Archive for May, 2009

Buzz Stock of the Day – Oculus Innovative Sciences (OCLS)

Wednesday, May 27th, 2009

Shares of Oculus Innovative Sciences, Inc. (Nasdaq: OCLS) were up more than 135 percent at mid-day on the Nasdaq.

The Petaluma-based company said U.S. health regulators approved its Microcyn skin and wound gel as both a prescription and over-the-counter formulation, sending shares up 70 percent before the bell.

The gel is intended to treat wounds such as leg ulcers, pressure ulcers, diabetic ulcers and mechanically or surgically debrided wounds.

“We understand the critical role that reimbursement plays in the successful commercialization of a medical product, and in that this is our first reimbursable product, we plan to aggressively market to the U.S. healthcare community,” said Oculus’ founder and CEO Hoji Alimi. “At the same time, we are taking all steps necessary to secure regulatory approvals outside North America so as to begin generating international sales through our existing distribution channels worldwide.”

Oculus, in partnership with its North American contract sales organization, Advocos, will market and sell the Microcyn® Skin and Wound Gel to the North American medical community as well as consumers beginning in June 2009.

Earlier this month, Oculus announced that its manufacturing facility in Mexico was working around the clock to meet the sudden product demand for Microdacyn™, a broad-spectrum antiseptic and sterilant approved by the Mexican Ministry of Health. Microdacyn has not been reviewed for similar indications by U.S. or European regulatory authorities nor has any regulatory body approved this technology for a specific swine flu indication. The Microcyn Technology is manufactured and marketed as Microdacyn™ in Mexico and is available through physicians and pharmacies as a non-toxic topical antimicrobial (antiseptic).

Regardless of the type of virus, it’s believed that Microdacyn’s mechanism of virus inactivation involves destruction of the proteins on the viral surface responsible for initial infection. Following destruction of these proteins, the viruses are no longer capable of causing any harm, according to a recent news release. Microdacyn has not been reviewed for similar indications by U.S. or European regulatory authorities nor has any regulatory body approved this technology for a specific swine flu indication.

Shares of Oculus were trading at $2.05 before the bell. They closed at $1.20 Tuesday on Nasdaq.

Buzz Stock of the Day – InfoSonics (IFON)

Friday, May 15th, 2009

Shares of our Buzz Stock of the Day – InfoSonics Corp. (Nasdaq: IFON) — were up as much as 95 percent today on heavy volume after the wireless handset provider announced strong first quarter earnings.

The company, which serves the Latin American wireless handset and accessories market, announced first quarter earnings of $247,000 or $0.02 per share, compared to a net loss of $413,000 or $0.03 per share in the same quarter of last year. Revenues for the quarter declined to $42.6 million, compared to $67.9 million in the first quarter of 2008. However, net sales increased sequentially by $9.2 million.

Operating expenses decreased were $2.9 million, a decrease of 22% when compared to operating expenses of $3.7 million in the first quarter of 2008, and a decrease of 23% when compared to operating expenses of $3.8 million in the fourth quarter of 2008.

“While we are very encouraged by the improvement in our results over last quarter, we continue to focus on increasing our revenues and gross margins,” said InfoSonics’ president and CEO, Joseph Ram. “In addition we took steps during the quarter to realign our cost structure with our current revenue level. We remain focused on profitability and are working with our vendors; both OEM and proprietary, to better manage our inventory levels and overall expenses.”

We like IFON because the company has a strong balance sheet, generates cash from operations, and is taking the right steps to maintain profitability. The sizable decrease in operating expenses coupled with the company’s ability to generate profit despite a drop in sales makes us bullish on InfoSonics’ future. Last year, the company generated approximately $17 million of operating cash flow on revenue of $213 million. InfoSonics has about $24 million of cash in the bank, and is trading at a lower multiple than many of its competitors.

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Buzz Stock of the Day – D&E Communications (DECC)

Monday, May 11th, 2009

Shares of our Buzz Stock of the Day — D&E Communications (Nasdaq: DECC) — were up more than 52 percent in mid-day trading on the Nasdaq today after news broke that the company would be acquired by U.S. local telephone company Windstream Corp. (NYSE: WIN) for about $330 million.

As part of the deal, D&E shareholders will receive 0.650 shares of Windstream stock and $5 in cash for each share held, Windstream said in a statement.

Based on Windstream stock’s Friday closing price, the deal values D&E Communications at $10.88 per share, a premium of about 61 percent to its Friday closing of $6.75, D&E Communications said in a separate statement.

Pennsylvania-based D&E Communications provides services including high-speed Internet, local and long distance telephone, video and professional IT services.

The acquisiton is expected to close in the second half of 2009 and add free cash flow in the first full year and reduce dividend payout ratio, according to Windstream.

“This merger combines best-in-class products and services of two great integrated communications providers,” said D&E’s president and CEO, James Morozzi The result ensures a strong and vibrant company that is well-positioned to serve our customers, shareholders and employees today as well as in the future.”

According to Windstream president and CEO, Jeff Gardner, the D&E’s reach will help Windstream “significantly expand” its operations in Pennsylvania and “provide the opportunity to grow cash flow, reduce our dividend payout ratio and create value for shareholders and customers.”

Shares of Windstream were down 2.6 percent at mid-day trading on the New York Stock Exchange.

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Buzz Stock of the Day – Vanda Pharmaceuticals (VNDA)

Thursday, May 7th, 2009

Shares of our Buzz Stock of the Day — Vanda Pharmaceuticals, Inc. (Nasdaq: VNDA) — were up as much as 800 percent today on news that the drug maker’s atypical antipsychotic drug, Fanapt was approved by the Food and Drug Administration.

The FDA rejected the drug in July 2008. The letter issued by the FDA at that time raised concerns about the efficacy of Fanapt and urged Vanda to conduct a new clinical trial and collect additional safety data.

Vanda instead chose to resubmit the drug to the FDA last November with additional data from its existing clinical trials. Most investors considered this strategy a long shot. Many analysts either dropped coverage of VNDA or downgraded the stock, and shares of VNDA dropped well below $1, which valued the company at less than its cash on hand.

The FDA’s approval of the drug was based on two studies in which Fanapt performed better than placebo, but the drug doesn’t stack up as well against existing schizophrenia treatments, including Johnson & Johnson’s Risperdal and Pfizer’s Geodon, according to a recent article.

Also benefitting from today’s news was Titan Pharmaceuticals (Pink Sheets: TTNP), which is entitled to receive royalties on global net sales of Fanapt equal to 8% on annual net sales up to $200 million, and 10 percent on annual net sales above $200 million. Shares of TTNP were up as much as 1400 percent at mid-day trading today.

Global sales from the class of atypical antipsychotics exceeded U.S. $20 billion in 2007.

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Buzz Stock of the Day – True Religion Apparel (TRLG)

Wednesday, May 6th, 2009

Earlier this week, premium jeans brand (and our Buzz Stock of the Day), True Religion Apparel, Inc. (Nasdaq: TRLG), announced a 10 percent jump in its first quarter profit and a 19 percent jump in sales, over the same period last year.

The company also increased its cash balance to $76.5 million and carried no debt ahead, and expanded its gross margin by 380 basis points to 60.9 percent, from 57.1 percent last year. Operating income for the quarter increased 15 percent to $13.1 million, from $11.4 million a year ago, and net profit per share increased to $0.32, from $0.29 a year ago. Earnings were buoyed by a 26 percent increase in international sales and a 96 percent increase in branded retail stores an through e-commerce, offset by an 11 percent decline in sales for the company’s U.S. wholesale segment.

True Religion also expanded its consumer direct segment, growing its total store count to 49 as of March 31st, and 51 stores as of today. According to True Religion Apparel chairman CEO, Jeff Lubel, the “expansion of our consumer direct segment is a key component of our growth strategy.”

CFO, Pete Collins reiterated the company’s guidance of net sales between $290 million and $297 million in 2009.

Shares of TRLG were up as much as 24 percent today, largely because of results from a private survey showing the smallest decline in private-sector employment in six months.

Other retailers that were up in mid-day trading included Abercrombie & Fitch Co. (NYSE: ANF) and Sears Holding Corp. (Nasdaq: SHLD).

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