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Some adverse unemployment figures yesterday were offset by a good response to an auction of seven-year notes that encouraged investors to buy government debt, trimming yields on the benchmark 10-year Treasury to 3.54 percent. More good news about a stabilizing market was demonstrated by investors who were covering some short positions and chasing off the bear that has dragged down indices in the last couple of weeks.
With broad-market sellers taking some profits from yesterday's gains, buyers continued to support some of yesterday's best performers in the Tech and Energy industries.
Prior to yesterday, when was there an IPO on the Nasdaq? Seems like a thousand years ago. But IPO Medidata Solutions (MDSO) http://www.mdsol.com trading on the Nasdaq in the $17 range displayed investor confidence yesterday. On its first day 'out-of-the-gate' MDSO had a trading volume of 5,593,000 shares.
MDSO began with 6,300,000 shares of common stock at $14.00 per share. Shares started trading at a price 25 percent above the IPO price and rose as high as 36% before ending the day at $17, up 21.4%. Not bad.
MDSO is a global provider of hosted clinical development solutions that enhance the efficiency of customers' clinical development processes and optimize their research and development investments. Medidata's diverse customer base spans pharmaceutical, biotechnology and medical device companies, academic institutions, CROs and other research organizations, and includes more than 20 of the top 25 global pharmaceutical companies.
A TWO DAY CHART ON MDSO
Holding its own as well today in early trading with a 32% run-up in price yesterday is Royal Energy Inc., (ROYL) http://www.royl.com/ trading on the Nasdaq in the mid-$2 range. The stock gained 32.55% yesterday, picking up 69 cents to close at $2.81. ROYL has an average 3-Month daily trading average of 82,718 shares with a market cap of $23.90 million.
The surge came on news that ROYL, expecting the typical summer demands for gas had started early and successfully perforated new zones in the Victor Ranch 9-16, 1-9, and Federal 3-2 wells (two of its properties). After 23 years of production, the addition of this previously untapped zone may lead to additional exploration opportunities in the area.
ROYL is an independent energy company and as of last December, operated 49 natural gas wells in California; owned an interest and operated 6 natural gas wells in Utah; and had non-operating interests in 17 oil and gas wells in Texas, 3 in Oklahoma, 1 in California, and 2 in Louisiana.
At $2+, ROYL is only slightly ahead of its 52-week low of $1.38 set on 03-09-09 and is well off its 52-week high of $13.60 set on 06-27-08. In the current price range, it is at both its 50-day and 200-day moving averages. ROYL has trailing twelve month revenues of $18.45 million and its shares out versus float ratio are close enough to parity to allay any stability questions.
A FIVE DAY CHART OF ROYL
A Small-Cap company with sustainable Mid-Cap operations is PH Glatfelter Co., (GLT) http://www.glatfelter.com/ trading on the NYSE in the $8 range with a 3-Month average daily trading volume of 331,346 shares on a market cap of $376 million.
GLT just declared a $0.09 per share cash dividend on its outstanding common stock and that sent the share value up. Any company giving cash to its shareholders these days is well loved and respected.
GLT is a global manufacturer of specialty papers and engineered products, offering over a century of experience, technical expertise and world-class service. U.S. operations include facilities in Spring Grove, PA and Chillicothe and Fremont, OH. International operations include facilities in Germany, France, the United Kingdom and the Philippines and a representative office in China. Glatfelter's sales exceed $1 billion annually.
I also like GLT's diversity in product-lines: food and beverage paper used for tea bags and coffee pods/pads and filters; composite laminate papers used in production of decorative laminates for furniture and flooring; and metallized products used in the labeling of beer bottles, inner liners, gift wrap, self-adhesive labels, and other consumer products applications, as well as a line of paper products used in batteries, medical masks, and other engineered applications. Lots of eggs in different baskets.
At $8, GLT is near-half its 52-week high of $15.76 set on 08-06-08 and near-double its 52-week low of $4.57 set on 03-09-09. Also at $8, GLT is slightly below its 50-day moving average and slightly above its 200-day moving average. GLT has trailing twelve month revenues of $1.26 billion and its shares out versus float is at parity (within a million).
Finally, for contrarian investors who invest when numbers are poor but enthusiasm high, PALM Inc., (PALM) http://www.palm.com/jumped past an 11% gain today to the mid-$15 range on the Nasdaq surpassing its average 3-Month daily trading volume of 9,857,400 shares by several million shares in early trading today.
In pre-market trading, the shares were up $1.73, or 12.3 percent, to $15.75, poising them to hit their highest level in regular trading since October 2007.
Late yesterday, the Sunnyvale, Calif.-based company posted a loss of $105 million, or 78 cents per share, for the fiscal fourth quarter ended May 29. That compares with a loss of $43.4 million, or 40 cents per share, in the same period a year earlier.
But o' contraire, PALM hasn't experienced so much product excitement since it was the very first hand-held information device way back in the 90s. The company is banking on the Palm 'Pre' to revive its once-dominant smart-phone franchise. So far, all signs point to a strong launch for the Pre, fueling the company's shares to a 52-week high last week.
"The launch of Palm webOS and Palm 'Pre' was a major milestone in Palm's transformation; we have now officially reentered the race," said Jon Rubinstein, the executive chairman who took over as chief executive this month.
The quarter included early shipments of the Pre, the first phone featuring the webOS operating system, which is meant to be the basis for a whole new line of phones. The Pre went on sale through Sprint Nextel Corp. on June 6. Palm did not say how many Pres it shipped, but analyst Jonathan Goldberg at Deutsche Bank estimated the number at 73,000, based on the earnings figures. That was better than he expected.
At $15, PALM is at its 52-week high and well above its 52-week low of $1.14 set on 12-02-08. Shares are well ahead of both its 50-day and 200-day moving average. Shares out vs. float are near-parity.
