Archive for April, 2009

« Older Entries
Newer Entries »

Buzz Stock of the Day – DryShips, Inc. (DRYS)

Friday, April 17th, 2009


Greek dry bulk carrier, and our Buzz Stock of the Day — DryShips, Inc. (Nasdaq: DRYS) recently completed its at-the-market equity offering of $500 million, which should strengthen the company’s balance sheet and reduce its debt.

The company now has about 184.8 million common shares outstanding, and a market cap of slightly more than $1 billion.

CEO George Economou said in a statement that the “primary equity that we have raised has significantly improved our balance sheet and liquidity, and will enable us to continue reducing our debt obligations.”

Oppenheimer & Co. just upgraded DryShips to “outperform” from “perform” primarily because of the equity offering.

“We see upside potential based on the end of the company’s $500 million ATM offering, which removes consistent overhead supply that has been one of the causes of the stock price underperformance year-to-date,” analyst Scott Burk wrote in a note to clients. Oppenheimer established an $8 price target on DryShips, which has shed more than half its value since the end of January.

Earlier this week DryShips announced that its wholly owned subsidiary Ocean Rig ASA signed a three-year, $630 million contract with Petrobras for exploration drilling in the Black Sea.

The contract is for use of Ocean Rig’s semi-submersible rig, the Leiv Eiriksson, and is expected to commence in direct continuation from DryShips’ current contract with Royal Dutch Shell and includes about 60 days of mobilization, disassembly and reassembly of the derrick structure, and an incentive bonus of 8 percent.

DryShips’ stock has been hammered over the last 12-months, falling roughly 92 percent. The company has about $3 billion in debt, but generated about $540 million of operating cash flow in the trailing 12 month period.

Settling debt may take time, though. Although some analysts believe that the company will ultimately get teh waivers on loan covenants from its lenders, the process is slow-going, especially since DryShips has to negotiate with 20 to 25 banks, not just one or two, like many of the company’s competitors.

Jeffries analyst Doug Mavrinac said realistically banks are not going to want to foreclose on DryShips’ 40-lus vessels. The company, which has $1 billion of cash on hand, and should generate $1.7 billion in EBITDA over the next three years, should have it debt-free in that same time period.

Tags: ,
Posted in Industrial Stocks | No Comments »

Buzz Stock of the Day – China Sky One Medical (CSKI)

Thursday, April 16th, 2009

Business is booming for our buzz stock of the day, China Sky One Medical, Inc. (Nasdaq: CSKI).

The company, which manufactures over-the-counter drugs in China, reported record results for the fourth quarter and 12 months ended December 13, 2008.

Operating income for the year increased 91.6 percent to $35.7 million, and revenues increased 86.2 percent to $91.8 million.

The company started trading on the Nasdaq Global Market on September 16, 2008, and recently completed several key acquisitions, and recently received SFDA final approval for 19 drugs.

China Sky One expects full-year 2009 revenue to increase 40 percent to between $128 million and $130 million, and net profit margin to increase to $38 million to $39 million.

For the trailing 12 month period, China Sky One earned about $5.60 a share on revenue of $78.5 million. The company has about $51 million of cash, and generated $21 million of levered free cash flow.

We like CSKI because the company has continued to demonstrate growth in tough economic times, made some key acquisitions that could be accretive in the very near future, and has hefty 40.3 percent operating margins. The company also has a low P/E ration (8.58) compared to the industry average of 9.39.

“We are confident about the prospects for our business in 2009 and will continue to focus on increasing market share by both strengthening and further refining our successful sales and distribution network, building and enhancing our brand image, and making strategic acquisitions that continue to support our growth,” said Yan-Qing Liu, Chairman and CEO of China Sky One Medical, Inc.

Tags: , , ,
Posted in Health Care Stocks | No Comments »

Buzz Stock of the Day – Healthcare Services Group (HCSG)

Wednesday, April 15th, 2009


Healthcare facilities management companies were up today, led by our Buzz Stock of the Day — Healthcare Services Group, Inc. (Nasdaq: HCSG).

The Bensalem, Pa.-based company, which provides maintenance, food services and housekeeping to hospitals, retirement homes and rehabilitation centers reported first quarter profit of $7.7 million, or $0.18 per-share, a 13 percent increase over the same period last year.

Analysts estimated EPS of $0.17 per share for the quarter.

Revenue for the quarter increased 9 percent to $160.45 million, from $147.2 million a year earlier. The company also declared a first quarter cash dividend of $0.18 per common share, payable on May 15, 2009 to shareholders on record at the close of business on April 24, 2009. This marks a 6 percent increase over the dividend declared for the 2009 first quarter and a 29 percent increase over the 2008 same period payment. It is the 24th consecutive regular quarterly cash dividend payment, as well as the 23rd consecutive increase since the company initiated a regular quarterly cash dividend payments in 2003.

HCSG has quarterly revenue growth (yoy) of 5.2 percent, and has generated EBITDA of $44.7 million, on revenue (ttm) of $602.7 million. The company has an operating margin of nearly 7 percent, and has plenty of cash on hand. We like HCSG because it generates healthy operating cash flow and levered free cash flow, and has consistently raised its quarterly dividend.
The company also doesn’t take any reimbursement revenue, and all of its fees are paid in cash by customers. That protects Healthcare Services Group, Inc. from cuts or other changes in reimbursement rates, and despite the economic downturn, nursing homes need the company’s services, and are unlikely to cut them due to budget constraints.

The company also just announced an asset purchase agreement with Contract Environmental Services, Inc., a provider of professional housekeeping, laundry and food services to long-term care and related facilities. The transaction is expected to close around May 1st, and add more than $40 million to HCSG’s annual revenue, “as well as being accretive to future earnings per share,” according to the company’s first quarter earnings release.

As of December 31, 2008, Healthcare Services Group, Inc. provided services to approximately 2,100 facilities in 47 states.

Tags: ,
Posted in Health Care Stocks | No Comments »

Buzz Stock of the Day – Antigenics (AGEN)

Tuesday, April 14th, 2009

Last month, cancer vaccine developer, Antigenics, Inc. (Nasdaq: AGEN) announced that its personalized cancer treatment, Oncophage(R) was granted a positive recommendation by the Committee for Orphan Medical Products (COMP) of the Europen Medicines Agency (EMEA) for orphan drug designation for the treatment of giloma, a life-threatening cancer that starts in the brain or spine.

Results from a Phase 1, 12 patient investigator-sponsored study, showed that the overall median survival was approximately ten and a half months, with four patients surviving beyond 12 months and one patient surviving almost two and a half years.

This compares with survival based on historical experiences in a similar patient population, which is in the range of six and a half months. The company is currently enrolling patients for the Phase 2 portion of the study, which is ongoing and has enrolled about two-third of its target patients, according to Antigenics’ chairman and CEO, Garo Armen, PhD.

Oncophage is already approved as an adjuvant treatment for early stage kidney cancer in Russia, where the company is still seeking commercial partners and government reimbursement. Russia has only recently launched proprietary products from western companies, and there are additional uncertainties including the company securing the necessary partnerships and government funds to successfully launch the product.

Antigenics’ bread and butter is its licensing revenue from QS-21, an adjuvant that’s used in various vaccines. Antigenics’ licensees include GlaxoSmithKline and Elan. There are currently 16 vaccines that cover a number of indications including non-smal cell lung cancer, malaria, HIV, melanoma, and influenza that use QS-21. GSK’s malaria vaccine, which uses the adjuvant, should enter a phase 3 study across Africa in the “very near term,” according to Armen.

Tags: , ,
Posted in Health Care Stocks | No Comments »

Buzz Stock of the Day- Misonix (MSON)

Monday, April 13th, 2009


There were more than 28,000 prostate cancer-related deaths in 2008.

Many of the current treatments including radiation and hormone therapies either result in a recurrence of the cancer, or have harsh side effects such as osteoporosis and anemia.

Minimally invasive treatments in late clinical trials are showing promise, however.

Our Buzz Stock of the Day — Misonix, Inc. (Nasdaq: MSON) — is developing a prostate cancer therapy based on High Intensity Focused Ultrasound (HIFU) technology. The company’s HIFU-based therapy is in Phase III clinical trials at a number of academic centers throughout the U.S.

In 1999, Misonix obtained a 20 percent equity position in Focus Surgery, a company leading the way in High Intensity Focused Ultrasound (HIFU) technology. Misonix manufactures the product for Focus Surgery. Misonix also markets the SB500 in the United Kingdom, Europe and Russia.

Treatment time using HIFU is usually 3-4 hours, and patients will more than likely be discharged the same day, or next day at the doctors discretion, according to Misonix’s Web site.

We like Misonix because the company makes money from its portfolio of ultrasonic medical devices that are being used in cosmetic surgery, neurosurgery, and laparoscopic surgery; is aggressively expanding its geographic footprint, and has a very promising pipeline.

For the three months ended December 31, Misonix reported net income of $194,000, or $0.03 per-share, compared with a net loss of $117,000 or $0.02 per-share. Revenue for the company’s second fiscal quarter increased 5.1 percent over the same period last year, largely due to sales growth for the company’s medical device products.

“Our medical device business made solid progress as we expanded our sales opportunities both domestically and internationally,” said Misonix CEO, Michael McManus in an earnings release.

The company has made continued strides to expand it sales and distribution network recently, and announced several agreements to enter new markets including Eastern Europe, Belgium and Luxenbourg, and Israel.

Misonix also recently strengthened its balance sheet by selling its Ultrasonic Laboratory non-core business for $3.5 million.

Tags: , , ,
Posted in Health Care Stocks | No Comments »

« Older Entries
Newer Entries »