Up-Trend Outlook: RCRC, ANAD, DEPO, MOVE

Mixed earnings reports from the BigCaps, some good and some disappointing, enticed more bulls than bears into trading today and RCRC, ANAD, DEPO and MOVE gain in value and the four could trend upward in the near-term, but will they?

The Watch List

Gaining over 15% this morning on Top-line and Bottom-Line news is S&P SmallCap 600 company RC2 Corp., (RCRC) http://www.rc2corp.com/ now trading in the $16.15 range. RCRC is approximately $1.57 off its 52-week high set on 07-27-09 and today's gain has 'nudged' the stock closer, but I'm not completely convinced it can set a new high and establish a threshold above $17.72. This is a 'Watch' stock for me as its current earnings release is Very Good, but its coming off of a trailing twelve month diluted EPS loss of $11.38 on trailing twelve month revenues of $427.85 million. It was a very difficult year for RCRC shareholders; but now, it's posting some very promising Q3 numbers.  

RCRC is a toy designer and marketer and with good Q3 numbers and the holidays looming right ahead, this could be a near-term buy depending on RCRC holiday positioning, market-share and what consumers bring to the equation.

RCRC had a Q3 2009 rise in profits of 22.4% to $13.6 million and a 4.8% sales decline. RCRC management made bottom-line cost cuts to achieve a balance. RCRC raised its full-year profit outlook. Net income for Q3 09 was 66 cents a share, compared to a profit of $11.1 million, or 64 cents a share, a year earlier. Revenue in the July-September quarter fell to $126.5 million from $132.9 million a year earlier. RCRC posted SGA (selling, general and administrative) expenses fell to $36.9 million or 29.1% of net sales, in Q3 09 compared with $41.0 million, or 30.9% of net sales, in Q3 08.

Looking at the whole year of 2009, RCRC management forecasts net income will be higher than the $23.5 million reflected in its previous guidance and will range from roughly $25 million to $27 million, or $1.30-$1.40 per fully diluted share.  

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Gaining over 5% this morning is Anadigics, Inc., (ANAD) http://www.anadigics.com/ now trading in the $4.39 range. This is approximately 82 cents off its 52-week high. ANAD is a very heavily traded stock and the support could be there to set $5 as its floor.

ANAD picked up research house coverage yesterday with Northland Securities initiating a 'Market Perform' rating. ANAD is executing a growth strategy, opening an office in Tokyo, Japan, which according to the new Country Manager, "...has a rich history of wireless and broadband innovation." Agreed, but will ANAD stock jump in the near-term towards that $5 level? With no new sales deals released by the company, 'believers' will have to push this stock or its Q3 2009 revenues and earnings news on October 27, after the market close, will have to give it support to reach $5. This is a 'Watch' for me.

RCRC                                                              ANAD

Also on my watch list is DepoMed Inc., (DEPO) http://www.depomedinc.com/ which gained 6% this morning. Now trading in the $3.55 range, DEPO fell from its 10-09-09 high of $6.40 on a sour note about its Phase III clinical trails of its drug Serada. This stock has huge support for a SmallCap with a 3-Month average daily trading volume of 723,379 shares.

Now to make matters better, research house Caris & Company initiated coverage today with a 'BUY'. This softens the 10-08 blow of DEPO drug Serada (DM-5689) missing most of its key goals after 12 weeks of testing Serada. Management at DEPO is considering a potential approval path for the menopausal hot-flash treatment product with U.S. regulators.

Serada is an extended release version of the drug gabapentin, which is used to treat epilepsy and pain disorders. DEPO recently reported results from a successful late-stage study of extended-release gabapentin as a treatment for pain caused by the viral infection shingles. Serada may have multiple applications in various forms. That's promising, so I put it on my 'Watch Closely' list. Let's see what management develops to utilize the drug.

With an impressive drug pipeline, DEPO can get back to that $6.40 range, but it will take some time, near-term time. In the DEPO product line is GLUMETZA for the treatment of type 2 diabetes and Proquin XR for treatment of uncomplicated urinary tract infection. Also under development at DEPO is DM-1796, a Phase III clinical trial product for the treatment of postherpetic neuralgia, a Phase II clinical trail for diabetic peripheral neuropathy; DM-3458, a Phase I clinical trial product for the treatment of gastroesophageal reflux disease; and DM-1992, a Phase I clinical trial product that targets Parkinson's disease.

DEPO                                                              MOVE

Finally on my watch list today is Move, Inc., (MOVE) http://www.move.com/ which gained 6% this morning to reach the $2.76 range. MOVE is approximately 42 cents off its 52-week high set on September 18, 2009. MOVE is also a heavily traded stock. MOVE has trailing twelve month revenues of $228 million. MOVE is a smart, Internet-based Real Estate Services company. MOVE is going to issue Q3 2009 earnings on November 5, after the market and what I'm watching for is some top-line indicators like sales or alliance-marketing endeavors before the Q3 news.    

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