Finding Ways to Increase Shareholder Value: ASFN, ZN, VVUS

Trends, Charts and Exclusive Opinion

Three SmallCaps Find Ways to Increase Value

ASFN: Two Board Members Resign

ZN: Shareholders of Record Get a Nice Perk

VVUS: Lots of Phase II and III Candidates

First up this morning is Atlantic Southern Financial Group Inc., (ASFN) http://www.atlanticsouthernbank.com/ currently trading in the $3.43 range on a light 3-Month average trading volume. ASFN was trading in $4 range a year ago. The stock jumped in June of 09 to the $7 level and then began a long, slow, steady retreat to $1 in Nov. ASFN flattened out between $1 and $2 for the next 10-weeks and then rallied to $4 in Feb. ASFN could not hold that level and receded back towards $1 earlier this month. On good news, ASFN has moved towards $4 in the last few days. ASFN has a 52-week high of $7.58 set on 06-15-09.   

The good news mentioned above for ASFN came in two parts. The first was on April 4 when the Federal Reserve Bank of Atlanta and Georgia’s banking commissioner took ASFN under their wing for ‘oversight’. The ‘deal’ restricted ASFN from paying dividends, buying or redeeming shares of its stock or accruing additional debt without prior consent of the Federal Reserve Bank of Atlanta and banking commissioner of Georgia. ASFN has must report every 60 days and submit a plan showing how it will maintain sufficient capital and cannot give any of its officers bonuses or raises without the OK from the Federal Reserve Bank of Atlanta or banking commissioner. ASFN also has to provide written progress reports within 30 days after the end of each quarter.

The second part happened last week when two ASFN board members resigned. Both of these events are good news for shareholders. Oversight and fresh blood on the board. ASFN has 15 branches and $930.4 million in deposits. When local and regional banks are seemingly ‘forced’ to ‘get their house in order’ it’s always good for the shareholders. True value seems to reappear in the quation. In its current range, ASFN is a long-term (1 Yr) ‘Buy’ consideration for me.

ASFN 1-Year

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Next up this morning is Zion Oil & Gas Inc., (ZN) http://www.zionoil.com/ currently trading in the $6.73 range on a 3-Month average daily trading volume of 115,181 shares. ZN was trading in the $10 range a year ago. ZN had a very choppy 2009 with some ‘extreme’ dips and spikes, somewhat leveling out in autumn at $10, then nose-diving in mid-Oct to $7. ZN dipped to $5 in early-Feb and has traded between $5 and $6 this month. ZN has a 52-week high of $14.61 set on 06-26-09. ZN holds 2 exploration licenses, Asher-Menashe License and Joseph License, covering approximately 162,100 acres onshore in the state of Israel between Netanya in the south and Haifa in the north. That is the value here. At less than half of its 52-week high, ZN is a short-term (6 Mo) ‘Buy’ consideration for me. Here’s why: at some point in the next 6-Months ZN has to drop some new wells or make a deal with a 3^rd party to drill or start selling off parcels (that’s a lot of land). Actually beginning the process of producing oil would be a big boost to share value. If they just ‘sit’ on the land, they might as well start raising cattle or putting up wind farms.  

This week ZN announced today it will be launching a rights offering. Holders of ZN common stock will be entitled to purchase additional shares of its common stock at a price of $5.00 per share. In the rights offering, stockholders as of 5:00 p.m., Eastern Daylight time on the record date of May 6, 2010, will be issued, at no charge, one-half (0.5) of a non-transferable subscription right for each share of common stock owned by the stockholder on the Record Date. This is equivalent to one (1) subscription right for every two (2) shares of common stock held by the stockholder on the Record Date. The rights offering will be conducted under an existing effective shelf registration statement.

ZN plans to use the proceeds from the rights offering: (a) to purchase a 51% interest in a new company (Zion Drilling, Inc. that will own a 2,000 horsepower drilling rig), and (b) to drill further 'deep' exploration wells on Zion's licenses in Israel (in continuation of Zion's oil and gas exploration efforts) and (c) for general corporate purposes.

ZN 1-Year

Finally this morning is VIVUS Inc., (VVUS) http://www.vivus.com/ currently trading in the $9.56 range. VVUS was trading under $4 a year ago and began anascent in late June of 09. VVUS climbed to $7, seemed to flatten out, and then skyrocketed towards $12. VVUS eventually fell back into the $7 level in Nov and then set an $8 floor; often cresting into the $9 range. VVUS has a 52-week high of $12.88 set on 09-10-09 with current twelve month revenues of $50+ million. Those revenues are very good for a pharma-development company. VVUS is a long-term ‘Buy’ consideration based on its pipeline.     

VVUS has a drug candidate named Qnexa and the company will present its data and affects of the drug at the American Society of Hypertension 25th Annual Scientific Meeting and Exposition in New York, NY. The VVUS product pipeline includes: Qnexa that has completed Phase III clinical trials for obesity, and Phase II clinical trials for diabetes and obstructive sleep apnea; Avanafil, which is in Phase III clinical trials to treat erectile dysfunction; and Luramist, which has completed Phase II clinical trials for the treatment of hypoactive sexual desire disorder in women. When one of these late stage trails goes to the FDA for approval (and gets it); VVUS will easily re-find the $12.88 high.

Please note that on Monday, May 3, 2010 VVUS will report its Q1 Earnings after the market closes. 

 VVUS 1-Year

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