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MAXY: Buying Back 6.6 of 38.5 Million Shares Out Inspires Traders
MDSO: Q3 09 Revenues Up 27% with $0.15 Q3 EPS
KOPN: Research House Needham Starts Coverage with a "BUY" Rating
Gaining 12.13% this morning is Maxygen Inc., (MAXY) http://www.maxygen.com/ currently trading in the $5.60 range. MAXY sailed past its 3-Month average daily trading volume of 168,365 shares within the first hour of today's session on news of its tender offer to buy back 6.6 million shares from its 38.5 million shares outstanding (Oct 30).
Currently priced at a little more than half its 52-week high of $9.49 set on 01-08-09, MAXY has trailing twelve month revenues of $113 million yielding a diluted EPS of $1.72 during the 'great recession'. In this current range of $5, this is a 'Buy' stock for me. I base this on the MAXY turn-around efforts. With a $5 floor, you can see by the chart it had reached a peak in the $9 range then took 'everyone's' April dip, rose out of the loss and then began its current slide in June. Can it make it back to those $9 days? Maybe- but I do believe it will make it back to $7 in the near-term if the new management will keep doing 'smart' things like the buy-back offer.
The Buy Back in a Nutshell
Today, MAXY, a biotech company, started its tender to buy-back 6.6 million shares of its outstanding stock of 38.5 million; approximately a 17% repurchase of public shares. MAXY will buy back the shares in 'Dutch Auction' fashion for $5.30 to $6.10 for each share. MAXY's closing price on the Nasdaq Global Market yesterday was $5.03. Lazard Freres & Co. LLC is providing strategic advisory services to MAXY.
Management
MAXY has $203 million in cash and equivalents on hand (09-30) and instead of diluting share value by issuing more common stock to increase its coffers, the 'new' management took the far more aggressive approach to get the stock back on track to that $9 level by spending some of that money and increasing shareholder value by decreasing the number of shares outstanding. Regardless of market capitalization, this is always considered 'A move of strength' by management.
On November 5, MAXY reported a net loss of $0.57 EPS or $21.7 million. The loss was attributed to a new joint partnership and restructuring. Q3 2009 revenue was $7.8 million compared to $92.1 for Q3 2008. Awful. The good news about MAXY is; that James Sulat, a member of MAXY's board of directors replaced both the CEO and the CFO on the first of October.
It seems that Mr. Sulat wants to turn the company around to a profit and knows how to go about. Good. MAXY's drugs in testing include: Maxy-G34, a potential treatment for the blood disorder neutropenia (which has completed Phase IIa) and others drugs aimed at autoimmune diseases and transplant rejections.
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MAXY 3-Month MAXY 1-Year
Gaining 4.68% this morning is Medidata Solutions, Inc., (MDSO) http://www.mdsol.com/ currently trading in the $15.90 range. MDSO doubled its trading volume early in today's session on yesterdays after market Q3 earnings report. MDSO is approximately $3.83 off its 52-week high of $19.73 set on 08-03-09. The floor on MDSO is $15 and with positive, 'reactionary' spikes in the $17 range, I believe there is near-term support for this stock at $17 and it can establish that threshold as its new floor. There is money to be made here and this is a 'Buy' stock for me.
The MDSO Q3 09 numbers were impressive: $0.15 non-GAPP diluted EPS, net revenues were $35.2 million, up 27% from Q3 2008, and Q3 09 application services were up 36%. MDSO provides software to big and small Pharma companies (like Johnson & Johnson) and started trading in public shares in June. In Q3, MDSO prepaid the outstanding balance of its $15.0 million term loan under its existing credit facility and has no long-term debt as of the end of the quarter.
One other note from MDSO and its Q3 09... The U.S. Department of Interior on behalf of the National Institute of Health's National Cancer Institute (NCI) has signed a multi-year agreement to make MDSO's flagship product, Rave, available for use throughout the NCI Clinical Research Enterprise. 'Buy'. An October upgrade on MDSO at Citigroup from 'Hold' to 'Buy' remains.
MDSO GUIDANCE
For 2009, the company expects a net income of $10.5 million to $11.5 million, excluding items, up from its previous view of $6.5 million to $8.5 million.
MDSO KOPN
Gaining 9.41% this morning is S&P SmallCap 600 company Kopin Corporation (KOPN) http://www.kopin.com/ currently trading in the $4.41 range. KOPN is a heavily traded SmallCap. KOPN is approximately 75 cents off its 52-week high of $5.14 set on 10-14-09. KOPN posted a positive $0.23 diluted EPS on trailing twelve month revenues of $110 million and considering it has a $3.50 floor, a September-October rise to $5 and is on the upside of a 'V' dip from $4 headed back to $5, this is a 'Buy' stock for me. And I'm not alone... Today, Needham initiated coverage of KOPN with a 'Buy'.
The Needham recommendation comes on the heels of KOPN releasing its Q3 2009 earnings on November 2. KOPN net income was $8.5 million or $0.13 per diluted share, compared with net income of $1.5 million, or $0.02 per diluted share for Q3 2008.
For the nine months ended September 26, 2009, KOPN reported net income of $14.1 million or $0.21 per diluted share, compared with net income of $0.8 million, or $0.01 per diluted share for the nine months ended September 27, 2008.
"Strong demand for our proprietary military displays and III-V products were key catalysts that drove our outstanding performance in the third quarter," said Dr. John C.C. Fan, KOPN's president and CEO.
Total revenues for KOPN during Q3 09 increased 4% to $32.0 million compared with $30.7 million in Q3 08 and increased 13% from $28.2 million from the sequential Q2 09.
"Military display revenues increased 26% on a year-over-year basis in the third quarter, driven by our participation as display supplier for the U.S. Army's Thermal Weapons Sight programs," added CEO fan. KOPN makes flat panel displays wireless handsets.
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