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Bears, bears... Bears everywhere! But Durable Goods orders are up! Doesn't matter. The markets seem to be in a self-correcting mood. However, here are three SmallCap stocks to give hope to the bulls.
ANIK: A 17% Gain in Q3 Revenues.
PEET: A Significant Upgrade, New Guidance and a 52-Week High.
MTXX: A Controversy Tied to a Threshold Play at $5
Gaining as much as 16.5% this morning is Anika Therapeutics, (ANIK) http://www.anikatherapeutics.com/ which handily surpassed its 3-Month average daily trading volume in the first hour of today's session. ANIK is currently trading in the $7.23 range.
Yesterday after market, ANIK released its Q3 2009 numbers and they were spectacular. Net income up 37% from 08. Total Revenue up 17%. Product Revenue up 18%. Plus ANIK launched its Monovisc product in Canada and launched its Hydrelle product in the U.S. during Q3.
The ANIK product revenues for the first nine months of 2009 grew 11% to $27,377,000 from $24,770,000 in the first nine months of 2008. ANIK's product gross margin increased 6% since Q3 08. Even though SG&A and clinical costs were slightly up,
Net Income for Q3 09 grew 37% or $0.13 per diluted share. Net income for the first nine months of 2009 increased 18% to $2,990,000, or $0.26 per diluted share.
Charles Sherwood, Ph.D., ANIK's president and CEO noted, "Our joint health franchise continues to be the key driver of Anika's growth, with revenue from that franchise up 31% year over year. Domestically, we recorded very strong ORTHOVISC sales, continuing to grow our share of that market. We expect to increase our U.S. market share to about 12% by the end of 2009."
What more could a shareholder want? ANIK has the top-line ability to generate cash from existing products and continually to increase its market share while introducing new products globally. At $7.23, this is a 'Buy' for me. ANIK has a 52-week high of $8.80 set on 09-20-09. With this sort of push by management, cash in the bank and a very manageable debt load, I think ANIK can top its 52-week high in the near-term. I also like the fact management was able to deliver trailing twelve month revenues of $0.32 during the worst period of the 'great recession'.
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ANIK
A 52-Week High for PEET
Gaining 4% this morning is Peet's Coffee & Tea Inc., (PEET) http://www.peets.com/, an S&P SmallCap 600 company. PEET is a little pricey at its current $31.95 per share, but it does have room to move up. The chart shows a nice climb from the $26 level in September. Based on its Q3 2009 numbers just released and management's 'new' FY 2009 guidance, I believe the stock will hit $35 in the near-term. I've been a patron of PEET coffee my whole life and I'll paraphrase Buffet; 'Buy what you use and like'.
PEET got a significant upgrade today from research house Stifel Nicolaus from a 'Hold' to a 'Buy' and the importance comes from the fact that PEET has had no new coverage since January. Analysts are once again paying attention.
PEET passed its 52-week high of $30.42 this morning and like I said of the previous stock, I like companies that delivered earnings during the last calendar year and PEET posted a diluted EPS of $0.93 on $293 million in trailing twelve month revenues.
Yesterday, management announced after the market, PEET earned $2.5 million or $0.19 EPS in Q3. That's up from Q3 08 and its revenues rose 8% year-over-year as well. The figures beat all the analyst's estimates.
GUIDANCE
PEET CEO Patrick O'Dea said he was pleased with the (Q3) quarterly results, crediting a new delivery system, new roasting plant and its store base. He said the company is also looking to grow in other areas, such as its national launch of Godiva flavored coffees and he offered guidance for FY 2009:
For the FY 2009, PEET will show a profit of $1.04-$1.06 per share, up from an earlier prediction of $0.97-$1 per share. New 2010 profit expectations were given of $1.24 to $1.30 per share on 8%-12% growth in revenues. That's a 'Buy' signal for me. I also like the fact that PEET opens new stores; but not to fast. They keep manageable debt levels and their coffee is overpriced at the cash register. PEET operates 188 retail stores in California, Colorado, Illinois, Oregon, Massachusetts, and Washington.
PEET MTXX
Controversy and a Threshold Play at $5
Gaining 2% this morning on its continuing momentum from Monday's Q3 release is Matrixx Initiatives Inc., (MTXX) http://www.matrixxinc.com/ currently trading in the $4.94 range. This stock is very heavily traded with a 3-Month average daily trading volume of 1,044,700 shares.
MTXX has a 52-week high of $19.74 set on 06-10-09. What's it doing at $4.94 four months later? On June 19, in a nutshell, MTXX received a letter of informal inquiry from the SEC that was sparked by lawyers intending to sue MTXX for clients who had lost nasal sensation after using certain MTXX 'Zicam' products. The stock plummeted. MTXX voluntarily recalled certain 'nasal' products and the fight goes on to this very day.
The chart shows that MTXX reached back to a $6.20 level in early September, but couldn't hold that as a rebound threshold. On trailing twelve month revenues of $110 million, MTXX released its Q2 2009 numbers on Monday. As you'd expect, they were affected by the controversy and the recall. Q2 revenue decreased 24%. But- Q2 income for the quarter was $5.1 million (compared to Q2 08 of $8.2 million) and diluted EPS for Q2 09 were $0.55 (compared to $0.86 for Q2 08).
The withdrawn Nasal Cold Remedy sales accounted for 51% of Cold Remedy unit sales in Q2 08. Partially offsetting the loss of nasal Cold Remedy sales was a 53% increase in oral Cold Remedy unit sales during Q2 09 over Q2 08.
Bill Hemelt, President and Chief Executive Officer, said, "Although the absence products from the market has reduced our level of sales, we are encouraged by the growth of our oral Cold Remedy products." Mr. Hemelt also gave an encouraging word to shareholders now that the cold and flu season is upon us all: "In addition, we are finalizing new creative messaging and will be running new advertising in early November."
In the near-term, I believe MTXX can hold a $5 level. I think its oral sales will climb and the 'new messaging' is critical to restoring product confidence. I also think shareholder support could rally around the $5 figure. MTXX said Monday that, "...due to increased marketing between November and March and higher legal expense, the Company expects to incur a net loss in the second half of fiscal 2010."
(Because zinc products fall under the FDA's homeopathic division, they do not require pre-market approval, they are not regulated and are exempt from government standards regarding safety and testing)
I'm not a lawyer, but I know legal cases can drag on for years before they are tried and settled out of court. I think MTXX management wants to increase top-line revenues and in lieu of any more bad news; will. I can't say buy or sell or hold to this stock. MTXX was at one time, the darling of investors. I do believe it's a 'Watch Closely' for any new investor that wants to understand how fortunes are won, lost and potentially made again.
If you'd like to know of any changes in our opinion of ANIK, PEET or MTXX,
(or if SCN officially recommends them as trades)
