Aug 27, 2010 10:04 AM PDT
CardioNet (BEAT) shares gained value today, even though recent bad news had pulled the stock down, and Flow International (FLOW) picked up steam as it announced it will hold a stock offering to raise cash. Medicines Company (MDCO) shares gained in early trading today as the Company was awarded a significant patent.
Good news this morning seemed to have produced little strength for the DOW bullish as the BigCap bulls and bears wrestled over who will win the day. SmallCap buyers appeared less focused on the indices themselves and took the good news, patched it together with single issue gains, and staged a rally.
The good news was from The Labor Dept. which today noted that worker productivity grew in August at the fastest pace in nearly six years. Labor costs fell to nine year lows. And good news from a private sector report said the U.S. lost fewer jobs in August (298,000) than in July (360,000).
Taking that good news and adding strong institutional support, CardioNet Inc., (BEAT) http://www.cardionet.com/ gained as much as 14.01% ($0.91) to set a new market cap of $177 million. BEAT is currently trading in the $7.44 range on the Nasdaq. BEAT has a 3-Month average daily trading volume of 1,900,940 shares and it had passed 2,159,914 shares traded by 11 a.m. EST.
BEAT shares fell yesterday as the Company confirmed one of its affiliated Medicare administrators, Highland Medicare Service, will cut the amount of money given to doctors who use BEAT products. Highland will cut 33% off the reimbursement rate to $754 per service from $1,123 per service (BEAT makes wireless heart monitoring devices).
And on Monday, the Law Offices of Howard G. Smith announced that a securities class action lawsuit has been filed on behalf of all persons or entities that purchased the common stock of BEAT between April 30, 2009 and June 30, 2009. The class action lawsuit was filed in the United States District Court for the Eastern District of Pennsylvania. The Complaint alleges that the defendants (BEAT) violated federal securities laws by issuing material misrepresentations to the market concerning business and prospects, thereby artificially inflating the price of BEAT securities.
Three other and separate legal firms at the end of August filed similar class actions against BEAT. How could BEAT survive such bad news within 10 calendar days and even post an impressive gain today?
Strong Institutional Support
I believe that BEAT, losing revenues and being sued by numerous law firms, could only make gains based on strong institutional support. Approximately 91.40% of BEAT shares are held by institutions. Whoever those institutions are; funds, banks, brokerages, they must feel confident about BEAT's ability to withstand the Medicare loss; and that BEAT can 'beat' the legal allegations. Institutions often support their ownership in a stock by purchasing shares in the public market to maintain a threshold in its trading price.
BEAT provides ambulatory, continuous, real-time outpatient management solutions for monitoring relevant and timely clinical information regarding an individual's health in the U.S. BEAT sells the Mobile Cardiac Outpatient Telemetry (MCOT) device, which incorporates a patient-worn sensor that communicates wirelessly with a compact monitor.
At $7.44, BEAT is below its 52-week high of $31.14 set on 09-02-08 and above its 52-week low of $5.60 set on 07-13-09. At $7.44, BEAT is ahead of its 50-day moving average and behind its 200-day moving average. BEAT has trailing twelve month revenues of $139 million and a trailing twelve month diluted EPS of $0.31. Its shares out versus float ratio is near-parity.
Gaining 11.90% ($0.25) today is Flow International Inc., (FLOW) http://www.flowcorp.com/ currently trading in the $2.33 range on the Nasdaq. FLOW has a new market cap of $87 million. FLOW has a 3-Month average daily trading volume of 160,483 shares and it topped 1,033,970 shares traded early today.
FLOW announced today it is publicly offering 7,825,000 shares at Tuesday's closing price of $2.10 per share. The company has approximately 37.8 million shares of common stock outstanding. FLOW management said the Company expects to raise approximately $16.4 million in gross proceeds.
FLOW also granted the underwriter an option to buy up to an additional 1,173,750 shares of common stock. Roth Capital Partners is the sole underwriter for the offering. Proceeds will be used to repay debt and for general corporate purposes. The offering is expected to close Sept. 8.
In another financing move...
Yesterday, FLOW announced that it has entered into an amendment to its existing $40 million, two-year revolving senior secured credit facility. The amendment revises the facility's quarterly financial covenants to provide terms that will give the Company additional flexibility starting in its first fiscal quarter (ended July 31, 2009) and throughout the remaining two years of the facility. The primary revision eliminates the covenant requiring FLOW to maintain a trailing four quarter adjusted EBITDA level of $8 million.
FLOW makes, sells and services ultrahigh-pressure waterjet technology. Its ultrahigh-pressure water pumps generate pressures from 40,000 to approximately 87,000 pounds per square inch, and power waterjet systems that are used to cut and clean materials, such as food and paper products, and steel and carbon fiber composites. FLOW has operations in North America, Europe, South America, and the Asia-Pacific.
At $2.33, FLOW is beneath its 52-week high of $7.03 set on 09-02-08 and above its 52-week low of $1.05 set on 03-09-09. At $2.33, FLOW is ahead of both its 50-day and 200-day moving averages. FLOW has trailing twelve month revenues of $210 million. FLOW is widely held by institutions. Its shares out versus float ratio is near-parity.
Gaining 7.63% ($0.60) today is Medicines Company (MDCO) http://www.themedicinescompany.com/ currently trading in $8.46 range on the Nasdaq. MDCO has a new cap of $446 million. MDCO has a 3-Month average daily trading volume of 604,806 shares traded and it surpassed that by mid-session.
MDCO announced today the United States Patent and Trademark Office issued a new U.S. patent No. 7,582,727 ('727 patent). The '727 patent relates to a more consistent and improved Angiomax drug product (a primary product of MDCO).
Angiomax is already protected under U.S. patent No. 5,196,404 ('404 patent), which covers the composition of matter of bivalirudin. The '404 patent expires on March 23, 2010. Also, Angiomax has been awarded pediatric exclusivity, which expires on September 23, 2010.
On Monday, MDCO publicly noted a Horizons-AMI study that showed Angiomax reduced cardiac-related death by 43%, improved overall survival by 27% and reduced major bleeding complications by 39%, compared to the standard of care. Angiomax showed an absolute reduction of 1.7% in cardiac-related death.
MDCO provides medicines for the treatment of critical care patients worldwide. It markets Angiomax, an intravenous direct thrombin inhibitor for use as an anticoagulant in combination with aspirin in patients with unstable angina undergoing percutaneous transluminal coronary angioplasty; and Cleviprex, a dihydropyridine calcium channel blocker, for the control of high blood pressure.
At $8.46, MDCO is below its 52-week high of $28 set on 09-19-08 and above its 52-week low of $6.15 set on 05-13-09. At $8.46, MDCO is ahead of its 50-day moving average and behind its 200-day moving average. MDCO has trailing twelve month revenues of $385 million. MDCO is widely held by institutions. Its shares out versus float ratio is near-parity.
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