire smaller billboard companies, including substantial acquisitions in California and the Southwest. The "in-fill" acquisitions, totaling $24 million include local companies like Empire Outdoor which owns hundreds of billboards. Its efforts to convert into an REIT may take a bit of time as the IRS is reviewing its policy on the matter. The conversion will help the investors more if the fundamentals continue to improve. The current valuations are high if seen in isolation, as the trailing P/E is 122 and the forward P/E is 47. However, the low PEG of 0.66 indicates expectation of growth in earnings over the next few years. The competition is fragmented, with direct competition from companies like Clear Channel Outdoors (CCO) and other segments like online advertising. Social media sponsorship / native advertising is gaining popularity. IZEA (IZEA), a company operating in this space, reported results of a survey which showed increasing preference of advertisers for using celebrity influence. Lamar is a strong brand, and is likely to do well provided it remains dynamic to take on the competition.
The last few days have seen the stock recover slightly. However, the volumes are not too high, and hence the rally is not totally believable yet. Despite the sharp 25% fall from the 52 week high made in July, the stock is still up by 92% over the last 52 weeks. A recent article on seekingalpha is negative on the stock, and the author says that there are sell signals as the stock has broken below crucial supports. The business model is again being questioned, as the company faces competition from Yelp (YELP) and InterActiveCorp's (IACI) Home adviser. As mentioned in the article, Angie's List spends about 80% of its revenue on sales and marketing, and charges for its services, while competing against Yelp Inc. (YELP) and Home Advisor who offer similar services for free. It has a much lower subscriber growth rate and less unique visitors because it is a paid service. It has 2 million subscribers compared to Yelp which added almost 3.5 million reviews last quarter alone. The number of subscribers is being increased by offering discounts, which will ultimately add to problems by increasing the net loss. The net worth has been eroded by years of losses, and the debt burden of around $14.89 billion is also immense. So the rallies may not be so sustainable. Future growth will be difficult unless there are some remarkable changes in the business model to take on the free service providers. The direct and indirect competition from other emerging segments is also increasing. Paid social content is also being preferred for its influence on customers, at least to kick start a discussion about the product. IZEA (IZEA), which operates in this space reported results of a survey which indicated growing popularity of native ads. For Angie, the shorts were at 41% on August 15 which may lead to volatility in the near future.
The amazing uptrend continues. The stock has moved by around 25% in last one month, and is up by more than 50% after the earnings. The positive surprise added to the already existing momentum. Several analysts had increased the price target for the stock after the earnings, but now it is trading much above most of those figures. There are analysts recommending caution, like an article on insidermonkey, but it seems that it is surely in momentum. On the other hand, in an SA article the author states that a large portion of the up move in the stock has come from positive opinions about Yelp’s ability to continue to grow at a fast rate, and increased confidence in its ability to monetize its content. He contends that the stock has lot of upside potential, but it needs to use data science in order to provide relevancy and trust about its content. This can be accomplished by using a weightage system which will reduce the noise and increase the relevancy of the reviews. Interestingly, the net profit is still a few steps away, and the valuations are extremely stretched. The price to sales and price to book are around of 23, which implies that lot of future positive may have been factored in the stock price. Competition from players like Google (GOOG) and Yahoo (YHOO) cannot be underestimated, and there are other players like IZEA (IZEA) (native advertising, social media sponsorship) which may provide direct and indirect competition in the near future. However, momentum has to be respected, and one can tag along with the stock, but with a clear exit strategy in mind. The next earnings will be extra-risky, and any slippages can lead to a correction in the stock. One can play based on the risk appetite.
The recent upward movement in the stock has been supported by better volumes. This may indicate that the stock may have recovered from the post-earnings fall. A few more days of positive movement are required to confirm this. The article on seekingalpha recently, had given a target of $33 for the stock, which is around the 52 week high made by the stock in May. The author is positive about the company and concluded by saying that 'ValueClick is a quality business, which is generating a lot of shareholder value for both short and long term. The company is being managed, as probably any private equity investor would have managed, using cash to make strategic acquisitions and share buybacks. Stock correction due to a temporary weakness is giving a good opportunity to invest'. The company may be a good long term story, but the sentiments have deteriorated over the past few months due to earnings misses. The last two earnings have led to sell-offs which has spoiled the party. Between October 2012 and May 2013, the stock had doubled, but it has corrected sharply after that. So the short term sentiments may change only if the company is able to do remarkably well in the next few quarters. It needs to beat estimates, and show some consistency in growth. It needs to remain dynamic, and leverage the possibilities in fast growing segments like native advertising / social media. IZEA (IZEA), a company in this field, has done well recently. For ValueClick, the valuations are reasonable, as the trailing P/E is 17.45 and forward P/E is 11.52. The PEG is 0.99, which is indicative of expectations of earnings growth over the next few years. The debt is also at manageable levels and the cash position is good. So it is a company with good potential, but needs show visible improvements soon.
The stock has been under pressure over the last few months. It has declined slightly, but has shown some signs of recovery over the past few sessions. It has delivered great returns to investors over the longer term, and the dividends have increased consistently. Analysts are not too bullish, but there are no serious negative voices either. A recent article on Bristol in seekingalpha has given a price target of $59.50 by 2016, and $80 by end of the decade. The author contends that this translates into a 50% return till 2016 if one factors the dividends. He considers the recent decline in the stock as a buying opportunity. The loss of revenues due to expiring patents is likely to be offset by growth due to new products in other fields like Cancer and Hepatitis C. Further, the buyback program of the company is expected to reduce the share count by 10% till 2016. The author believes that Bristol is expected to become a dominant player in cancer due to its high potential product line in immunotherapy. This segment has a huge potential with expected market size of $35 billion in ten years. However, there are likely to be challenges, and the growth will not be so easy if one considers the patent expirations over the next few years. Further, growth in margins will be a critical factor for Bristol, and that will require continuous efforts on cost control. A pharma company Biozone (BZNE) has been in news recently for its proprietary drug delivery technology (QuSomes) which can help reduce cost of production. Dr. Frost (TEVA, OPKO fame), has a stake in this company. Bristol already has a collaboration with OPKO in diagnostics. So Bristol remains a great story, but it needs to show some improvements in fundamentals so that the uptrend can gain momentum. The dividends growth will be easier if the bottom-line improves.
The stock has done well recently with around 25% appreciation. This is better than the performance over the longer term, when the stock has remained extremely volatile with negative returns (-25%)over the last 5 years. The fundamental performance has been better recently as the net margins have improved. However, the company is still reporting losses on a net basis. Over the last few years, the revenue growth has been exponential, but the company has mostly reported net losses. In 2009, the revenues were $150 million, while in 2012 they were around $650 million. However, the accumulated deficit is around $162 million, which indicates the bottom-line performance. The stock price has remained under pressure partly because of the consistent losses. However, the recent improvements may change the sentiments if the company is able report a few more good quarters. The stock is now trading at 0.46 times sales, and the cash position is good. The long term debt has reduced to around $86 million as on June 30, compared to $197 million at the end of Q1'13. In H1'13 the losses reduced to $6.4 million including preference dividend of $1.08 million and a one time charge of $3.8 million for extinguishment of debt. Importantly, the company is backed by Dr. Phillip Frost, who has done well with several of his investments in the pharma / medical devices sector. Companies like OPKO Health (OPK) and Biozone (BZNE) have done well recently. Ladenburg has the potential to do well, and has not run up much recently. So if it come closer to turnaround, the market will begin to factor that and the stock may do much better. Like all such stories, there is always a risk of slippages, but the rewards are likely to be in proportion. One can play along with a clear exit strategy in mind in case things go bad.
The stock is up 485% on a ytd basis. Announcement of the merger with TransEnterix has led to a huge spike in the stock over the last one month, and it has risen by 100%. CEO of TransEnterix will serve as CEO of the combined entity which will be called TransEnterix. Importantly, billionaire investor Dr. Phillip Frost, who has a significant stake in SafeStitch, has joined the board of the combined entity. It is expected that the merger will help TransEnterix to build upon its ability to bring flexible minimally invasive surgical technologies to market. The funds raised by SafeStitch recently will help TransEnterix develop its robotic system SurgiBot(TM). As mentioned in an article on SA, the merger will give Safestitch the necessary resources to continue developing devices and to begin marketing them. So the merger is expected to help both entities. SafeStitch raised $30.2 million in a private placement of its equity, with TransEnterix investors contributing $19.7 million (65%) and Dr. Frost along with other investors, putting in $10.5 million (35%). Dr. Frost, who is known as an astute investor in the pharma / medical devices sector, has been active with several of his companies recently. He has been continuously exploring synergies between the companies where he has a stake. In the pharma sector, his company OPKO Health (OPK) is working with Biozone (BZNE), another of his companies, to use Biozone's proprietary drug delivery technology to help reduce cost of manufacture of formulations. The technology (QuSomes) is stated to have tremendous potential for Biozone. SafeStitch has already delivered great returns recently, but further movement of the stock will depend on how things progress as far as revenue generation / profitability is concerned. Visible benefits of the merger may take time to reflect in the numbers. So after such a huge rise, it is good to be a bit cautious.
The benefits of the acquisition may take time to translate into revenue and profits, but the spurt in price of OPKO over the last few months has made it a better deal for PROLOR shareholders. A recent article on SA has recommended to buy OPKO due to its innovation pipeline, backing of Dr. Phillip Frost, and a huge short interest which may lead to a surge in demand for the stock. The acquisition is expected to broaden OPKO's portfolio, and strengthen the pipeline of therapeutic and unique diagnostic products. PROLOR's technology platforms and R&D infrastructure are expected support OPKO's growth strategy. However, it is important to remember that the stock is now trading at high valuations, mostly based on future expectations. It is true that the revenues have grown exponentially over the years, but the bottom-line has remained negative. The debt is also a bit high. On the positive side, OPKO's 4KScore diagnostic test could generate significant annual revenues (estimated at $1.8 billion) in due course, which could easily take care of the negatives in the balance sheet. Dr. Frost's active presence on the board and as an investor is a major reason to remain confident about the company's prospects. Frost looks for synergies between his various companies. For example, OPKO has an agreement with Biozone (BZNE), another company where he has a stake, to use / explore the possibilities related to Biozone's proprietary drug delivery technology (QuSomes). The delivery technology can help in reducing cost of manufacture of formulations. QuSomes are likely to be in great demand from pharmaceuticals companies who are looking for more cost effective methods of manufacture of formulations / injectables. So OPKO has a lot of potential, but the huge run up in price is surely a reason to remain a bit cautious.
The last few sessions have been better for Pershing Gold. It has become a bit more stable, and looks sturdy to make the next move. It is difficult to rule out a strong move, but it is difficult to say for sure when it will happen. The volumes have been high recently, mainly due to the funding received by the company from the insiders. Barry Honig has more than 15 million shares now. Volume was above 4 million shares a few days ago, and the short term average is nearly double the three month figure. The quantum of funding and the price at which it was achieved makes it easier for the management to execute its plans for the next few quarters. With insiders betting so much on the company, it is quite possible that there may be some major development over the next few months. The company is now in a better position to bargain a good price in case some investor wants to buy a major stake. The overall improvement in the sentiments for the sector may also help. Price of gold will be the main factor going forward. It has shown some slowing down recently, but is showing some resilience by bouncing from important levels. The lower levels are expected to provide support. On the other hand, a break below crucial levels, will weaken the sentiments, and things will get difficult. Many analysts think that $1200 may be a short term bottom for gold. As of now, that is pretty far away, and it will take a lot of negative news to get there. Development stage companies which have not participated in the rally so far may begin to do so based on merits. Pershing scores on important metrics like leverage and production cost. Both these are critical factors for measuring the riskiness of the company in the present environment.
As per the 8K filed a few days ago, between August 26-30, IZEA entered into a Securities Purchase Agreement for private placement of $562,500 (or 22.5 units) at a price of $25,000 per Unit paid in cash. Each Unit consisted of 100,000 shares common stock shares together with two warrants. The Warrants were composed of one Warrant to purchase 50,000 shares of Common Stock at an exercise price of $0.25 per share and another Warrant to purchase 50,000 shares of Common Stock at an exercise price of $0.50 per share. Both warrants are exercisable for cash at any time during the five years following the date of issuance. As a result of this placement, the company issued 2.25 million shares and issued fully-exercisable warrants to purchase up to an additional 2.25 million shares. Due to the recent private placements (including the current one), the company received gross proceeds of around $1.49 million. The proceeds will be used for general working capital purposes. As per a survey conducted by IZEA, most of the companies now have a separate budget for social media, and online advertising, especially display advertising is getting saturated. As per eMarketer, native ad spending will increase by 75% over the next two years to $2.85 billion by 2014. In Q2'13, IZEA reduced losses substantially, and the improvements can take to the break even point over the next few quarters. The company booked $3.45 million in sales during the first half of 2013, or $6.9 million on an annualized run-rate basis. Importantly, the operating expenses decreased by 35.4% due to decreased professional, payroll and marketing expenses. Net loss reduced from $2.46 per share in H1'12 to 25 cents for the first six months of 2013. The valuations will change dramatically if the company continues to show visible improvements in the margins.