52-Week Highs: ENZN, SCVL, BONT

ENZN: Pipeline Drug Data and Recent $300 million Sale Propels Stock

 SCVL: Retailer Doubles Profits and Posts Q3 2009 EPS of $0.59

 BONT: Smaller Q3 Loss and Brighter Guidance Brings in New Buyers

Gaining 2% this morning is Enzon Pharmaceuticals (ENZN) http://www.enzon.com/ currently trading in the $10.45 range. ENZN is a very heavily traded SmallCap. ENZN topped its 52-week high of $10.33 set on 11-18-09 today. ENZON has trailing twelve month revenues of $188 million with a corresponding EPS of $0.02. ENZN returned a positive profit during the 'great recession'.

As the charts below show, ENZN had a September floor of $8 turning into $8.50 in October with spikes into the $9-9.50 range and now the stock is reaching for $11. I think it will make it. I believe $9 is the new floor for this stock and it is a near-term (3 Mo) 'Buy' for me. Why? The strength of its pipeline.

Today, ENZN presented data from its pipeline programs at the 2009 EORTC-NCI-AACR (European Organization for Research and Treatment of Cancer-National Cancer Institute-American Association for Cancer Research) annual meeting in Boston, Massachusetts.

"We are pleased to present new data from our novel pipeline programs. Our PEG-SN38 continues to be well tolerated and demonstrates antitumor activity in previously treated patients with solid tumors," said Jeffrey H. Buchalter, president and CEO of ENZN.  "Additionally, our novel locked nucleic acid (LNA)-based antagonists including Survivin EZN-3042, continue to show promise for inhibition of tumor growth in a variety of cancers."

The ENZN Trials and Pipeline

In addition to PEG-SN-38 in Phase I and EZN-3042 in Phase I, EZN-2208 is in both phase I and Phase II trials for treating different afflictions. The other ENZN LNA Antagonists, in addition to Survivin, are Androgen Receptor (AR) and Beta-Catenin, GIL2. EZN-4176, EZN-3889 and EZN-3892 are all currently targeted at tumor growth inhibition in various maladies and the latter two specifically inhibit a transcription factor that has been difficult to target with conventional agents. There has been no bad news from ENZN's studies, tests or trials and as they move through the phases, even the more experimental drugs are finding success.  

On November 9, ENZN sold parts of its enterprise to Italian drugmaker Sigma-Tau Group for $300 million with ENZN management noting they want to focus on ENZN experimental cancer drugs and technologies. The specialty drugs Sigma-Tau is buying from ENZN are cancer drug Oncaspar, fungal infection treatment Abelcet, meningitis drug DepoCyt, and Adagen, which is used for severe combined immunodeficiency disease, or "Bubble Boy Disease." The deal is expected to close in Q1 2010.

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ENZN 3-Month                                                       ENZN 1-Month

MANAGEMENT MANAGEMENT MANAGEMENT

Gaining 3.5% this morning is Shoe Carnival (SCVL) http://www.shoecarnival.com/ currently trading in the $17.55 range. Today, SCVL topped its old 52-week high of $17.38 set on 10-22-09 and doubled its average daily trading volume in the first few hours of the session. In my opinion, SCVL has one of the best management teams of all the SmallCap retailers. They understand both the top and bottom line and know when to grow, hold, and sell. SCVL returned a diluted EPS of $0.37 in the trailing twelve months on $647 million in revenues, when other retailers were getting clobbered and going out of business. Does anybody remember Circuit City?

Even at its new high today, SCVL is a 'Buy' for me. In September, the stock had a $13 bottom and then settled into a 3-Month $15 floor with $16 and $17 spikes. I believe the floor on SCVL is $15 and there will be $18 and $19 spikes as it goes through the holidays. There is money to be made here as the recovery expands.    

The jump today came on the SCVL Q3 2009 earnings report. Q3 09 profits more than doubled on fewer clearance items and strong sales of boots. Q3 09 profits rose to $7.5 million, or 59 cents per share, from $2.6 million, or 21 cents per share, in Q3 2008. Wall Street was looking for a Q3 09 EPS of $0.32.

Q3 09 sales increased 12.6%, growing to $191.5 million from $170.1 million in Q3 08 and a KEY retail indicator posted by SCVL had sales at stores open at least a year rising 10.2% during Q3 09. That's great management.

"We expect the early strength in boots, particularly women's fashion boots, to continue into the holiday season," said Chief Executive Mark Lemond. "... (the Q3 09) sales increase, combined with a higher gross profit margin and controlled expenses, resulted in our second best quarterly earnings in the Company's history."

SCVL opened 16 new stores in the first nine months of fiscal 2009 and closed 3 with six additional stores on the chopping block. SCVL opened 4 stores during Q3 09. SCVL started 2009 with 304 stores in 29 states. 'Buy'.

SCVL 3-Month                                                     BONT 3-Month

Gaining 4.69% this morning is another retailer, Bon-Ton Stores Inc., (BONT) http://www.bonton.com/ currently trading in the $11.68 range. BONT has nearly tripled its average daily trading volume this morning. Soaring past its previous 52-week high of $11.25 set on 11-16-09, BONT could be the retail comeback story of the year. On trailing twelve month revenues of $3.10 billion, that's right, billion, BONT posted a corresponding diluted EPS loss of $10.78. BONT was one of those retail chains that got clobbered during the 'great recession'.

BONT management has staged a remarkable turnaround and the chart above shows a steady climb from a $7 floor towards a $12 value. I think they will settle on a $9 floor with spikes into the $14 range during the holidays. This is a near-term 'Buy' for me.

BONT released Q3 2009 numbers today and though there were losses, they were much, much smaller than the sequential quarters. That gave the stock its strength today. Q3 09 BONT sales were down 3% and shares lost 24 cents compared with 86 cents in Q3 2008.

The BONT gross margin rate increased 200 basis points to 37.6%, boosted by well-managed inventory levels and reduced levels of clearance merchandise and the SG&A was lower than Q3 08.

BONT CEO Bud Bergren, said, "...We were pleased with the sustained improvement of our sales trend throughout the quarter, which included a comparable store sales increase of 3.1% in the month of October." BONT operates approximately 280 stores in 23 states.

BONT GUIDANCE

Management sees a loss of $1.20 to $2.30 a share for 2009. It had earlier expected a loss of $2.50 to $3.70 a share. A BIG improvement. And BONT intends on reducing its debt. Yesterday the Company announced it has agreed with lenders to take a $675 million 3.5-year senior secured asset-based credit facility to replace its existing $800 million revolving credit facility due to mature in March 2011. And BONT also said it has closed on a $75 million second-lien term loan, which will mature on Nov. 18, 2013. The company will use part of the loan to pay down part of outstanding debt. That's the spirit.

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