Oct 16, 2009 @ 12:44 PM PDT
When the recession hit, Audiovox was already in the process of cutting its fat, whereas other companies were only just beginning.
GERN: Publication Affirms GERN Drug Potential before Trial Re-start in Q3
ZOLL: FY 09 Down from 08; ZOLL still Posts a Positive $0.45 EPS for 09
CBEY: Q3 09 Revenues up 17% Y-O-Y; but Posts Net Income Loss in Q3 09
Institutions Rally a CBEY Value Gain
Gaining 7.54% this morning is Geron Corporation (GERN) http://www.geron.com/ currently trading in the $5.80 range. GERN is a very heavily traded SmallCap. GERN has a 52-week high of $9.24 set on 07-27-09. I believe the chart below shows that $5.50 is a constant for the stock price. When GERN and the FDA agreed in mid-October to put GERN's primary stem cell drug on 'clinical hold' for the time being, the stock dropped from the $7.50 range back to its $5 range.
With good pre-trial re-start news like today, I believe GERN can once again ascend to the $7.50 range in the near-term (3 Mo) and once the trial is underway and on the first move from Phase I to Phase II in the short-term (6 Mo), GERN can re-set a new 52-week high. This is a Short-term 'Buy' for me.
The GERN news today that rallied investor support came from a publication called Stem Cell where oligodendrocyte progenitor cells (OPCs) derived from human embryonic stem cells (hESCs), when transplanted into a rodent model of cervical spinal cord injury, reduced tissue damage within the lesion and improved recovery of locomotor function.
The publication data supports GERN's GRNOPC1 product which addresses cervical spinal cord injuries. Over half of the 11,000 human spinal cord injuries that are sustained in the U.S. annually are in the cervical region.
Thomas B. Okarma, Ph.D., M.D., Geron's president and CEO said, "These preclinical studies demonstrate that transplantation of hESC-derived OPCs resulted in sparing of spinal cord tissue in the cervical lesion site. This sparing starts very soon after injection and importantly, results in the preservation of motor neurons which is correlated to recovery of forelimb movement."
Analysts are mixed on GERN: In late October, Merriman upgraded the stock from a 'Neutral' to a 'Buy' and on November 2, Needham downgraded the stock from a 'Buy' to a 'Hold'. As we use to say in Media Relations; Clear as Mud. GERN is still a 'Buy' for me at a little more than half its 52-week high and an 'active' pipeline.
GERN intends on reinitiating its Phase I trial of GRNOPC1 in Q3 2010. GERN is currently in trials with cancer drugs GRNVAC1, which is in a mid-stage trial, and cancer drug GRN1631, which is in an early-stage trial.
Sign-up for Free to Receive Future Commentary on the Bio-Pharmaceutical Sector.
GERN 1-Month GERN 3-Month
Gaining 11.57% this morning is S&P SmallCap 600 company ZOLL Medical Corporation (ZOLL) http://www.zoll.com/ currently trading in the $22.57 range. ZOLL zipped right past its 3-Month average daily trading volume early in the session this morning. Lots of enthusiasm for ZOLL on its FY 2009 numbers released yesterday after market.
At $22.57, ZOLL is approximately 49 cents off its 52-week high of $23.06 set on 10-08-09. This is a 'Watch Closely' stock for me with a strong leaning towards the Buy-Side. I like that ZOLL has trailing twelve month revenues of $382 million and produced a positive $0.70 diluted EPS for shareholders during the 'great recession'.
The chart below displays ZOLL's $18-22 climb from September to October driven, I believe, by being listed in Fortune Magazines 'fastest growing 100 companies' and a ZOLL military contract to provide the U.S. military with defibrillators. Then the stock took a plunge from $23 to $19 with no discernable cause. I believe short-sellers (who have claim on approximately 5% of ZOLL's outstanding shares) sold the stock down.
As I said, yesterday, after market, ZOLL announced that its FY 2009 revenues were $385.2 million, compared to FY 2008 revenues of $398.0 million, a decline of 3%.
ZOLL FY 2009 Compared to FY 2008
ZOLL management said revenue results reflected a negative foreign exchange impact of nearly $12 million compared to fiscal 2008. That tricky 'ol dollar. ZOLL net income for FY 09 was $9.6 million, compared to $23.4 million FY 08. Diluted EPS were $0.45 for FY 09 compared to $1.10 in FY 08. Sales to the North American hospital market decreased 20% to $93.3 million, compared to $117.1 million in FY 08. U.S. Military sales were $24.7 million, compared to $26.2 million in FY 08. ZOLL also posted minor increases: Sales to the North American pre-hospital market increased 6% to $171.2 million, compared to $161.7 million in FY 08 and international revenues increased by 1% to $97.6 million, compared to $96.6 million in FY 08.
A Tough Q4 2009 for ZOLL
ZOLL Q4 2009 revenues to end the FY increased 2% to $107.9 million, compared to $105.6 million in Q4 08. Q4 09 net income decreased 62% to $3.4 million, compared to $8.9 million in Q4 08. ZOLL diluted EPS in Q4 decreased 61% to $0.16 per share, compared to $0.41 in Q4 08. Richard A. Packer, CEO of ZOLL, said, "We see our fourth quarter results as a step in the right direction. We saw strong orders in Q4 as evidenced by our significant growth in backlog. Our ending backlog more than doubled compared to a year ago and the pipeline looks better than that of the previous six months."
ZOLL products include: pacing, defibrillation, circulation, ventilation, and fluid resuscitation devices that enable clinicians, emergency medical services (EMS) professionals, and lay rescuers to resuscitate sudden cardiac arrest or trauma victims.
ZOLL CBEY
Gaining 7.37% this morning is S&P SmallCap 600 company Cbeyond, Inc., (CBEY) http://www.cbeyond.net/ currently trading in the $11.85 range. CBEY more than tripled its 3-Month average daily trading volume early in today's session. CBEY is one of those paradoxical stocks one sees from time-to-time.
Downgraded today from 'Sector Perform' to 'Underperform' by RBC Capital Markets and posting a net loss in Q3 of $1 million on November 11, 2009, CBEY still posts daily gains. How can that be? Institutional support. Or so I believe. CBEY has a 52-week high of $20.80 set on 04-30-09 with trailing twelve month revenues of $399 million.
A lot of institutions own CBEY and I believe they are willing to 'buy' and aggregate their positions. CBEY looks as though it were attempting to set a $16 benchmark as a floor, but started dropping in mid-October. Now in the $12 range, I don't believe institutional holders are going to let it fall to half of its 52-week high and will rally to support it at today's level (like they did this morning).
The CBEY Q3 2009 numbers of November 4 weren't all that bad. As a matter of fact, CBEY posted a Q3 09 17.4% revenue gain over Q3 08 and posted a 19.7% increase y-o-y in customer additions. CBEY currently has 48,580 customers in the 12 markets it serves with voice, broadband and mobile services. The CPEY churn rate of customers for the sequential quarters of Q2 09 through Q3 09 was essentially flat with the company adding 2,175 customers in Q3 09 (CBEY's highest level of gross customer additions). This is a 'Watch Closely' stock for me.
If you'd like to know of any changes in our opinion of GERN, ZOLL, or CBEY
(or if SCN officially recommends them as trades)
be sure to sign up for our free weekly newsletter today.
