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While the broad market was flat at the open and buyers and sellers were looking for any news to lean one way or the other, SmallCaps buyers supported NewStar (NEWS) Perry Ellis (PERY) and Anadys Pharmaceuticals (ANDS); all of which posted early-session gains.
Gaining 13.15% ($2.28) in early trading, NewStar Financial Inc., (NEWS) http://www.newstarfin.com/ set a new market cap of $117 million. NEWS is currently trading in the $2.49 range on the Nasdaq. NEWS has a 3-Month average daily trading volume of 139,569 shares and had traded more than half that number by 11 a.m. EST.
NEWS announced this morning that it had terminated its agreement to acquire Southern Commerce Bank as it had become apparent that NEWS would not be approved on the terms it wanted. So, NEWS backed out.
Management at NEWS said the company will look at other alternatives for securing a commercial bank. When NEWS does acquire a bank, they will meet the policy guidelines of federal banking regulators. Owning a bank will help NEWS better operate and control its vast loan portfolio and debt financing solutions to middle-market businesses.
NEWS management also said that apart from depository-based strategy options, it will continue to pursue alternatives to finance its operations and manage its core business with a focus on maximizing liquidity, managing the company's credit portfolio and taking appropriate steps to protect the balance sheet.
NEWS investors and new buyers today liked the fact that the company didn't panic and 'just take the deal at hand' but decided to back out and wait for a better opportunity.
NEWS provides senior secured debt financing for the acquisition or recapitalization of mid-sized companies and commercial real estate. NEWS originates loans directly and the Company targets 'hold' positions of up to $20 million and selectively underwrites or arranges larger transactions for syndication to other lenders.
At $2.49, NEWS is below its 52-week high of $9.78 set on 09-10-08 and is above its 52-week low of $0.61 set on 03-09-09. At $2.49, NEWS is pennies above both its 50-day and 200-day moving averages. NEWS is widely held by insiders and institutions. I would like to see more shares in the public float for stability.
Also posting a nice gain this morning of 8.63% ($0.77) on Second Quarter 2009 news is Perry Ellis International Inc., (PERY) http://www.perryelliscorporate.com/ which has a new market cap of $150 million. PERY is currently trading in the $9.62 range on the Nasdaq. PERY has a 3-Month average daily trading volume of 152,935 shares and was closing in on that figure by mid-session.
PERY lost money in Q2 09, but not as much as analysts had expected and the guidance given by PERY management for 2010 included better earnings, but lower revenues which suggests a bottom-line tightening of costs. PERY stated a 22% drop in inventories for Q2.
For Q2 09, PERY lost $0.42 a share (analysts were looking for a 54 cent loss). PERY revenues for Q2 were $159 million (analysts were looking for 172 million). From a 2010 fiscal year point of view, PERY expects an EPS of 70-85 cents.
PERY makes, sells and licenses apparel products for men and women in the U.S. and internationally. PERY has lots of licensing deals with everyone from Nike to the PGA. PERY operates 46 Perry Ellis retail outlet stores located primarily in upscale retail outlet malls in the U.S. and owns six Original Penguin retail stores located in upscale demographic markets.
At $9.62, PERY is far below its 52-week high of $24.73 set on 08-19-08 and is well above its 52-week low of $3.31 set on 03-30-09. At $9.62, PERY is above both its 50-day and 200-day moving averages. PERY has trailing twelve month revenues of $827 million. PERY is widely held by institutions. Its float is two-thirds its shares outstanding, but that isn't a red flag.
Finally, posting a healthy gain of 7.59% ($0.17) today on continuing investor enthusiasm is Anadys Pharmaceuticals Inc., (ANDS) http://www.anadyspharma.com/ which is currently trading in the $2.41 range on the Nasdaq. ANDS has a new market cap today of $89 million. ANDS has a 3-Month average daily trading volume of 1,230,830 shares and it had topped half of that number by mid-session.
On August 11, ANDS said its hepatitis C drug candidate showed promise in a small early stage study. Because the ANDS drug is the only immunomodulator in development for Hep-C, ANDS is expected to look to other better financed hepatitis C drug makers like Roche (ROG) and Schering-Plough (SGP) to find a trail and commercialization partner.
The ANDS drug can help achieve the elimination of interferon. The ANDS drug uses a more direct approach than interferon-based therapies by targeting the hepatitis C virus, while interferon, which is the current standard of care treatment for hepatitis C, works by modifying the immune system.
ANDS also received an upgrade on August 11 from ThinkEquity from 'accumulate' to 'buy' and while ANDS soared 28% that day, it has steadily climbed on the expectation that will partner with a BigCap for development of its Hep-C drug.
At $2.41, ANDS is below its 52-week high of $8.43 set on 02-20-09 and is above its 52-week low of $1.44 set on 07-08-09. At $2.41, ANDS is above its 50-day moving average and below its 200-day moving average. Its shares out versus float ratio is near-parity.
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