Archive for January, 2009

Stem Cell Buzz Stocks- STEM, GERN and ISCO

Monday, January 26th, 2009

Last Friday, the BBC reported that U.S. regulators have cleared the way for the world’s first study on human embryonic stem cell therapy.

After months of consideration, the FDA gave the go-ahead for the test. The approval of the 21,000 page application came days after President Barack Obama’s inauguration. Although the FDA’s decision is independent of White House Control, many are expecting Obama to adopt a more pragmatic and science-oriented approach to stem cell research than his predecessor.

Embryonic stem cells are unspecialized cells capable of turning into a wide variety of other cells. They are collected by cloning embryos in a laboratory, but the embryo is destroyed in the process. They were a hotly contended issue throughout George W. Bush’s presidency, with a ban on public research funding.

Here are a few buzz stocks specializing in stem cell research:

1. Stem Cells, Inc. (Nasdaq: STEM)– The Palo Alto-based company just received FDA approval to begin a clinical trial of a product candidate to treat Pelizaeus-Merzbacher Disease (PMD), a fatal brain disorder that affects young children. The company has a pro forma cash balance of about $40 million, counting the $20 million equity financing it just closed.

2. Geron Corp. (Nasdaq: GERN) – The company whose 21,000 page application was approved by the FDA. Geron plans to begin testing a treatment using embryonic stem cells that could fix major spinal cord injuries in people. Although the initial study is small, and will mainly focus on safety, the development process is expected to set the tone for this kind of research, how the FDA looks at it, and the pricing of any drugs that may result from it.

3. International Stem Cell Corp (OTCBB: ISCO)– The company just received the second $1 million tranche under a $5 million financing. ISCO’s “Parthenogenesis” technology results in the creation of cell lines that may allow cells from a single donor to be immune-matched to hundreds of millions of people. This could potentially reduce a lot of the dangers associated with immune rejection–a big problem with using embryonic stem cells.

Here’s a cool video explaining why the FDA approval is so significant:

Energy Buzz Stocks- JCI, ACI, CVA

Friday, January 16th, 2009

In no particular order:

1. Coal makes a comeback: Formed from the compressed plant matter trapped under rocks and dirt for millions of years, coal accounted for about 27 percent of the world’s energy consumption, and is expected to increase by 2.6 percent every year until 2015. It’s cheap, and a lot more available in countries with voracious appetites for energylike the U.S., India, and China. Kiplinger recently published an article hailing coal as the “new black gold,” that will be touted as a “homegrown solution to ease U.S. reliance on oil imports, which now account for nearly two-thirds of daily usage.” Coal-to-fuel technologies are all but here, and it’s only a matter of time before the treehuggers get on the coal bandwagon, as well.

2. Russia gets the cold shoulder from the EU: About 39 percent of the European Union’s natural gas imports come from Russia. The demand for natural gas is expected to increase about 1 percent per-year for OECD countries, and 2.3% for non-OECD countries. Russia knows that it can call the shots when it comes to price from western and central European countries, once business from China picks up. Expect the EU to continue to launch new initiatives aimed at reducing its dependent on Russia including pipelines, and LNG re-gasification terminals to serve as a more reliable substitute for future natural gas supplies.

3. Oil prices stabilize within a narrow band by the end of the year: High oil prices that were buoyed for so long by bottlenecks, a bigger appetite, and speculation, has resulted in lower demand in OECD countries, especially the United States. Market researcher, Global Information, Inc., recently issued a statement predicting lower prices in the short-term, and further efforts by OPEC, which accounts for roughly 40% of the total oil production, to further try and control supply and reduce production.

Here are a few Energy Buzz Stocks we’re keeping an eye on:

Johnson Controls (JCI)
: This clean energy company just signed a joint venture with Saft to produce batteries for hybrid and electric vehicles. Known for its energy saving technology, which has applications in everything from the automotive to the industrial sector, JCI could be a big winner in the coming year.

Arch Coal (NYSE: ACI) – The stock has been crushed lately, and trades near its 52-week low. The company’s Q3 profit tripled over last year, and management was bullish on the long-term fundamental strength of the coal market. Recently trading for about $16.50 a share, ACI seems like a great opportunity at this price.

Covanta Holdings (NYSE: CVA)– Do you remember how the Flux Capacitor worked after Doc Brown flew back to 1985 from the future? Well, the future is here. This company can burn garbage instead of fossil fuels to produce electricity–clean electricity. Their waste-to-energy technology reduces greenhouse gases, lowers the risk of groundwater contamination, and reduces dependence on fossil fuels. Every year, Covanta converts 16 million tons of waste into 8 million megawatt hours of clean, renewable electricity. The company has had quarterly earnings growth of about 29 percent, and has more than $169 million of cash on hand.

Top 10 Buzz Stocks for 2009- AAPL, AVAV, ENER, FLR, EDU, SPWRA, TER, PEP, STJ, CHU

Tuesday, January 13th, 2009

Here’s a list of the Top 10 Buzz Stocks (in no particular order) to keep on your radar in 2009:

10. Apple (Nasdaq: AAPL)– best in class in almost every category they compete in; staying power, innovation, and a lot of growth here.

9. AeroVironment (Nasdaq: AVAV)– Promising projects in wind power and unmanned vehicles.

8. Energy Conversion Devices (Nasdaq: ENER)– A company in Obama’s sweet spot.

7. Fluor Corp. (NYSE: FLR)– Major player in engineering, construction, maintenance and procurement.

6. New Oriental Education (NYSE: EDU)– The biggest college prep and English instruction school in China.

5. SunPower (Nasdaq: SPWRA)- Another infrastructure play whose technology could become a mainstay in national energy policy.

4. Teradyne (NYSE: TER)– Chips need testing. This is a company with great semiconductor diagnostic technology that is primed to benefit once the chip market bounces back. Solid balance sheet–a lot more solid than many of its competitors.

3. PepsiCo (NYSE: PEP)– PEP shares have fallen from their January ’08 peak, and are a bargain where they trade right now. The company has also been a corporate leader in the push for green technologies, and is truly a global play.

2. St. Jude Medical (NYSE: STJ)– Life-saving devices that target heart disease. Higher than expected Q3 sales, and well insulated from macro turmoil.

1. China Unicom Ltd. (NYSE: CHU)– Well insulated from global turmoil; Trading at a very low earnings multiple. The company is one of only a handful of telecom players in 31 provinces, municipalities and autonomous regions in China. CHU also provides data and Internet services. If you think China will get more connected in the next year, CHU is a great play to ride that wave.

Best infrastructure stocks- ETN, BAM, JEC

Monday, January 12th, 2009

There’s a lot of buzz on the Street about infrastructure stocks leading the bull market’s charge. Irrational exuberance is what got us here in the first place. So it behooves any one thinking about riding the infrastructure ‘boom’ to remain on the side of caution.

What constitutes an infrastructure stock?

Many point to companies that build roads, bridges, high-speed railway systems, water infrastructure, transportation systems, and green infrastructure.

Here are our top 3 infrastructure buzz stocks:

1. Eaton Corp. (NYSE: ETN): This $8 billion power solutions company has a trailing P/E of 6.8, 22 percent quarterly earnings growth (yoy), and gross profit of $3.6 billion. The stock has gotten crushed over 41% over the last year, which could be a sign that it’s ready to pop back up.

2. Brookfield Asset Management (NYSE: BAM): With nearly $50 billion in assets focused on the property, power, and infrastructure sectors, the first noise you hear from the infrastructure boom could be “BAM.” Brookfield has taken a beating, just like Eaton–falling almost 43 percent in the last year. Fundamentally, the company has quarterly earnings growth of about 84 percent, and more than $1 billion of cash.

3. Jacobs Engineering Group (NYSE: JEC):Jacobs provides engineering, architectural, technical, professional, and construction services to industrial and government organizations. The company has an operating margin of about 5.7 percent, and quarterly earnings growth of more than 35 percent. Another battered stock, shares of Jacob are down about 42 percent this year.

The New New Deal

The New New Deal, promises to fix our crumbling pipes, expand our highways, fix our bridges, and lay a foundation for a new way of life.

But is it just a band-aid covering up a festering wound?

Here’s an interesting video on whether or not FDR’s New Deal was a true solution, or just smoke and mirrors:

Is infrastructure the answer? Only time will tell. But if President-Elect Barack Obama is going to follow in the footsteps of FDR, infrastructure stocks will see some gains. How long those gains sustain is anyone’s guess.

Is McDonald’s Recession Proof?

Thursday, January 8th, 2009

Is burger giant McDonald’s recession proof? According to Forbes

McDonalds announced year-to-year same-store sales rose 8.2% in October. In the United States, sales rose 5.3%, while Europe saw a 9.8% increase. Sales rose 11.5% in the Oak Brook, Ill., company’s Asia/Pacific, Middle East and Africa division.¬†Shares of McDonald’s rose 1.5%, or 85 cents, to $56.35, in late trading.

It looks as though McDonald’s is not only recession proof but thriving on penny pincher’s devouring $.99 Double Cheeseburgers from the Value-Menu.
Although this video says Diffrent.

The stock market tells the story: While the Dow Jones industrial average has dropped 31.9% over the past year McDonald’s has only dropped 3.4%. That’s better than its fast-food rival like Burger King, down 24.6% and significantly ahead of casual-dining companies like Ruby Tuesday, which has fallen 88.3%.