Happy New Year!
A Network, An Airline, A Pharmaceutical,
Three Value % Losers with Positive Earnings
BBND: Will Video Providers in All Media Buy New Gear in 2010?
RJET: Will Regional Passenger Airlines Pick Up the Slack in 2010?
QCOR: Will the FDA Keep the ‘Action Date’ of June 11, 2010?
Gaining 4% this morning is BigBand Networks Inc., (BBND) http://www.bigbandnet.com/ currently trading in the $3.41 range. BBND has a 3-Month average daily trading volume of 314,203 shares. BBND is now less than half of its 52-week high set on 04-03-09. The BBND stock price history for 52-weeks is -41.18%. Still, BBND returned a plus $0.03 trailing twelve month diluted EPS on $152 million in revenues. BBND is a near-term (3 Mo) ‘Watch Closely’ stock for me. BBND is at its 3-Month floor of $3.40 with strong support at $3.60. The 3-Month fall from the $4.20-40 range screams ‘Buy on the Dips’ for BBND.
BBND provides broadband service providers with innovative network solutions designed to make it easier to move, manage and monetize video across a wide range of services, including: digital TV, high definition TV, advanced advertising, video-on-demand, IPTV and interactive TV. BBND has more than 200 service providers in its client roster; including 7 of the 10 largest broadband service providers in the U.S. If the recovery is sustainable and people return to eating out and better video deals regardless of the method or medium, BBND could take off when its broadband clients upgrade to new gear.
And speaking of upgrades, on November 5, research house Argus upgraded BBND from a ‘Hold’ to an outright ‘Buy’ on the heels of poor numbers delivered on November in the BBND Q3 2009 earnings filing. BBND had a GAAP net loss of $10.9 million, or -$0.16 EPS. Y-O-Y, this compares to revenues of $48.3 million and GAAP net income of +$3.1 million, or +$0.05 diluted EPS reported in Q3 2008.
Said Amir Bassan-Eskenazi, president and CEO of BBND, “We won major new Switched Digital Video markets (in the quarter), which increased our coverage to more than 28 million homes.” He added, “... we believe operators are preparing to increase capital spending on video equipment in 2010.” I believe new, Top-Line sales will push BBND higher towards its former high.
BBND 1-Year BBND 3-Month
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Gaining 5.22% this morning is Republic Airways Holdings Inc., (RJET) http://www.republicairways.com/ currently trading in the $7.23 range. RJET has a 52-week high of $10.94 set on 01-08-09. RJET is a heavily traded SmallCap. With a 52-week drop in value of -30.82%, RJET managed to return a positive diluted EPS of $1.12 on $1.34 billion in revenues.
Of the nearly 34 million shares in the public float, over 90% are owned by institutions. That’s significant because of price support at certain multiples and certain value levels. RJET has a 3-Month $7 floor with strong support at $7.50 and two months ago was showing support at $8. RJET is a near-term ‘Watch Closely’ stock for me. Regional airline ‘plays’ always pose a volatile risk/reward potential because they are capital intensive, but when they do take off (you’ll forgive the pun) there’s money to be made.
RJET provides scheduled passenger, charter and air freight services on approximately 1,250 flights daily to 109 cities in 35 states, Canada, Mexico, and Jamaica. RJET operates a fleet of 221 aircraft. A solid recovery will see not only more diners and video requirements, but more air travelers.
RJET 3-Month QCOR 1-Year
Gaining 2.56% this morning is Questcor Pharmaceuticals Inc., (QCOR) http://www.questcor.com/ currently trading in the $4.81 range. QCOR is a very, very liquid stock with a 3-Month average daily trading volume of 686,784 shares. At this price, QCOR is half its 52-week high of $9.63 set on 01-02-09 on trailing twelve month revenues of $89 million. Though down in value by 50% from its 52-week high, QCOR did return a positive $0.51 diluted EPS in the trailing twelve months. Like RJET, QCOR enjoys a huge position of its 48 million share public float being owned by institutions (69%) and the Company insiders own another 25% (they have something to gain and lose by QCOR’s performance). QCOR is a near-term ‘Watch Closely’ stock for me. QCOR has been hovering between $4 and $5.50 for the last 3-Months and as the yearly chart shows, QCOR was once a $9+ then fell to $6 and wound up under $5. QCOR is a ‘Buy on the Dips’ candidate for me.
On 12-28-09, QCOR filed an 8-K basically saying, ‘the FDA now considers that the Company has provided a complete response to all prior action letters for its supplemental New Drug Application ("sNDA") to market H.P. Acthar Gel (repository corticotrophin injection) for the treatment of infantile spasms. The FDA has set the user fee goal date ("PDUFA") of June 11, 2010 for this sNDA’.
On December 24, when the news was made public before the 8-K, Analyst Yale Jen of Maxim Group said, “...there is a good likelihood that the outcome of the meeting will be positive and the panel would recommend an approval.” Acthar is currently approved to treat acute attacks of multiple sclerosis and QCOR is pursuing approval for the treatment of infantile spasms, a rare form of childhood epilepsy.
QCOR had two mis-filings and both the times the FDA declined to accept the filing, which was originally filed in 2006, requesting the company to submit additional data. “However, third time's a charm and today's announcement makes up for the lost territory in share price,” the analyst said.
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