Stock(ing) Stuffers: CVM, NVLT, RXII, CYTR, MCLN and BMTL PDF | Print | E-mail Written by M.E.Garza Monday, 21 December 2009 07:08
The one question everyone keeps asking me is: "What stocks should I be holding during the holiday break as I head off to spend time with my family?"
While I tend not to answer individual emails about a particular stock, I will share some thoughts about half a dozen stocks that I have a great deal of knowledge about. That may help provide some guidance to our readers- or not.
First, it should be no surprise that I'm a fan of CEL-SCI Corporation (AMEX:CVM). I've been covering the stock since it was trading at $.29 earlier this year. The biggest concern people have had is whether or not the opening of new state-of-the-art cold fill lab is running behind schedule. It isn't. The lab is done. The part that is running behind schedule is the validation of the plant. I'm told that the validation should happen within the next couple of weeks and that the moment it does, the production of Multikine®, CEL-SCI's promising flagship cancer product which is headed to Phase III trials will begin.
Paid bashers and shorters have taken control of the stock using their favorite scare tactics, but the stock has been been holding it's own despite their best efforts. At one point recently, the NASDAQ, on its own motion and investigations quietly cancelled a big chunk of short trades involving CEL-SCI securities which were executed in a suspicious manner and detected by their MarketWatch alert system. The exchange coordinated their decision with other UTP Exchanges and they all agreed that something odd had taken place. Unanimously, all the other exchanges agreed to cancel the trades. As a result, a representative at NASDAQ MarketWatch told me that records of the firm(s) involved in trying to short the stock as part of a coordinated effort were now being investigated and that they were trying to identify other trading patterns and time-lines by those groups.
How refreshing is that? We actually get to chalk one up for the little guys, and give thanks to more alert exchanges and enforcement entities, both of whom are under orders by the current administration to reign in these types of activities.
We know of at least one firm, that has issued letters to large shareholders of CVM stock asking them to let them borrow shares of the company (for the purposes of shorting the stock) at a premium. A scan of one of those letters is here.
I think the bashers and shorters may want to start to cover as the company is poised to continue on to their next phase of development and their long awaited beginning of Phase III trails. The company's L.E.A.P.S. H1N1 treatment studies are also progressing very well, I am told.
I think two big winners going into 2010 will be Novelos Therapeutics' (OTC: NVLT) and RXi Pharmaceuticals (Nasdaq: RXII).
I recently spoke, at length, to the CEO of Novelos and he's expecting a Dendreon type move for the share price of NVLT as he eyes "revolutionary" Phase III results for the company's NOV-002 oncology treatment compound. I rarely hear a CEO talk so openly and bullishly about their own companies (mostly due to strict "forward-looking" rules and laws). After studying all the information and recent filings by the company, it's easy to see that these guys are very excited about their drug compound. It's become pretty obvious, even to the most casual observer, that the patients involved in the trial are living longer than expected and that is one of the reasons why investors have begun to take more interest in the company and their Phase III study.
As far as RXII is concerned, our paid subscribers were alerted mid-month that big-pharma partnership rumors were swirling. Shares have been on a tear since and I would expect that trend to continue until the other shoe drops- and perhaps even beyond that point if the company's RNA interference for the treatment of human diseases is validated by just such a partnership. I can tell you that big investment banks and institutional firms have begun to take note of RXII and their parent company, CytRx Corporation (Nasdaq: CYTR). Unlike day traders, those firms will buy and hold shares of the companies and that is generally why investors consider such ownership a good indicator for "safe investment bets." RXII has such a small float that you'll probably drive the stock price up on your own if you try to buy a large quantity of shares, so keep that in mind if big news hits. The stock price could very well shoot up given the float size alone. Remember also that as RXII shares rise in price, so do shares of CYTR.
CYTR is rumored to have some big things in store as well, but their biggest challenge has been getting past the "overhang" cooked in to their share price. If CYTR is able to move into $2 territory, don't be surprised to see them spring for one of those rumored acquisitions I wrote about when I told readers that the company was starting to look like a very solid rebound play in late November.
Readers have been asking whether the company will have to raise additional funds to acquire one of those developmental stage oncology biotech firms whose tires they've been kicking or whether the company already has enough cash in in their plentiful coffers. I guess we'll have to wait and see. CytRx CEO, Steve Kriegsman is not shy about raising money, but he is also exceptionally good at bargain hunting. His record and background in investment banking speaks for itself. Over the years he has picked winner after winner and track record is ultimately what one should bank on when buying into any stock.
Speaking of that, why are people still stressing over the day to day price of shares of MedClean Technologies, Inc (MCLN.OB)? That company not only has a solid management team with a great track record of their own, but they are a profitable penny stock company with lots of pending orders and a much needed green technology that hospitals can either buy, lease or rent under very favorable economic terms. Hello? Do some of these people even know how rare it is to find any single one of those factors, much less a winning combination of all of those in a penny stock trading under $1? It's hard to believe that shares of this gem can still be had for under $.03? Maybe some of these OTC traders are worried that the company has had to raise money in order to fill some of those pending orders? Here's a clue. Companies sometimes need money to make more money. These guys are a fully reporting company that is working hard to do just that. Unlike some OTC traded stocks they're not using credit line funds to pay utility bills.
At some point, you have to wonder how people miss the boat on great finds like MedClean. Then again, most OTC traders are probably not used to asking themselves one simple question: "What's the upside on this one and what's my downside risk?"
As one analyst said best: "The Regulated Medical Waste (RMW) Disposal space is one of the most critical segments of the health care sector. According to recent industry reports, and our estimates, the RMW disposal market is a $2.0 billion business annually, and is expected to reach $2.6 billion by the end of 2012. The RMW segment is a vital cog in the health care services food chain and MedClean offers hospitals and clinics unique advantages compared to its off-site disposal competitors. MedClean’s solutions ensure cost-savings, reporting compliance, and limit the frequency of hazardous waste handling opportunities. Management’s previous successes give us great confidence that MedClean will become a top-tier player in relatively short order. During the executive management team’s tenure at eResearch Technology, the Company grew from a sub-$50M market capitalization to $1.5 billion."
So do your own math. As you can figure out by reading their own recent filings, the company has a back-log of orders to fill. If they made and reported the profits they did last quarter on such few installations, what are the odds that they'll be reporting higher earnings next quarter? I said it then and I'll say it again. I'm not only holding all my shares, I'm adding more.
In the same regulated medical waste sector, I still like some of the things I'm hearing at BioMedical Technology Solutions (OTC:BMTL) including the fact that ambulance power-house American Medical Response is jumping in bed with them. The company is rumored to have some orders coming for their innovative Demolizer® technology- which we wrote about in early December. We'll see if some of those sales milestones are met going into 2010. Things could really get going for BMTL if their planned home unit version is the hit they are expecting it to be as well. That's another play with a very low float that could move big on news.
May you and yours have a safe and happy holiday season!
Can't wait to see what 2010 holds in store for biotech, healthcare and the rest of the market as well.
Disclosure: Long CVM, NVLT, RXII, CYTR, MCLN and BMTL
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