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A Bidding Competition, an Opportunity on the Dips,
A 52 Week High and Feeding the Chinese
Eagle Rock Energy Partners, L.P., (EROC) http://www.eaglerockenergy.com/ has become the darling of its suitors in the last few months who are seeking to buy it minerals business. EROC picked up 6.25% today to push it into the $4.88 range on news it had found a match. An upsurge in trading volume followed.
A Friendly Bidding War
EROC wants to raise cash and get out of the minerals business to dedicate its efforts on its primary business: natural gas. It put the word out and Natural Gas Partners VII LP initially offered $135 million. After discussions, NGP added $10 million last month to sweeten the deal. NGP owns a chunk of EROC Holdings and it was after a greater stake. The revised proposal seemed to be the ticket until a non-binding proposal from Black Stone Minerals Company, was received by EROC management offering $157.5 million. That was the news today that bumped EROC into plus territory. No official word from NGP or EROC's intention, but a $12.5 million jump in the offering price had to certainly be welcome news to the sellers.
EROC treats, processes, transports and sells natural gas in Texas, Louisiana and Alabama. I like EROC based on its price/trailing twelve month revenues $4.88/$1.21 billion. Also, during the 'Great Recession' EROC managed to post a trailing twelve month diluted EPS of $3.56. Management here is certainly earning its compensation.
By being patient and waiting, the price of its minerals business has gained $22.5 million in value. With EROC stock now selling at half of its 52-week high of $10.65 set on 11-03-08 and fresh cash headed for its book, I think this is a definite BUY.
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EROC GERN
Geron Corporation (GERN) http://www.geron.com/ picked up over 8% today to place in the $6.96 range off an upgrade from research house Merriman. GERN went from 'Neutral' to 'BUY' at Merriman. GERN is a heavily traded SmallCap and I think for aggregators and new investors, there is an opportunity here to follow the old axiom and literally 'Buy on the Dips'. If you look at the chart below, You'll see GERN was trading in the $9 range at the end of July. At the current price, I think this could be the window to buy before this Bio-Pharma starts reporting on the progress of its drug trials and its price tops $10 and sets a new floor.
GERN develops therapeutic products for the treatment of cancer and chronic degenerative diseases, including spinal cord injury, heart failure, and diabetes. GERN develops a range of anti-cancer therapies, including anti-cancer therapies based on telomerase inhibitors and telomerase therapeutic vaccines, as well as focuses on the development of products using telomerase as a marker for cancer diagnosis, prognosis, patient monitoring, and screening. GERN has products in Phase I and Phase II trails and a deal with Merck for marketing and commercialization.
GIVN Sets a 52-Week High Today
Speaking of the FDA approving drugs and devices and stocks benefiting, a 5% value gain today by Given Imaging Ltd., (GIVN) http://www.givenimaging.com/ pushed it over its old 52-week high of $16 set on Friday (10-16-09) into its current $16.60 range. GIVN was trading over seven times its average daily 3-Month volume by mid-session.
The FDA gave an okay to GIVN for its PillCam SB capsule endoscopy to be used in patients two years old and above. The age limit had previously been 10 years old and older.
Two Testimonials
"Young children who present with Gastro-Intestinal (GI) issues are often our most challenging cases since many of them must undergo several diagnostic procedures, often without a definite diagnosis," said A. Fritscher-Ravens, Department of Interdisciplinary Endoscopy, University Hospital Kiel, Germany.
"Research shows that small bowel capsule endoscopy helps improve outcomes and enable better medical decisions through more effective diagnosis of pediatric patients' gastrointestinal issues," said Stanley Cohen, M.D., of the Children's Center for Digestive Healthcare in Atlanta, Georgia.
A Wireless Imaging System
PillCam capsule endoscopes are ingestible video capsules that enable physicians to visualize distinct portions of the GI tract. Patient friendly in nature, PillCam endoscopy typically is used on an outpatient basis and has been clinically validated, as evidenced by more than 1,000 peer-reviewed publications. To date, more than 1,000,000 patients worldwide have benefited from the GIVN PillCam capsule endoscopy.
Is it worth an investment?
Q2 2009 revenues increased 9% to a record-setting $36 Million with a 75% increase in GAPP Q2 09 EPS to $0.16. Q2 09 gross margins increased 76.1%. GIVN posted $131 million in trailing twelve month revenues and a trailing twelve month diluted EPS of $0.17. Is it worth an investment? Yes.
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GIVN SEED
I also like Origin Agritech LTD., (SEED) http://www.originagritech.com/ because its business is growing food and feeding the people of China. It had a 5% jump in value in early trading today with no official news. Now in the $5.26 range, it is approximately a dollar twenty off its 52-week high. SEED is based in China and sells in China. I like that. I also like the fact that in mid-September, SEED acquired the worldwide rights to a new seed gene for corn, soybean, rice, cotton and canola plants that is highly resistant to glyphosate, a type of weedkiller. SEED stock jumped 20% on the news. I also like that SEED Q3 2009 EPS were $0.48 on $69 million in revenues. If you've been thinking of adding a Chinese stock to your portfolio, then SEED certainly belongs on your 'Watch' list.
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