Break-Out Performers: INAP, SNTA, SIMO

Trends, Charts and Exclusive Opinion

Primary Products/Services Push Three SmallCaps

INAP: Web-Video Provider Handles Sundance Site-Surges & Downloads 

SNTA: Drug Inhibitor Blocks Protein Common to Various Leukemia’s  

SIMO: Taiwan Semiconductor Co Ships to China, Japan Mobile TV Market

Gaining 6.58% this morning is Internap Network Services Corporation (INAP) http://www.internap.com/ currently trading in the $4.68 range. INAP has a 3-Month average daily trading volume of 288,917 shares. INAP is widely held by institutions. INAP has a 52-week high of $5.25 set on 01-08-10 with trailing twelve month revenues of $256+ million. INAP really liked the $3 range in 2009 with some variances up and down by a few cents in either direction. INAP kept a $3 floor for nearly 8 months before staging a surge in Nov carrying it into the $5 range in Jan.

There’s been some profit taking of late, but I believe the stock can hold the $4.50-5.00 range. If INAP can land another notable ‘name’ like the Sundance Festival as a year-round client in Q1 2010, I think the stock could move into the $6 range and that approximate $1.32 spread (from the current price) could be where some money is made. I like this company and see its tested services becoming more and more in demand. INAP is a short-term (6 Mo) ‘Buy’ consideration for me. On Tuesday, March 2, INAP will release its Q4 & FYE 09 results.   

INAP was the ‘Official Provider’ of its Content Delivery Network (CDN) services for the 2010 Sundance Film Festival held this past Jan in Park City, Utah. The Sundance Institute is used INAPs CDN during the Festival and will continue to use it on an ongoing basis to simplify and streamline the creation, delivery and management of interactive web content that promotes the event itself. In 2009, visitors to the Sundance Film Festival website downloaded nearly three million videos; and in the months surrounding the annual Sundance Film Festival, website traffic typically surges dramatically, averaging between 50,000 and 150,000 unique visitors daily.

The INAP potential is here: as online video gains in popularity, the performance of the network is also becoming a top priority, with viewers showing little tolerance for slow-loading video. A recent study by analytics firm TubeMogul found that 81.2% of web video viewers click away when videos are slow to load and that ‘rebuffering’ occurs in nearly one out of every 25 streams. INAPs CDN uniquely addresses this issue, ensuring an optimized video viewing experience through its patented Managed Internet Route Optimizer technology.

Gaining 3.91% this morning is Synta Pharmaceuticals Corporation (SNTA) http://www.syntapharma.com/ currently trading in the $4.25 range. SNTA has a 3-Month average daily trading volume of 294,232 shares. SNTA has a 52-week high of $9.07 set a year ago on 02-09-09. SNTA was at the $2 level by March and staged a strong rally to $5 in June. SNTA then spent 5-Months at the $3 level with a subsequent jump to $7 in Dec. That’s all fairly typical for a Pharma stock with drugs in development and in various stages of trials. SNTA does have two really good numbers: trailing twelve month revenues of $140+ million and a positive, corresponding diluted EPS of $1.77. SNTA is widely held by insiders. SNTA is a near-term (3 Mo) ‘Watch Closely’ for me. If it can set a floor in $4 range, I would change that to a ‘buy’ consideration.

Good News

Today, SNTA announced that preclinical results presented at the “Bridging the Gap 2010” Hematologic Conference, held in Singapore City, Singapore, February 5-7, 2010, shows that STA-9090, an SNTA potent inhibitor of heat shock protein 90 inhibits the Wilms’ tumor 1 protein, a key transcription factor that drives disease progression in acute myeloid leukemia (AML) as well as certain other leukemias. STA-9090 is currently enrolling patients in two clinical trials in AML and other hematologic cancers.

SNTA recently made a public stock offering to raise approximately $26+ million and in Jan the underwriters completed their option to purchase an over-allotment option; the dilution is done and SNTA will have general expense and ‘trial costs’ capital on hand. 

Gaining 6.76% this morning is Silicon Motion Technology Corporation (SIMO) http://www.siliconmotion.com/ currently trading in the $3 range. SIMO has a 3-Month average daily trading volume of 240,602 shares. SIMO has a 52-week high of $4.48 set on 06-12-09 with trailing twelve month revenues of $90+ million. SIMO has established a $3 to $3.50 floor since April with spikes into the $4 range. SIMO has slid down through Jan to its current level due to weak Q4 results, some profit taking, and a slight increase of short-sellers. The good news about SIMO is that it is shipping product. SIMO is also a near-term ‘Watch Closely’ stock for me. Here’s why: if SIMO can continue to ship and increase revenues, they could develop a sequentially stronger quarter and return a positive EPS.   

SIMO Q4 09 net sales decreased on 1% from Q3 09 but its Q4 GAAP net loss increased to $17.3 million from a loss of $4.7 million in 3Q 09. The good news For SIMO was that q-o-q, its overall and storage controller units increased shipments, but the y-o-y figures were disappointing. SIMO did however secure a second design win for the Brazilian ISDB-T mobile TV market as well another design-win for the Japan domestic ISDB-T mobile TV market. SIMO also began shipping its mobile TV solution for the Chinese market with LG and Lenovo handsets and began shipping its transceiver to China included in Nokia mobile handsets. SIMO mobile products include flash memory cards, USB flash drives, embedded flash applications, and card readers.

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