Archive for October, 2009

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Starent Networks (Nasdaq: STAR) Buzz Stock of the Day

Tuesday, October 13th, 2009

Shares of mobile infrastructure equipment maker Starent Networks (Nasdaq: STAR) soared nearly 19 percent in morning trading after telecommunications giant Cisco Systems, Inc. (Nasdaq: CSCO) announced it would acquire Starent for $2.9 billion to strengthen its high-speed wireless services business. Cisco will pay a 20 percent premium, or $35 a share in cash for Starent.

The deal is expected to close in the first half of CY2010. Cisco anticipates the acquisition will hurt earnings for fiscal years 2010 and 2011, but believes it will add to its bottom line in fiscal 2012.

Starent Networks marks the second multi-billion dollar deal for Cisco in less than three weeks. It follows the company’s Oct. 1 announcement that it plans to buy video conferencing equipment maker Tandberg for $3 billion.

“We are very pleased that Starent Networks will be joining the Cisco team, and we believe their products and engineering talent will greatly benefit our Service Provider customers as they build out their Mobile Internet offerings,” said Cisco Chief Executive Officer John Chambers in a statement.

Starent makes network equipment that fits between the radio access network and the core network of mobile phone service providers that include Sprint and Verizon Wireless. Cisco said there was some overlap in their products, but that their offerings would for most part be complementary.

After the deal closes, Starent will become part of Cisco’s service provider business, but as a new Mobile Internet Technology Group, headed by current Starent CEO Ashraf Dahod, who stands to gain substantially from the acquisition. As of Starent’s proxy filing in January, Dahod owned 6.9 million shares. At Cisco’s proposed price of $35 a share, Dahod’s stake would be worth approximately $241 million today.

The acquisition of Starent has raised some red flags and is currently being investigated by Levi & Korsinsky, LLP, for possible breaches of fiduciary duty and other violations of state law. For the year ending December 31, 2008, the Company reported revenues of $254,076,000 and net income of $60,524,000 as compared to revenues of $145,797,000 and net income of $5,485,000 for the year ended December 31, 2007.

The investigation looks into whether Starent’s Board of Directors breached their fiduciary duties to Starent shareholders by agreeing to sell the Company at an unfair price.

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Sinoenergy Corp. (Nasdaq: SNEN) Buzz Stock of the Day

Monday, October 12th, 2009

Shares of Chinese natural gas developer Sinoenergy Corp. (Nasdaq: SNEN) ) rose 53 cents, or 41.5 percent, to $1.81 in morning trading Monday after the company announced that it will be taken private through a merger with Skywide Capital Management Ltd.

Skywide, which is owned by Sinoenergy chairman, Tianzhou Deng, and its president, Bo Huang, is Sinoenergy’s largest shareholder, holding 39.06 percent of the company’s outstanding common stock.
Shareholders of Sinoenergy will receive $1.90 per-share when the merger is completed. That amounts to a total value of about $30.3 million, a 48.4 percent premium over Sinoenergy’s closing price of $1.28 per share on Friday.
Sinoenergy’s board of directors approved the merger upon the recommendation of a special committee of the board consisting solely of independent directors. Brean Murray, Carret & Co. served as financial advisor to the Company in this transaction and rendered a fairness opinion to the special committee with respect to the transaction.
The deal is subject to the approval of majority shareholders and customary closing conditions.

The merger comes after a tumultuous year for Sinoenergy, which recorded a total loss for the second quarter of more than $2 million. The loss was due in part to an operating loss of $1 million and more than $1.1 million in losses from unpaid rent from lessee Qingdao Mingcheng Real Estate, Co., which leased a downtown facility from Sinoenergy for a three year term at RMB 40 million per-year. Sinoenergy had received only one payment of RMB 10 million from Qingdao Mincheng.

“We understand that there are serious problems with Mingcheng’s operations and investments in the current tough real estate market,” said Sinoenergy CEO Bo Huang in March.

“While we are striving to improve our operations, and hoping for an upturn after the challenging second quarter, but as the Mingcheng case illustrates, the Company is subject to domestic and even global economic conditions that are beyond our control.”

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CalAmp Corp. (NasdaqGS: CAMP) Buzz Stock of the Day

Thursday, October 8th, 2009

Shares of wireless communication solutions provider, CalAmp Corp.(NASDAQ: CAMP) jumped more than 18 percent in morning trading Thursday, reaching a high of $2.60 from the previous day’s close of $2.20.

The boost could be attributed to the company’s second quarter conference call scheduled for after the closing bell today.

“Based on our current forecast, we believe fiscal 2010 second quarter consolidated revenues will show a sequential increase and be in the range of $23 to $25 million, with a GAAP basis net loss in the range of $0.06 to $0.10 per diluted share,” said CalAmp’s president and chief executive officer, Rick Gold in the company’s first quarter earnings release.

Based in Oxnard, Calif., CalAmp provides wireless communications solutions that enable anytime/anywhere access to critical data and content. The Company serves customers in the public safety, industrial monitoring and controls, mobile resource management and direct broadcast satellite markets.

The Company’s Wireless DataCom business segment recently inked a deal to provide a WiMAX version of its Dataradio Sentry 4G™ Wireless IP Router to Elster, a leading provider of smart grid solutions. CalAmp’s WiMAX solution is expected to provide better performance for Elster’s smart grid activities including advanced metering, demand response and distribution automation as well as mobile applications such as fleet management.

“CalAmp’s Dataradio Sentry 4G Wireless IP Router provides industrial/utility-grade, and secure multi-network wireless connectivity for Elster’s solution as well as for other devices,” said Rick Nozel, vice president of sales and marketing for CalAmp’s wireless networks business. “With our combined product portfolio, utilities can deploy a single network infrastructure capable of serving the unified communications needs for both their mobile fleet applications as well as fixed grid applications like AMI, demand response, transmission, substation, and distribution monitoring and automation.”

Smart grid technology like Elster’s has revolutionized energy consumption monitoring by combining wireless technology, sensors and software, as well as ‘smart meters’ implemented for tracking.

The IP-based smart grid model helps customers understand overall consumption patterns and allows for more intelligent decisions about power use. Additionally, the smart grid technology will also help to enhance reliability and energy efficiency, lower power-line losses and provide utilities with the ability to remotely automate services.

“There are increasing indications that our business is in the early stages of a recovery,” said Gold. “We now expect that CalAmp will be profitable on a GAAP basis in the second half of fiscal 2010 with quarterly revenues in the range of $26 to $32 million.”

CalAmp shares are up nearly 200 percent in the past 3-months.

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Labopharm, Inc. (Nasdaq: DDSS) Buzz Stock of the Day

Wednesday, October 7th, 2009

Shares of Labopharm, Inc.(NASDAQ: DDSS) surged 50 percent in trading Wednesday after the company announced that the manufacturer of the active ingredient in Labopharm’s novel anti-depression medication had been given the green light from the US Food and Drug Administration (FDA) to reopen its manufacturing facility, which had been closed following FDA inspection in June and July of this year.

In a letter received by Labopharm, the FDA states that Angelini, the manufacturer of the active pharmaceutical ingredient (API) for Labopharm’s novel trazodone formulation, has sufficiently addressed all the deficiencies cited during inspections in June and July. The letter also states that the FDA now classifies the manufacturing facility as acceptable.

The letter received today from the FDA comes after another received by the Company on July 17, 2009, in which the FDA informed the Labopharma that it’s new drug application for its novel trazodone formulation could not be approved in its present form due to the deficiencies at the API supplier’s manufacturing facility, although it was stated that the deficiencies were not efficacy or safety issues.

Trazodone, Labopharma’s second product, is a psychoactive compound with anti-depressant and sedative properties that also encompasses the Company’s proprietary controlled-release technologies. Trazodone is currently awaiting FDA approval.

Labopharm Inc. is an emerging biopharmaceutical company that specializes in improving and optimizing existing small-capsule drugs using proprietary time-release technologies. The Company’s first product, a once-daily time-release treatment for chronic pain is sold in 17 countries worldwide in major markets such as US, Canada, and Europe.

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FONAR Corporation (NasdaqCM: FONR) Buzz Stock of the Day

Tuesday, October 6th, 2009

Shares of MRI device maker, FONAR Corporation (NasdaqCM: FONR) were up more than 113 percent in early trading Tuesday after the company announced that it was profitable for the fiscal year ended June 30, 2009.

“We are very pleased to see the Company return to profitability,” said FONAR’s chairman and president, Raymond Damadian. “We have now made a profit for three quarters straight and are hopeful to continue this trend of profitability. A very sound reason is that the FONAR UPRIGHT® Multi-Position™ MRI technology (Dynamic MRI) is the only participant in this unique market.”

Profit for the full-year ended June 30 increased to $1.1 million or 21 cents per share, compared to a loss of $13.5 million, or $2.76 per share a year ago. Included in net income for the year ended June 30, 2009 is a pre-tax gain on the sale of a subsidiary of $1.4 million. Revenue for the year was up 12 percent to $39.7 million, compared with $35.6 million a year ago.

The FONAR UPRIGHT® Multi-Position™ MRI technology (Dynamic MRI) has played a big role in the company’s continued growth. The technology allows patients to stand, sit and perform the exact movements that cause them pain, allowing for improved and more exact imaging.

Revenues in the fiscal year ended June 30, 2009 from product sales of the FONAR UPRIGHT® Multi-Position™ MRI scanners increased 48 percent to $16.6 million for the year, compared with $11.2 million in the same period a year ago. There were 137 FONAR UPRIGHT® Multi-Position™ MRI scanners installed in the United States and around the world. The backlog for the MRI product was $25.7 million as of June 30, 2009.

“The Company has done well controlling costs while continuing to produce the FONAR UPRIGHT® Multi-Position™ MRI scanner,” said Damadian. “This is the result of a cost cutting program that we initiated over a year ago.”

Total costs and expenses related to operations decreased 23 percent to $40.4 million, from $52.5 million in the fiscal year ended June 30, 2008.

FONAR Corporation is responsible for inventing the scientific process of MR Scanning™, which is the basis for all MRI images ever created.

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