Look out Roche Holding Ltd. (OTCMKTS:RHHBY). And Gilead Sciences, Inc. (NASDAQ:GILD)? You might want to look over your shoulder too. There's a new contender on the immunotherapy front, and its name is TNI Biotech Inc. (OTCMKTS:TNIB). No, it isn't a household name... at least not yet. But, TNIB could become a household name in the foreseeable future, by chipping away at the dominance currently enjoyed by the likes of GILD and RHHBY.
The idea of immunotherapy isn't exactly a new one. Indeed, at its basic form, penicillin and even more modern antibiotics are immunotherapies, designed to induce a body's natural disease-fighting response in order to more effectively fight an infection. However, immunology has advanced tremendously in recent years - admittedly led by the likes of Roche Holding and Gilead Sciences - and is now taking aim (effectively, to boot) at the biggies like cancer, autoimmune diseases, and HIV/AIDS.
The foundation for that proverbial quantum leap is a better understanding of how the human body's immune system works. Gone are the days where a high disease-fighting white blood cell count was the end-goal. Now we know the immune system is an incredibly complex science, with a lot of moving parts, and working interdependently with the body in a lot of different ways. That complexity, however, is also what's allowed a smaller player like TNI Biotech to begin building what could be a real threat to industry giants Gilead and Roche Holding. One small tweak in one of the immune system's many parts, and its ability to fight an illness could be turned on in a way it's never been turned on before.
TNI Biotech's key to building this better mousetrap are LDN (Low Dose Naltrexone) and MENK (methionine-enkephalin). These two compounds can boost and even restore an immune system simply by increasing the T and NK cell count, which prompts a person's own natural defenses... the best way to fight any ailment, assuming that immune system is still functioning property. That, however, has been the impasse with many medicines - all too often that patient's immune systems has already been damaged by the very disease it's trying to fight (which is the case with Human Immunodeficiency Virus, or HIV), or the diseased cells can effectively "hide" from that person's immune system, failing to trigger an immune response at all (which is the case with many cancers and tumors). The research from TNIB to date shows that a slight tweak in MENK and LDN could induce a major, positive response to illnesses. [See the company's explanation for more details.]
What's so compelling about the biotechnology isn't the premise, however - there are lots of immunotherapy companies out there. What's so impressive is how universal and adaptable the MENK and LDN-based approaches are.
This idea could be just as effective as a treatment for AIDS as it could be as treatment for cancer. In fact, the company believes this treatment approach could even help fight autoimmune diseases such as Crohn's or multiple sclerosis; LDN and MENK are very foundational parts of an entire immune system. That's why it wasn't hyperbole to say Roche Holding Ltd. and Gilead Sciences, Inc. may want to take notice. Roche is the world's biggest supplier of cancer drugs, while Gilead is the dominant name in HIV/AIDS therapies. Both companies deserve their current spots in the revenue hierarchy, but if a better medicine comes along....
It will still be years before TNI Biotech Inc. gets anything on the market; that's just the nature of biotech, or more specifically, the nature of the FDA's approval process. That does not mean TNIB isn't investment-worthy right now, though. The market prices in a drug's potential from the get-go, and the market also rewards a stock when its underlying company reaches key milestones. That's why investors looking for a ground floor opportunity - or perhaps looking for the next GILD or RHHBY - may want to consider TNIB now. This one small twist on how to induce an immune response could end up being a game-changer.
For more information on TNI Biotech, visit the SCN research page here.
Building a Better Immunotherapy Mousetrap (GILD, TNIB, RHHBY)
Top Value Stocks To Invest In 2014
The stock market has a tendency to intimidate would-be investors. However, we at The Motley Fool believe that with a little patience and the right stocks,�almost anyone can succeed in the stock market. The trick is finding the best stocks for your investing style, and letting the value of those investments appreciate over time.
Consumer goods stocks offer a great starting point for beginners because of their easy-to-understand business models. I've included two food stocks below, each with an attractive risk-reward balance for the novice investor.
Getting started
Before we dive into specific stocks, new investors with less starting capital should first take advantage of online discount brokerage companies, such as TD AMERITRADE. In addition to affordable online stock trading, AMERITRADE also offers free in-depth courses and educational resources for beginning to intermediate-level investors.
Of course, AMERITRADE is one of many brokerage companies available to you. Fortunately, the Fool's brokerage comparison tool can help you find the best fit for your investing needs. Now let's look at some stock selections that are well suited to stock-market newbies.
Top Value Stocks To Invest In 2014: Schlumberger N.V.(SLB)
Schlumberger Limited, together with its subsidiaries, supplies technology, integrated project management, and information solutions to the oil and gas exploration and production industries worldwide. The company?s Oilfield Services segment provides exploration and production services; wireline technology that offers open-hole and cased-hole services; supplies engineering support, directional-drilling, measurement-while-drilling, and logging-while-drilling services; and testing services. This segment also offers well services; supplies well completion services and equipment; artificial lift; data and consulting services; geo services; and information solutions, such as consulting, software, information management system, and IT infrastructure services that support oil and gas industry. Its WesternGeco segment provides reservoir imaging, monitoring, and development services; and operates data processing centers and multiclient seismic library. This segment also offers variou s services include 3D and time-lapse (4D) seismic surveys to multi-component surveys for delineating prospects and reservoir management. The company?s M-I SWACO segment supplies drilling fluid systems to improve drilling performance; fluid systems and specialty tools to optimize wellbore productivity; production technology solutions to maximize production rates; and environmental solutions that manages waste volumes generated in drilling and production operations. Its Smith Oilfield segment designs, manufactures, and markets drill bits and borehole enlargement tools; and supplies drilling tools and services, tubular, completion services, and other related downhole solutions. The company?s Distribution segment markets pipes, valves, and fittings, as well as mill, safety, and other maintenance products. This segment also provides warehouse management, vendor integration, and inventory management services. Schlumberger Limited was founded in 1927 and is based in Houston, Texas.
Advisors' Opinion:- [By Matt DiLallo]
Investors may wonder if peers like�Halliburton� (NYSE: HAL ) �and�Schlumberger� (NYSE: SLB ) �were pressured this quarter as well. Both companies have waded through the sluggish North American market by relying on growth overseas. If that trend continues, it should continue to mute some of the weakness Nabors experienced.
- [By Seth Jayson]
Schlumberger (NYSE: SLB ) reported earnings on July 19. Here are the numbers you need to know.
The 10-second takeaway
For the quarter ended June 30 (Q2), Schlumberger met expectations on revenues and beat expectations on earnings per share. - [By Dr. Kent Moors]
That's why some of the biggest OFS providers - like Schlumberger (NYSE: SLB), Halliburton (NYSE: HAL) and Weatherford International (NYSE: WFT) - have been buying up oil and gas equipment companies.
Top Value Stocks To Invest In 2014: Dollar Tree Inc.(DLTR)
Dollar Tree, Inc. operates discount variety stores in the United States and Canada. Its stores offer merchandise primarily at the fixed price of $1.00. The company operates its stores under the names of Dollar Tree, Deal$, Dollar Tree Deal$, Dollar Giant, and Dollar Bills. Its stores offer consumable merchandise, including candy and food, and health and beauty care, as well as household consumables, such as paper, plastics, household chemicals, in select stores, and frozen and refrigerated food; variety merchandise, which includes toys, durable housewares, gifts, party goods, greeting cards, softlines, and other items; and seasonal goods, such as Easter, Halloween, and Christmas merchandise. As of April 30, 2011, it operated 4,089 stores in 48 states and the District of Columbia, as well as 88 stores in Canada. The company was founded in 1986 and is based in Chesapeake, Virginia.
Advisors' Opinion:- [By Paul Ausick]
Dollar General�� share price is up less than 6% in the past 12 months, but since the beginning of the year shares have risen more than 22%. And even then, Dollar General�trails Dollar Tree Inc. (NASDAQ: DLTR) in share price growth since January 1. Dollar Tree stock is up 30%.
- [By Jon C. Ogg]
Dollar Tree Inc. (NASDAQ: DLTR) was maintained as a Buy but was removed from the prized Conviction Buy list at Goldman Sachs.
Duke Energy Corp. (NYSE: DUK) was raised to Buy from Hold with a $79 price target at Argus.
Best Insurance Stocks For 2014: Tupperware Corporation(TUP)
Tupperware Brands Corporation operates as a direct seller of various products across a range of brands and categories through an independent sales force. The company engages in the manufacture and sale of kitchen and home products, and beauty and personal care products. It offers preparation, storage, and serving solutions for the kitchen and home, as well as kitchen cookware and tools, children?s educational toys, microwave products, and gifts under the Tupperware brand name primarily in Europe, Africa, the Middle East, the Asia Pacific, and North America. The company provides beauty and personal care products, which include skin care products, cosmetics, bath and body care, toiletries, fragrances, nutritional products, apparel, and related products principally in Mexico, South Africa, the Philippines, Australia, and Uruguay. It offers beauty and personal care products under the Armand Dupree, Avroy Shlain, BeautiControl, Fuller, NaturCare, Nutrimetics, Nuvo, and Swissgar de brand names. The company sells its Tupperware products directly to distributors, directors, managers, and dealers; and beauty products primarily through consultants and directors. As of December 26, 2009, the Tupperware distribution system had approximately 1,800 distributors, 61,300 managers, and 1.3 million dealers; and the sales force representing the Beauty businesses approximately 1.1 million. The company was formerly known as Tupperware Corporation and changed its name to Tupperware Brands Corporation in December 2005. The company was founded in 1996 and is headquartered in Orlando, Florida.
Advisors' Opinion:- [By Oliver Pursche]
European large-cap pharmaceuticals like Novartis (NVS) �and Bristol Meyers Squibb (BMY) �count amongst some of our favorite stocks right now, as do U.S. multinationals that are growing revenue and margins in Asia ��Tupperware (TUP) �is a shining example. Stay away from utilities and energy stocks, as they are likely to be the laggards over the next year.
- [By Brian Pacampara]
Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, household products company Tupperware Brands (NYSE: TUP ) has earned a coveted five-star ranking.
- [By John Udovich]
Everyone is familiar with�the Tupperware brand from�consumer products stock Tupperware Brands Corporation (NYSE: TUP) and you are probably familiar with the brands�of mid cap stock Jarden Corp (NYSE: JAH) along with small cap stocks Libbey Inc (NYSEMKT: LBY) and Lifetime Brands Inc (NASDAQ: LCUT); but what about the stocks themselves? Chances are, their brands or products are right under your nose at home and you probably don�� know anything about the mid cap or small cap stock behind them.
Top Value Stocks To Invest In 2014: Caterpillar Inc.(CAT)
Caterpillar Inc. manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives worldwide. It operates through three lines of businesses: Machinery, Engines, and Financial Products. The Machinery business offers construction, mining, and forestry machinery, including track and wheel tractors, track and wheel loaders, pipelayers, motor graders, wheel tractor-scrapers, track and wheel excavators, backhoe loaders, log skidders, log loaders, off-highway trucks, articulated trucks, paving products, skid steer loaders, underground mining equipment, tunnel boring equipment, and related parts. It also manufactures diesel-electric locomotives; and manufactures and services rail-related products and logistics services for other companies. The Engines business provides diesel, heavy fuel, and natural gas reciprocating engines for Caterpillar machinery, electric power generation systems, marine, petrol eum, construction, industrial, agricultural, and other applications. It offers industrial turbines and turbine-related services for oil and gas, and power generation applications. This business also remanufactures Caterpillar engines, machines, and engine components; and offers remanufacturing services for other companies. The Financial Products business provides retail and wholesale financing alternatives for Caterpillar machinery and engines, solar gas turbines, and other equipment and marine vessels, as well as offers loans and various forms of insurance to customers and dealers. It also offers financing for vehicles, power generation facilities, and marine vessels. The company markets its products directly, as well as through its distribution centers, dealers, and distributors. It was formerly known as Caterpillar Tractor Co. and changed its name to Caterpillar Inc. in 1986. Caterpillar Inc. was founded in 1925 and is headquartered in Peoria, Illinois.
Advisors' Opinion:- [By Matt Thalman]
This past week, eight of the Dow Jones Industrial Average's (DJINDICES: ^DJI ) 30 components reported earnings: McDonald's, DuPont (NYSE: DD ) , AT&T, Travelers (NYSE: TRV ) , United Technologies, Caterpillar (NYSE: CAT ) , Boeing, and 3M (NYSE: MMM ) .
- [By Matt Thalman]
Caterpillar (NYSE: CAT ) rose 0.88% after the release of the strong homebuilder confidence and industrial production numbers, the latter of which takes into account not only output from U.S. factories but also from mines and utility companies. And since Caterpillar is a big player in the mining equipment field, investors surely saw this report as good news for the company.
- [By Travis Hoium]
Caterpillar (NYSE: CAT ) led the way with a 6.1% gain this week. There wasn't an abundance of news out about the company, but the stock will often jump when investors feel more confident about the economy. Caterpillar reports earnings July 24, and that's when we'll learn how bullish management is about the domestic and global economy.
- [By E. Michael Greenberg]
Blue Sphere has other major partners on these projects as well.� They have brought in a hedge fund that specializes in Cleantech investing as an equity partner.� This equity partner has committed to up to $7.5 million for the Charlotte project and $5 million for the smaller Johnson plant.� Caterpillar Financial Services, a division of Caterpillar Inc. (NYSE: CAT) is providing almost $18 million in debt for the construction of the Charlotte project.� Both groups are expected to fund upon their respective commitments to the Charlotte project by the end of August, which will allow Blue Sphere and Biogas Nord to begin construction of the facility in September of this year.� Blue Sphere�� management has stated that they expect the Charlotte project to be complete and producing with in 12 months of the beginning of construction.�
Top 5 Penny Stocks To Watch Right Now
AMZN Keeps Climbing — But Will Amazon Stock Fall Like AAPL?
Last week was absolutely brutal for the shareholders of the beleaguered retailer�JCPenny (JCP). The shares lost about 30% of their value and are currently going for under $9.
Top 5 Penny Stocks To Watch Right Now: First Security Group Inc.(FSGI)
First Security Group, Inc. operates as the holding company for FSGBank that provides banking and financial products and services to various communities in eastern and middle Tennessee and northern Georgia. The company offers various deposit services, such as checking, savings, and money market accounts, as well as certificates of deposit. It offers commercial loans, including loans to smaller business ventures, credit lines for working capital, short-term seasonal or inventory financing, and letters of credit; real estate?construction and development loans to residential and commercial contractors and developers; and consumer loans to individuals for personal, family, and household purposes, including secured and unsecured installment and term loans. The company also offers commercial mortgage loans to finance the purchase of real property; commercial leasing for new and used equipment, fixtures, and furnishings to owner-managed businesses; and leasing for forklifts, heavy equipment, and other machinery to owner-managed businesses primarily in the trucking and construction industries. It also provides trust and investment management, mortgage banking, financial planning, and electronic banking services, such as Internet banking, online bill payment, cash management, ACH originations, wire transfers, direct deposit, traveler?s checks, safe deposit boxes, United States savings bonds, and remote deposit capture, as well as equipment leasing. The company operates 38 full-service banking offices and 1 loan and lease production office. Its market areas include in Bradley, Hamilton, Jackson, Jefferson, Knox, Loudon, McMinn, Monroe, Putnam, and Union counties, Tennessee; and Catoosa and Whitfield counties, Georgia. First Security Group was founded in 1974 and is headquartered in Chattanooga, Tennessee.
Advisors' Opinion:- [By Roberto Pedone]
First Security Group (FSGI) operates as the holding company for FSGBank, which provides banking products and services to various communities in Tennessee and Georgia. This stock closed up 6.5% to $2.29 in Tuesday's trading session.
Tuesday's Range: $2.16-$2.30
52-Week Range: $1.30-$7.45
Tuesday's Volume: 80,000
Three-Month Average Volume: 509,606From a technical perspective, FSGI ripped higher here right above some near-term support levels at $2.14 to $2.12 with lighter-than-average volume. This move is quickly pushing shares of FSGI within range of triggering a major breakout trade. That trade will hit if FSGI manages to take out some near-term overhead resistance levels at $2.38 to $2.52 and then once it clears its 200-day moving average at $2.80 with high volume.
Traders should now look for long-biased trades in FSGI as long as it's trending above some key support levels at $2.14 to $2.12 and then once it sustains a move or close above those breakout levels with volume that hits near or above 509,606 shares. If that breakout triggers soon, then FSGI will set up to re-fill some of its previous gap down zone from June that started at $5.08.
Top 5 Penny Stocks To Watch Right Now: Luna Innovations Incorporated(LUNA)
Luna Innovations Incorporated engages in the research, development, and commercialization of technologies in the areas of sensing and instrumentation products, and health care products primarily in the United States. The company?s Product and Licensing segment offers test and measurement products to monitor the integrity of fiber optic network and sub-assemblies. This segment provides Optical Vector Analyzer platform, a device for single-measurement, all-parameter analysis of fiber optic components and assemblies up to 150 meters in length; Optical Backscatter Reflectometer, a sensitive diagnostic device, for data and telecommunications companies, and service providers who maintain their own fiber optic networks; and Phoenix laser, a MEMs-based external cavity laser, that offers low noise and precise tuning capability over the C-band. It also offers distributed sensing systems, which comprise multiple sensors whose input is integrated through a fiber optic network and soft ware to detect distributed strain, shape, and temperature; and tunable lasers. In addition, this segment provides health care products, including medical devices for minimally invasive diagnostics, surgery, and therapy; non-invasive monitoring and diagnosis medical devices consisting of emboli detection and classification QUANTIFIER, a non-invasive medical device, that uses quantitative ultrasound technology to count emboli in ex-vivo blood circuit; and nanomaterial-based medical products comprising Trimetasphere nanomaterials. The company?s Technology Development segment provides contract research services to universities, government entities, and corporations. Luna Innovations Incorporated offers its services to energy, telecommunications, life sciences, and defense industries .The company was incorporated in 1990 and is headquartered in Roanoke, Virginia.
Advisors' Opinion:- [By Rich Smith]
Shares of microcap fiber optic test and measurement sensor-maker Luna Innovations (NASDAQ: LUNA ) surged as much as 85% in Monday trading before finally settling down to book a 41% gain for the day. The catalyst: The company announced that it had extended its multiyear agreement to develop and supply "high-speed shape-sensing technology" to robotic surgery giant Intuitive Surgical (NASDAQ: ISRG ) for use in its da Vinci surgical robots.
10 Best Growth Stocks To Buy Right Now: United Bancshares Inc.(UBOH)
United Bancshares, Inc. operates as a bank holding company for The Union Bank Company that engages in the provision of commercial banking services to small and middle-market businesses and individuals. It accepts various deposit products, including checking accounts, savings and money market accounts, time certificates of deposit, time deposits, and demand deposits. The company also offers various loan products that consist of commercial, consumer, agricultural, residential mortgage, and home equity loans. In addition, it provides automatic teller machine services, safe deposit box rentals, and other personalized banking services. The company serves primarily in the Ohio counties of Allen, Hancock, Putnam, Sandusky, Van Wert, and Wood, as well as with office locations in Bowling Green, Columbus Grove, Delphos, Findlay, Gibsonburg, Kalida, Leipsic, Lima, Ottawa, and Pemberville, Ohio. United Bancshares, Inc. was founded in 1904 and is headquartered in Columbus Grove, Ohio.< /p>
Top 5 Penny Stocks To Watch Right Now: Capital Product Partners L.P.(CPLP)
Capital Product Partners L.P., a shipping company, provides seaborne transportation of refined oil products and chemicals. It provides marine transportation services under medium- to long-term time charters or bareboat charters. As of July 13, 2011, the company?s fleet consisted of 22 double-hull tankers, including 18 medium range (MR) tankers, 2 small product tankers, 1 Suezmax crude oil tanker, and 1 Capesize bulk carrier. Its tankers are capable of carrying crude and refined oil products, such as gasoline, diesel, fuel oil, and jet fuel, as well as edible oils and chemicals, including ethanol. Capital GP L.L.C. operates as a general partner of the company. Capital Product Partners L.P. was founded in 2007 and is headquartered in Piraeus, Greece.
Top 5 Penny Stocks To Watch Right Now: Security National Financial Corporation(SNFCA)
Security National Financial Corporation, together wit its subsidiaries, provides various insurance and annuity products in the United States. It operates in three segments: Life Insurance, Cemetery and Mortuary, and Mortgage Loans. The Life Insurance segment engages in selling and servicing certain lines of life insurance, annuity products, and accident and health insurance products. This segment also involves in funeral plans and interest-sensitive life insurance, as well as other traditional life and accident, and health insurance products. It sells its products through direct agents, brokers, and independent licensed agents. The Cemetery and Mortuary segment offers various products that include grave spaces, interment vaults, mausoleum crypts and niches, markers, caskets, flowers, and other related products. This segment also provides services, such as professional services of funeral directors, opening and closing of graves, use of chapels and viewing rooms, and use of automobiles and clothing. It sells its products and services through sales representatives. As of December 31, 2009, the segment owned 6 cemeteries and 10 mortuaries. The Mortgage Loans segment originates and underwrites residential and commercial loans for new construction, existing homes, and real estate projects primarily in Arizona, California, Florida, Hawaii, Indiana, Kansas, Oklahoma, Oregon, Texas, Utah, and Washington. The company was founded in 1965 and is headquartered in Salt Lake City, Utah.
Don't Fret Over Outliving Your Money
Will you have saved enough by the time you retire, or will you run out of money, or not even have enough to retire in the first place? MoneyShow's Howard R. Gold urges you to not worry as much about that and focus on certain kinds of annuities instead.
You've probably seen the ad: Harvard happiness expert Dan Gilbert asks people who's the oldest person they've known. He gives them all blue stickers, which they slap on a wall with an age timeline that skews heavily to the 90s and beyond.
"A lot of us have known someone who's lived well into their 90s, and that's a great thing," said Gilbert.
"The question is, how do you make sure you have the money you need to enjoy all of these years?"That 30-second commercial, which ran during the last Super Bowl, was for Prudential.
But it could have been posted by any financial services company that routinely warns its customers about outliving their money. Their main message: Unless you save a lot more and invest it with us, you'll be living in the street and eating cat food when you're 95.
That focus on, even obsession with, people outliving their money has led to some bad outcomes. To ensure that their money will grow over a long lifetime, financial advisers recommended clients keep 60% or more of their assets in stocks even as they neared retirement—just in time for the 2008-2009 market crash.
Read Howard's piece, What Should I Do with My Money Now? on MoneyShow.com.That's when investors learned the hard way there are more risks than just living too long. There's market risk, inflation risk, and the risk of serious illness that could empty your nest eggs. And then there's the biggest risk—not saving enough money to retire at all.
This year, a poll by HSBC revealed that nearly one in five Americans don't expect to retire, and that 56% think they're not doing enough—or are doing nothing at all—to prepare for it. Teresa Ghilarducci of the New School for Social Research reported that 75% of Americans nearing retirement age have less than $30,000 in retirement savings. Longevity risk is the least of their worries.
And yet financial services firms routinely overstate it. "These ads and the insurance companies are taking this way too far," says Moshe Milevsky, a professor at York University in Toronto, who has been studying retirement issues for 20 years.
True, life expectancy is increasing—American men who turn 65 now will live 18 more years, on average, while women of the same age will live an average two more decades. And the number of people over 90 has tripled since 1980 to 1.9 million in 2010. By 2050, some eight million are projected to join the nonagenarians' club.
But that would still be only 10% of Americans 65 and over, compared with around 4.7% now, according to the Centers for Disease Control. And among that group, women outnumber men three to one.
NEXT: Too many eggs in the longevity basket
Page 1 | Page 2 | Next PageA Romantic '70s Icon Exits the Solar System With a Song
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No, it didn't happen on Wall Street. It didn't even happen on this planet.
Some months ago, a spaceship launched from Earth in 1977 and still transmitting data, carrying a message about its origins to any intelligent life that it may encounter, sent back proof that it had quietly passed out of the solar system.
This past week, scientists published that decoded data and the results seem conclusive. The spacecraft, Voyager 1, became the first manmade device to leave our solar system around Aug. 25, 2012. 
Its data functions get by on only 68 kilobytes of memory, state of the art in 1977. By comparison, the cheaper Apple iPhone comes with 16 gigabytes of memory (a gigabyte is 1 million kilobytes), roughly 240,000 times more powerful.
In 1977, when Voyager was launched, scientists didn't even know how big the solar system was. They suspected the border, the place where the solar magnetic field ends, to lie a few hundred million miles out. As the craft traveled, they reevaluated their theories and began to suspect the border was much, much farther -- between 10 billion and 16 billion miles.
Over the past year, scientists have collected several pieces of evidence to indicate Voyager's passage out of the solar system. But for final proof, they needed to know that the density of plasma surrounding the spacecraft had increased. The instrument that measures plasma density directly failed long ago, so scientists had to wait for the opportunity to measure it another way. That came in April, when bursts of radio waves rattled the plasma, an oscillation picked up by the spacecraft's antenna. The frequency of that vibration indicated a higher-density plasma -- the evidence scientists needed.
At NASA's press conference, the scientists played the realization of Voyager's data as a set of recorded sounds, noisy tones that rise noticeably as the craft enters interstellar space. At some 12 billion miles from Earth, Voyager 1 has yet to reach the Oort Cloud -- a collection of debris at our solar system's doorstep. By some definitions, the Oort Cloud marks the end of the solar system, so some debate about whether Voyager is or is not outside still exists. But undeniably, it has crossed a boundary, reaching a new milestone in space exploration. By 2025, its power source is expected to be completely exhausted. It will live out its remaining transmitting years sending lonely signals in an unending trek across interstellar space. Once dead, it will likely reach proximity of a distant star in about 40,000 years, after which it will continue to orbit the center of the galaxy. The Musical Alien Partly as a public relations measure, NASA included aboard the Voyager 1 probe a gold-plated record encoded with information for any intelligent aliens who may discover it -- a message in a bottle on the interstellar ocean. The gold-plated disc has printed on it a simple map indicating our position in the universe using 14 known pulsars of varying frequencies as landmarks and diagramed instructions for how to play back the information inscribed in the record, which included a combination of photos, sounds, human greetings in various languages and samples of music.
This being the U.S. of 1970s, the 27 music samples on the record are decidedly biased in favor Western classical music of the 18th to early 19th century. That's the stuff we used to impress people in those days: orchestras, choirs, opera singers, elaborate polyphony and highly structured forms.
Seven classical music excerpts are included and of those, only Igor Stravinsky's Rite of Spring lies outside of 100-year period defined by the careers of J.S. Bach and Ludwig van Beethoven. Two Bach recordings, two Beethoven recordings and one Mozart aria are all included.
Jazz is underrepresented, with only one recording included, Melancholy Blues by Louis Armstrong and his Hot Seven. Only one rock 'n' roll recording is listed as well, Johnny B. Goode by Chuck Berry. While those are all culturally important, one might wonder how they represent us as a species.
On the other hand, the inclusion of one blues recording, Dark Is the Night, by Blind Willie Johnson, seems a stroke of genius. As I've said elsewhere, this little miracle of a wordless song probably represents the human race as well or better than everything else on this disc. One example of Indian classical music, the raga, Jaat Kahan Ho, sung by Surshri Kesar Bai Kerkar; one example of Javanese court gamelan; one example of Japanese shakuhachi flute. Those three, and all the rest of the recordings here, would fall under what we today in the U.S. would term "World Music," meaning the folk traditions and classical traditions of the non-Western or Native American cultures. What all that indicates is that we are still growing in our understanding of one another. Someday relatively soon, I suppose, the term World Music will seem terribly quaint, uninformed, non-P.C., because it fails to differentiate between these widely disparate styles. It fails to see the nuance, the individuality, personality and wonder in each culture. Even here, in a gold-plated record intended to bring our species together, to show it in its best light, there are elements of nationalism and tribalism, hints of "us" and "them." Looking at that "pale blue dot," considering Sagan's words and the vastness of the distances that Voyager 1 has traveled, it is harder to see a "them" here on Earth. Will any species like ourselves ever find Voyager 1 floating between the stars and play back the encoded information? Not likely. A famous Star Trek film imagined a future human space mission encountering an evolved Voyager spacecraft (calling itself "V'Ger"), sentient and longing for its creator. That film may be closer to the point than its writers knew. At this moment, we are the alien to our 1977 selves, encountering this vessel as an old-Earth time capsule. Maybe through this milestone, the rugged, enduring human achievement symbolized by this little antiquated spacecraft, bridging the gap of space and time, we are gaining a surprisingly clearer view of ourselves and a glimpse of our true potential. -- Written by Carlton Wilkinson in Asbury Park Follow @CarltonTSC
Top Cheap Companies To Own In Right Now
5. Losing Larry
Larry Summers withdrawal from consideration as the next Fed chairman creates only one big winner in our admittedly dumb point of view and obviously it's one of the Winklevoss twins.
Exactly which of the pair we aren't sure. Take your Winkle pick. But one of those Facebook (FB)-failures is the victor here. Everybody else, from President Obama to John and Jane Q. Public, loses.
Allow us to explain. The stock market immediately cheered Summers' exit from the race, rising half a percent Monday. As TheStreet's very own Herb Greenberg points out in his column titled Summers and Heroin, however, as much as the stock market reflects the so-called pulse of America, the country's bloodlines are tainted by heavy doses of Fed-dealt junk in the form of cheap cash. Since Summers was more of a threat than his rival Janet Yellen to cut off, or at least reduce, the supply of easy money into the system, his departure as the president's next pusher-in-chief garnered the expected relief high. And as Herb astutely concludes, giving the addicts on Wall Street exactly what they want is not always a good thing. We learned as much the hard way when Lehman fell five years ago this very week. "Low rates are wonderful for almost everybody but savers and retirees. They spur housing sales. They keep stock prices elevated. And, well, they make us feel good. Oh, and they also give an illusion that things are better than they really are," writes Herb (no relation) Greenberg. In other words, ordinary Americans -- the plain old folks at home who save and retire -- lose by losing Larry Summers, and it's more than an economic matter. It's a hematologic one. Of course, President Obama is clearly a major loser in the bloodsport that is politics as a result of Larry's concession letter. TheStreet's Jim Cramer says as much in his column thanking Summers for removing his hat from the ring to avoid a bloody battle on Capitol Hill. "This candidacy -- which required Summers to bow out in order to save the president some political capital and avoid gut-wrenching hearings -- was so ill-thought-out by the president that one can only wonder how horrendous the battle will be with the Republicans in a few weeks," opined Cramer, adding that Obama must have been blind to the fact that Sen. Elizabeth Warren (D., Mass.) was gearing up to slam Summers on behalf of women everywhere, even those without Harvard degrees. On that note, lest one think that American women emerge triumphant as a result of Summers ceding the Fed's top spot to a fellow female, well, we suggest revisiting that notion as well. Even if Yellen does assume the position of America's top banker, she will always be remembered as Obama's number two choice. In the eyes of far too many, including the commander-in-chief, she will have won by default and as any competitor knows, that is often a fate worse than losing. Suffice to say it will make for some seriously awkward photo ops with Obama if and when Yellen does become the country's first Fed Chairwoman. Summers quite clearly is a loser by definition. That said, he can be solaced by the fact that the President of the United States is on his side even while everybody else in the country hates his goddamn guts, especially the fairer sex. Which brings us back to those Winklevosses. Or Winklevi. Or whatever those two kids call themselves when they are not daytrading bitcoins. For those that may have forgotten, the Winklevoss brothers were smacked down by Summers when he was President of Harvard and they were lowly students seeking redress for Mark Zuckerberg's alleged crime of stealing their multi-billion dollar idea. The scene was famously reprised in the blockbuster movie "The Social Network" and brought up again in a subsequent interview where Summers categorized any student who pulls such a stunt as an "asshole." He may be the only one, yet somewhere a Winkle asshole is smiling triumphantly right now.
Top Cheap Companies To Own In Right Now: Freeport-McMoran Copper & Gold Inc.(FCX)
Freeport-McMoRan Copper & Gold Inc. engages in the exploration, mining, and production of mineral resources. The company primarily explores for copper, gold, molybdenum, silver, and cobalt. It holds interests in various properties, located in North and South America; the Grasberg minerals district in Indonesia; and the Tenke Fungurume minerals district in the Democratic Republic of Congo. As of December 31, 2010, the company?s consolidated recoverable proven and probable reserves totaled 120.5 billion pounds of copper, 35.5 million ounces of gold, 3.39 billion pounds of molybdenum, 325.0 million ounces of silver, and 0.75 billion pounds of cobalt. The company was founded in 1987 and is headquartered in Phoenix, Arizona.
Advisors' Opinion:- [By Lee Jackson]
Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX) is a top diversified name to buy at Merrill Lynch and may offer investors the best total return play. The company by almost all metrics is undervalued, and it continues to raise its dividend yearly. Merrill Lynch has a $37 price target, and the consensus figure is $36.50. Investors are paid a very solid 4.0% dividend.
- [By Russ Kaplan]
One of these Black Swan events that recently happened was the Grasberg Mine incident in Indonesia, which is owned by Freeport-McMoran (FCX). Grasberg holds the world's largest gold mine and the third largest copper mine in the world.
- [By Matt DiLallo]
Freeport-McMoRan Copper & Gold� (NYSE: FCX ) is expected to report its second-quarter results on July 23. What's different this time around is that it will be reporting more than copper and gold earnings because the company's transition into oil and gas is now complete. Let's take a look at three burning questions investors want answered when the newly combined company reports.
- [By Ben Levisohn]
Barclays analyst�David Gagliano is out with a report on his dinner meeting with� Jim Flores, CEO of Freeport-McMoRan Copper & Gold’s (FCX) energy division.
Top Cheap Companies To Own In Right Now: Cardero Resource Corporation(CDY)
Cardero Resource Corp., together with its subsidiaries, engages in the acquisition, exploration, and development of mineral properties in Mexico, Peru, Argentina, the United States, and Canada. The company holds a 75% interest in the Carbon Creek deposit, a metallurgical coal development project located in the Peace River Coal Field of northeast British Columbia, Canada. It also has an option to acquire 100% interest in the Pampa El Toro project, an iron sands deposit, located in southern Peru; option to acquire up to an 85% interest in the Longnose property in St. Louis county, northeastern Minnesota; and 100% leasehold interest in the Titac property, located in St. Louis county, northeastern Minnesota. The company was formerly known as Sun Devil Gold Corp. and changed its name to Cardero Resource Corp. in May 1999. Cardero Resource Corp. was founded in 1985 and is headquartered in Vancouver, Canada.
Best Penny Stocks To Buy Right Now: Cloud Peak Energy Inc(CLD)
Cloud Peak Energy Inc., through its subsidiaries, engages in coal mining operations in the Powder River Basin of the United States. It produces sub-bituminous steam coal with low sulfur content for electric utilities and industrial customers. The company owns and operates Antelope surface coal mine located to the south of Gillette, Wyoming; the Cordero Rojo surface coal mine located to the south of Gillette, Wyoming; and the Spring Creek surface coal mine located in Montana. It also owns a 50% interest in the Decker surface coal mine located in Montana. As of December 31, 2010, it had approximately 970 million tons of proven and probable reserves. The company was founded in 1993 and is headquartered in Gillette, Wyoming.
Advisors' Opinion:- [By Dimitra DeFotis]
Consol Energy (CNX), �which also produces natural gas, was up more than 3%, as was Cloud Peak Energy (CLD).
The Moody’s press release, here. Coal insiders were active earlier this year, we noted here.
- [By Johanna Bennett]
As for specific stocks, the Goldman analysts issued five ratings changes:
Upgrade CONSOL Energy to Buy given strong production growth at its E&P segment, improving cash flow from the coal business and potential for asset sales/restructuring to help realize its SOTP value. Downgrade Arch Coal to Sell due to high leverage, peak valuations and low free cash flow levels. Neutral Ratings on Cloud Peal Energy (CLD), Alpha Natural Resources (ANR) and Walt Energy (WLT): Goldman downgrade Cloud to a Neutral given a lower production outlook and a reduced PRB price forecast. The firm upgraded Alpha and Walt to Neutral from Sell, predicting that met coal prices have bottomed.Arch Coal has fallen 5.7% to day to $4.26, followed by Cloud Pearl, down 3.4% to $14.68, and a 3% drop by Walt Energy to $14.10. Alpha Natural dropped 2.8% to $6.10. And CONSOL fell 0.9% to $33.46.
- [By Ben Levisohn]
The price of natural gas, however, has dropped 0.4% today, and wouldn’t you know it, coal stocks are weak. Cloud Peak Energy (CLD) has dropped 4.2% to $16.15, while Peabody Energy (BTU) has fallen 2.9% to $17.27. Arch Coal (ACI) is off 1.3% at $4.45, Alpha Natural Resources (ANR) has declined 1.4% to $5.76 and Consol Energy (CNX) has dipped 0.7% to $31.35.
Top Cheap Companies To Own In Right Now: MEDIWARE Information Systems Inc.(MEDW)
Mediware Information Systems, Inc., together with its subsidiaries, engages in the design, development, and marketing of software solutions targeting specific processes within healthcare institutions. The company offers software systems consisting of company's proprietary application software, and third-party licensed software and hardware. It licenses, implements, and supports clinical and performance management, blood donor, and blood and biologic management products in the United States; and medication management solutions in the United States, the United Kingdom, Ireland, and South Africa. The company?s blood and biologics management solutions include HCLL Transfusion and HCLL Donor, which address blood donor recruitment, blood processing, and transfusion activities for hospitals and medical centers; BloodSafe suite of hardware and software that enable healthcare facilities to store, monitor, distribute, and track blood products; LifeTrak software for blood centers; a nd BiologiCare, a bone, tissue, and cellular product tracking software. Its medication management products comprise WORx, a pharmacy information system to manage inpatient and outpatient pharmacy operations; MediCOE, a physician order entry module; MediMAR, a nurse point-of-care administration and bedside documentation module; MediREC, which assists in achieving compliance with a Joint Commission mandate; and pharmacy management and electronic prescribing systems. The company?s performance management products include InSight software that tracks performance metrics to assist healthcare managers to manage performance. It also provides software installation and maintenance services, as well as billing and collection services to home infusion and home/durable medical equipment markets. The company markets its products primarily through its direct sales force. Mediware Information Systems, Inc. was founded in 1970 and is headquartered in Lenexa, Kansas.
Advisors' Opinion:- [By CRWE]
Mediware Information Systems, Inc. (Nasdaq:MEDW) plans to acquire the assets of Indianapolis-based Strategic Healthcare Group LLC (SHG), a leading provider of blood management consulting, education and informatics solutions.
Top Cheap Companies To Own In Right Now: DRDGOLD Limited(DROOY)
DRDGOLD Limited engages in the exploration, extraction, processing, and smelting of gold in South Africa. It holds interests in the Blyvoor mine; and the Crown gold surface tailings retreatment facility that reprocesses sand and slimes dumps, as well as involves in the surface retreatment operations. The company was incorporated in 1895 and is based in Roodepoort, South Africa.
Top Cheap Companies To Own In Right Now: TranSwitch Corporation(TXCC)
Transwitch Corporation designs, develops, and supplies semiconductor and intellectual property solutions for voice, data, and video communications equipment. The company provides integrated multi-core network processor system-on-a-chip (SoC) and software solutions for fixed, 3G and 4G mobile, VoIP, and multimedia infrastructures. It offers converged network infrastructure products, including infrastructure VoIP processors comprising Entropia series of processors for wire-line and wireless carrier equipment; EoS/EoPDH mappers and framers for formats and data speeds in the access portion of the network; tributary switches that enable traffic to be switched or re-arranged; and carrier Ethernet solutions consisting of Ethernet controllers and switches, as well as circuit emulation and clock recovery devices. The company also provides FTTx protocol processors, such as mustang, a system-on-chip solution for EPON optical network unit equipment; COLT processor, a system-on-chip so lution for the optical line terminator equipment; and Diplomat-ONT product, an integrated SoC solution for GPON ONU applications, as well as access VoIP processors and access controllers. In addition, it offers broadband customer premises equipment, including multi-service communications processors comprising Atlanta processor, a multi-service SoC for customer premises equipment that supports toll-quality telephone voice, fax, and routing functionality; and HDMI, displayport, HDP, and Ethernet IP cores for consumer electronics, home network equipment, and industrial and automotive applications. The company serves public network systems OEMs, WAN and LAN equipment OEMs, Internet-oriented OEMs, and communications test and performance measurement equipment OEMs, as well as government, university, and private laboratories. It sells its products through direct sales force, independent distributors, and sales representatives. The company was founded in 1988 and is headquartered in Shelton, Connecticut.
Top Cheap Companies To Own In Right Now: Aegon NV(AEG)
AEGON N.V. provides life insurance, pensions, and asset management products and services worldwide. The company?s life insurance products include traditional, term, universal, whole, and other life insurance products sold as part of defined benefit pension plans, endowment policies, post-retirement annuity products, and group risk products; supplemental health insurance products comprise accidental death, other injury, critical illness, hospital indemnity, medicare supplement, and student health; specialty lines consists of travel, membership, and creditor products; and long term care insurance products for policyholders who require care due to a chronic illness or cognitive impairment. It also offers a range of savings and retirement products and services, including mutual funds, and fixed and variable annuities, savings accounts and investment contracts, segregated funds, guaranteed investment accounts, and single premium immediate annuities, as well as investment advice to individuals. In addition, the company offers employer solutions and pensions, such as retirement plans, pension plans, and pension-related products and services; investment products, including onshore and offshore bonds, and trusts; reinsurance products and solutions to life insurance and financial services companies; general insurance products comprising house, car, and fire insurance; and asset management products and services, including general account assets, unit-linked funds, and third party activities. AEGON N.V. markets its products through independent and career agents, financial planners, registered representatives, independent marketing organizations, banks, broker-dealers, benefit consulting firms, wirehouses, affinity groups, institutional partners, independent managing general agencies, and specialized financial advisors, as well as through online, direct, and worksite marketing. The company was founded in 1900 and is headquartered in The Hague, the Netherl ands.
Top Cheap Companies To Own In Right Now: Partner Communications Company Ltd.(PTNR)
Partner Communications Company Ltd. provides various telecommunications services in Israel. It offers cellular telephony services on GSM/GPRS and UMTS/HSDPA networks. The company also provides basic services, including domestic mobile calls, international dialing, roaming, voice mail, short message services, intelligent network services, content based on its cellular portal, data and fax transmission, and other services. In addition, it offers Internet services provider services that provides access to the Internet, as well as home WiFi networks; value added services, such as anti-virus and anti-spam filtering; and transmission services; and Web video on demand services, music tracks, and games. Further, the company provides voice over broadband and primary rate interface fixed-line telephone services; and data capacity services. Additionally, it offers content services comprising voice mail, text, and multimedia messaging, as well as downloadable wireless data application s, including ring tones, music, games, and other informational content; and sells handsets, phones, routers, and related equipment. The company markets its products through its sales centers, business sales representatives, traditional networks of specialized dealers, and non-traditional networks of retail chains and stores under the Orange brand name. Partner Communications Company Ltd. was founded in 1997 and is headquartered in Rosh Ha-ayin, Israel.
Advisors' Opinion:- [By Roberto Pedone]
Another under-$10 wireless telecom player that's starting to move within range of triggering a major breakout trade is Partner Communications (PTNR), a telecommunications company, provides cellular and fixed-line telecommunication services in Israel. This stock is off to a strong start in 2013, with shares up sharply by 29%.
If you take a look at the chart for Partner Communications, you'll notice that this stock has been trending sideways for the last month, with shares moving between $7.28 on the downside and $7.96 on the upside. Shares of PTRN are bucking the overall market weakness today as the stock starts to move within range of triggering a breakout trade above the upper-end of its sideways trading chart pattern.
Market players should now look for long-biased trades in PTNR if it manages to break out above some near-term overhead resistance levels at $7.80 to $7.85 a share and then once it clears its 52-week high at $7.96 a share with high volume. Look for a sustained move or close above those levels with volume that registers near or above its three-month average volume of 107,303 shares. If that breakout triggers soon, then PTNR will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $10 to $12.20 a share.
Traders can look to buy PTNR off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $7.38 to $7.28, or below its 50-day at $6.97 a share. One can also buy PTNR off strength once it clears those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.
Xyratex's Distorted Valuation
Two weeks ago an SA contributor, Kingsley Park Capital, pointed out that shares of Xyratex (XRTX) have a 70% upside. I suggest KPC is being conservative. I think its opinion is priceless, but I would like to offer my financial model to support this thesis and show that the moment the market realizes what's going on, XRTX should be worth $20-$30 a share a year or so from now. Let's get started.
A Reminder
I have been following XRTX for the last couple of years as I cover the HDD industry very closely. XRTX sells HDD capital equipment, and following them helped me get a better feel for the CAPEX environment for the HDD duopoly. I witnessed XRTX's revenues plunge from about $455M a quarter back in 2010, to under $200M a quarter in Q1-13, a decrease of approximately 65% in revenues and more than 85% in net profits. This was mainly because NetApp (NTAP), once responsible for more than 45% of XRTX's Enterprise Data Storage Solution business, or $150M a quarter, started to source their disk arrays in-house. This trend was true with Dell (DELL) as well. I've summed up, NetApp's, Dell's and IBM's (IBM) contributions to XRTX's revenues for the past 8 quarters in the Enterprise Data Storage Solution segment.
XRTX Large Customers In The Past 8 Quarters in EDSD Segment | ||||||||
Customer | Q3-11 | Q4-11 | Q1-12 | Q2-12 | Q3-12 | Q4-12 | Q1-13 | Q2-13 |
NetApp | 131.2 | 151.6 | 125.1 | 133.6 | 93.8 | 90.1 | 46.6 | 40.7 |
Dell | 90.8 | 81.1 | 70.7 | 64.2 | 53.6 | 30.0 | 24.9 | 20.3 |
IBM | 40.3 | 59.9 | 46.2 | ! 41.7 | 42.4 | 44.0 | 49.9 | 47.0 |
Other | 74 | 59.9 | 29.9 | 41.7 | 33.5 | 36.0 | 44.9 | 48.6 |
By now you get the point. XRTX looked like the worst investment idea back then. The stock played along. Since the problems started, it plunged about 65% at the lowest point in late 2012. As someone who listens regularly to XRTX management earning calls, it seemed like they were perfectly fine with this "free fall" the company experienced. The CEO and CFO both took home $1.5M in 2011. In their 2012 annual report they buried this number even deeper, but we can safely assume it was the same. The company was still profitable, but the direction it was heading in was clear. In January of 2013, Baker Street Capital Management, then with about 22% ownership, sent a letter to the board confirming this lack of initiative from the XRTX leadership and demanded action.
Baker Street bought into the company fast. Since October of 2012 they have bought almost 7 million shares in 3 months. Baker made it very clear that they would like to see some bang for their buck. Since they started buying the stock it has almost doubled in value. After a few months, Baker cleaned up the company's leadership and got 2 of their own choices as directors. The company is still in the process of finding a new CEO. One of the most interesting findings was that, the former CEO said that it only needed $40M-$50M of R&D expense to maintain its core business. At that time, the company was running at a rate of almost $100M annual R&D expenses. That entire R&D expense was going towards the new "Growth Segment" for the HPC segment, or High Performance Computing, with the ClusterStor as the main product in this segment.
The Near Future
This all leads us to the present day. I built a financial model based on the following as! sumptions! , most of which are sourced from XRTX earning calls:
1. HDD capital spending is about to pick up modestly in 2014, and grow more in 2015. This is based on the conservatism of the HDD companies, which saw a depressed TAM in recent quarters. They haven't invested in new equipment in a while, and they have multiple new products launching nowadays, like the 5mm HDD that is meant for tablets.
2. Their new product, the ClusterStor, will grow at the rate of 24%-53% a year according to the expectations of Cray (CRAY), a reseller of the ClusterStor.
3. R&D expenses will start winding down to the rate of $80M a year, by the end of 2014. The former CEO did say they only needed $40M-$50M a year to maintain their core businesses, but he wasn't referring to the R&D needed to maintain the HPC segment.
4. Gross margins will go up, as XRTX will be able to get 45% of the gross profits from the HPC business.
5. NetApp and Dell will keep lowering their orders from XRTX, at the same rate as they did recently, until they finally stop being a customer of the company, and in-source all of their needs.
I broke down the HPC revenue out from the Enterprise Storage Solutions segment, as XRTX are not obliged to do so until it becomes 10% of total revenue. We do know it was between $10M and $15M in the last quarter, according to their CFO.
We know the assumed growth ratio, and the fact that XRTX management guides to about $60M in ClusterStor revenues in 2013. So here are the results of my model.
Segment Revenue for XRTX 2013-2014 | ||||||||
Quarter | Q1-13 | Q2-13 | Q3-13 | Q4-13 | Q1-14 | Q2-14 | Q3-14 | Q4-14 |
Enterprise Data Storage Solutions | 166.5 | 156.8 | 153.8 | 151.4 | 147.2 | 146.7 | 1! 52.4 | 159.0 |
HDD Equipment | 19.0 | 46.8 | 50 | 53 | 55 | 60 | 65 | 70 |
ClusterStor | 10 | 12.5 | 15 | 20 | 21.5 | 22.5 | 23.5 | 25 |
Total Revenue | 195.5 | 216.1 | 218.8 | 224.4 | 223.7 | 229.2 | 240.9 | 254.0 |
Operating Expenses For XRTX 2013-2014 | ||||||||
Quarter | Q1-13 | Q2-13 | Q3-13 | Q4-13 | Q1-14 | Q2-14 | Q3-14 | Q4-14 |
R&D | 24.4 | 25.7 | 25 | 24 | 23 | 22 | 21 | 20 |
S&G&A | 17.7 | 16.9 | 17.5 | 17.8 | 18 | 18.25 | 18.5 | 18.75 |
Other | 0.492 | 1.7 | 1.2 | 1.2 | 1.2 | 1.2 | 1.2 | 1.2 |
Total OPEX | 42.6 | 45 | 44.2 | 43.5 | 42.7 | 41.9 | 41.2 | 40.45 |
GAAP EPS for XRTX 2013-2014 | ||||||||
Quarter | Q1-13 | Q2-13 | Q3-13 | Q4-13 | Q1-14 | Q2-14 | Q3-14 | Q4-14 |
GAAP EPS | -0.19 | 0.16 | 0.40 | 0.45 | 0.54 | 0.68 | 0.83 | |
All numbers are in millions of USD except per share data.
Valuation and conclusion
Staying on the conservative side, I get an EPS for 2014 of $2.50, while the 3 analysts that Yahoo!Finance poll for an estimate, hold a mean estimate of $0.25 for the entire year of 2014. I believe none of them have taken into consideration the HPC segment, or the pressure Baker Street is putting to bring R&D costs down. With $90M in cash, XRTX had more than $3 a share in cash. That means the enterprise value of the share is about $7 (as of September 25th 2013). This gives the company an EV/P of 2.8 for 2014 earnings. At the rate that XRTX can, and I think will, grow their bottom line, it is very conservative to give the business an EV/P of 8.5. But we do want to be conservative. Assuming XRTX will continue to grow their cash at a rate of $5M a quarter, we will get to $115M in cash by the end of 2014, or $4.11 a share. The EV/P of 8.5 and $4.11 in cash gets us to a share price of $25.36. Of course, the situation here has to be monitored throughout the year to make sure the assumptions get validated, or see whether any change is needed. But hey, this is what investing is all about, and this is why I'm here. Looking forward to your comments and ideas.
Source: Xyratex's Distorted ValuationDisclosure: I have no positions in any stocks mentioned, but may initiate a long position in XRTX over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. (More...)
Before Buying OmniVision, Look Both Ways
NEW YORK (TheStreet) -- Since reporting fiscal first-quarter earnings results that disappointed the Street, shares of OmniVision (OVTI), which were already in a downtrend, have lost another 17%.
Understandably, OmniVision bulls insist that the stock is oversold, while "observers" are debating whether to take a closer "peek" at a possible turnaround candidate.
Although the valuation does look interesting here, I would be careful about catching -- what might prove to be -- a falling knife.
This is not the first time this company has taken some bruises. While OmniVision, which has a strong position in the image-sensor market, has benefited from its ties to Apple (AAPL), the company has also experienced some volatile price swings. After this recent selloff, it's anyone's guess where this stock is heading next, especially in light of what I believe was a decent quarter. First things first: Given the weakness we have seen in mobile handset shipments, that OmniVision was able to grow revenue by close to 45% year over year was pretty impressive. Plus, the fact that revenue advanced 11% sequentially amid a low ASP, or average selling price, environment was equally remarkable. Unfortunately though, OmniVision still didn't do enough to please the Street -- which had modeled for an extra 2% to 5% growth (according to some estimates). Now, for a little more context, consider that Qualcomm (QCOM), which is the leader among semiconductors in the mobile/wireless business, is coming off a quarter during which revenue advanced 35% year over year. In the same category, Broadcom (BRCM) just posted 7% revenue growth, which fell short of Street estimates by nearly 10%. Yet, neither Qualcomm nor Broadcom have seen their stocks erode to the degree of OmniVision. This is even though all three companies are dealing with the same fears of high-end mobile device saturation. By that logic, investors are betting that OmniVision's 17% decline in the stock was an overreaction. It very well may be. But there's one key difference. As has been the case for quite some time, OmniVision continues to suffer from weak leverage. Also, profitability hasn't always been strong, which explains the company's history of volatility.
Again this quarter, gross margins, which declined by almost 2% year over year, reminded analysts of just how competitive OmniVision's market has become. Not to mention, management didn't help matters by issuing guidance that was more than 7% below estimates, effectively confirming reasons for the panic.
Now, I do understand that management didn't want to set expectations too high and set the company up to fail. But it's worth asking if OmniVision's relationship with Apple is as strong as previously perceived?
To be fair, I don't have sufficient data to model how much revenue growth OmniVision should generate from Apple's recent launch of the iPhone 5S and the 5C. But looking back at OminiVision's fiscal second-quarter of 2013 (November quarter 2012), the company posted an almost 80% jump in revenue, helped (in part) by a 62% increase in device shipments. What I also know is that, OmniVision's second-quarter performance followed Apple's launch of the original iPhone 5 and the iPad mini last September.
But understand, I'm not suggesting that OmniVision is guaranteed to have a blowout quarter. Nor am I suggesting that management has no clue what it's doing. But I do see several catalysts to suspect that management may be low-balling guidance just a bit, especially if Apple announces a deal with China Mobile (CHL). The other thing to consider is that, Avago (AVGO), which is another Apple supplier, recently raised guidance -- presumably, in anticipation of better-than-expected demand from the iPhone launch. So far, both the iPhone 5S and 5C have received better-than-expected reviews, relative to the initial downbeat response by the Street. What this means is that there is no clear answer as to what OminiVision's management might be thinking. However, from a pure valuation play, I do see a possible bounce in the stock from the 17% decline. And if Apple does contribute to a recovery in ASPs, which would then dispel fears of high-end device saturation, OminiVision stock can head back toward the $18 to $20 range. But let me remind you of the volatile nature of this company. I would suggest you look both ways before crossing that bridge.
At the time of publication, the author was long AAPL.
Follow @saintssense
This article was written by an independent contributor, separate from TheStreet's regular news coverage.
Richard Saintvilus is a co-founder of StockSaints.com where he serves as CEO and editor-in-chief. After 20 years in the IT industry, including 5 years as a high school computer teacher, Saintvilus decided his second act would be as a stock analyst - bringing logic from an investor's point of view. His goal is to remove the complicated aspect of investing and present it to readers in a way that makes sense. His background in engineering has provided him with strong analytical skills. That, along with 15 years of trading and investing, has given him the tools needed to assess equities and appraise value. Richard is a Warren Buffett disciple who bases investment decisions on the quality of a company's management, growth aspects, return on equity, and price-to-earnings ratio. His work has been featured on CNBC, Yahoo! Finance, MSN Money, Forbes, Motley Fool and numerous other outlets. Follow @saintssenseรข€‹Biotech-Focused Baker Bros. Accumulates These 3 Stocks
Baker Bros. Advisors is a ~5 BB small & micro-cap focused biotechnology fund run by Julian Baker and Felix Baker. The fund has generated exceptional returns this year – largely due to a huge long position they started in ACADIA Pharmaceuticals (NASDAQ: ACAD) (YTD = +481%). While the fund is quite secretive, it is required file SEC Form 13F which allows the public to see which particular biotech stocks are being accumulated.
This allows investors the opportunity to invest alongside the fund in some of its high-risk / high-reward bets. Here are four stocks that have seen recent buying:
Prothena Corp. (PRTA)
Baker Bros. Advisors holds 369,630 shares of PRTA - equivalent to a $7.5 MM stake at time of writing. The company has been adding to PRTA, with the most recent transaction being in Q2 2013 with a net purchase of 177,954 shares.
Prothena is a company that specializes in the development of monoclonal antibodies for the treatment of diseases that cause protein misfolding or cell adhesion. Their flagship development program is for an antibody known as NEOD001, which is used in a particular type of amyloidosis known as Amyloid Light-chain amyloidosis. This particular indication would allow NEOD001 to target 2,000 to 3,000 US patients per year after potential FDA approval at orphan drug pricing.
Preclinical trials performed with NEOD001 demonstrate strong activity in mice, as well as interaction between the antibody and multiple classes of amyloids (AL, AA). This suggests that the indication can be expanded later on.
NEOD001 is currently in a Phase I trial that is expected to end in 2016. The trial will also establish the dosing levels that will be used in future trials, and will also provide the first evidence of NEOD001 efficacy in humans. Specifically, the company will look for interaction between the monoclonal antibody and light-chain amyloids. The "lasting power" of the monoclonal antibodies in the body will also be examined, since this is crucial for determining the optimal dose.
Prothena's NEOD001 is less developed than GSK's TTR Rx and ALN-TTR02/ALN-TTRsc, although investors should note that the valuation is significantly lower (at $357 MM). Also important to realize is that NEOD001 targets a different indication with a different mechanism, while TTR Rx and ALN-TTR02/ALN-TTRsc both target production of Transthyretin at the genetic level.
La Jolla Pharmaceutical Company (LJPC)
Baker Bros. participated in a recent $10 MM financial restructuring and private placement for La Jolla, and accumulated 14.9 MM shares of common stock and 2,426 shares of Series F preferred stock. This is equivalent to a newly established $3.5 MM overall investment in La Jolla Pharmaceutical Company.
La Jolla is another company that focuses on rare disease indications. The recent financing provides necessary funds for the continued development of the company's two lead products – GCS-100 and LJPC-501.
GCS-100 is a Phase II compound, and is the only galectin-3 inhibitor currently in clinical development. Ongoing research suggests that Galectin-3's role in various other diseases may be significant, as Galectin-3 overexpression has been shown to lead to fibrosis and scarring of tissue which leads to additional complications found in other indications, but La Jolla is limiting itself to the diseases/indications that have the strongest links to Galectin-3 overexpression. These include Chronic Kidney Disease (CKD), Chronic Liver Disease (cirrhosis), and cancer immunotherapy.
GCS-100 completed a Phase 1 trial earlier in the year, which attempted to find the maximum tolerated dose (MTD) of the compound while measuring safety in patients with CKD. The MTD was not reached, but no patients saw any serious adverse events up to this point. A Phase II clinical trial for GCS-100 was then initiated in June to study the effects of this first-in-class galectin-3 inhibitor on patients with stage 3b or stage 4 CKD. Enrollment into the trial is still proceeding, and estimated completion of the trial is March 2014.
The other main compound in the company's pipeline is LJPC-501, which is a peptide agonist of the renin-angiotensin system. LJPC-501 is being studied for use in hepatorenal syndrome – a serious disease where patients see kidney failure as a result of cirrhosis of the liver. The FDA approved the IND application for this drug, and a Phase 1 trial is scheduled for the fourth quarter of 2013.
Idera Pharmaceuticals (IDRA)
Baker Bros. Advisors also started a new position in IDRA of 4.5 MM shares – equivalent to a $7.9 MM investment in the company.
Idera's flagship development program is for a Toll-like receptor (TLR) 7, 8, and 9 antagonist IMO-8400, which is being developed as a treatment for plaque psoriasis. The company released Phase 1 data for this therapeutic earlier in the year, which showed that the drug was well tolerated by patients at all doses.
TLR receptors target a number of cell-signaling molecules (cytokines) that activate the immune system. The company believes that there is clear potential for indication expansion given that IMO-8400 sees efficacy against psoriasis, since many autoimmune diseases are similar and have overlap with one another in terms of treatment options. Lupus is one of many other serious autoimmune diseases that may be targeted by IMO-8400.
Phase II trial data should be available as early as Q1 2014.
Walgreens Q4 Earnings Rise Above Estimates (WAG)
On Tuesday, drugstore chain Walgreen Company (WAG
) reported higher fourth quarter earnings, which came in above analysts’ estimates.
The Deerfield, IL-based company recorded fourth quarter earnings of $657 million, or 69 cents per share, up from $353 million, or 39 cents per share, a year ago. Excluding special items, earnings were $702 million, or 73 cents per share. Analysts expected to see earnings of 72 cents per share.
Total revenue was $17.94 billion for the quarter, up from $17.07 billion last year. Analysts expected to see revenue of $17.95 billion.
During the quarter, total comparable store sales increased 4.6%, while front end comps rose 1.6%. Customer traffic decreased by 1.9%, while basket size rose 3.6%.
Walgreen shares were up 26 cents, or 0.48%, during pre-market trading Tuesday. The stock is up 45% YTD.
Shell Puts Texas Assets on the Block
Anglo-Dutch oil supermajor Royal Dutch Shell PLC (NYSE: RDS-A) announced Monday that it will sell its assets in the Eagle Ford shale play in south Texas. The sale follows an announcement in August that Shell would write down $2.1 billion in the value of its North American assets.
Shell holds leases on 106,000 acres in the Eagle Ford play and currently operates 192 wells in the region. But the company did not acquire the leases until 2010, by which time the price of natural gas had begun falling. Shell said its Eagle Ford assets did not meet the company’s targets for scale and profitability.
When the company took the write-down on its North American assets, it laid the blame squarely on the low price of natural gas. At the same time, the company dropped its production targets for oil production from the shale formations. The writing was on wall at that point.
Some natural gas producers, like Exxon Mobil Corp. (NYSE: XOM) and Chesapeake Energy Corp. (NYSE: CHK), have successfully ridden recent high oil prices from the liquids-rich plays in the Eagle Ford play. Shell has been unable to do so.
Shares of Shell are down about 0.3% on Monday morning, at $65.67 in a 52-week range of $62.65 to $73.00.