Thursday, April 29, 2010

Dendreon Gets FDA Approval Update 3.0!

What a ride it's been. The stock is still held, and there are no indications where it might open yet, but it was up about 6 bucks before being halted.. Hold on to your socks.

So Provenge is approved for men with asymptomatic and minimally symptomatic prostate cancer. That's huge, as the second group is the large group.

On the conference call and this is what we're hearing:
*) No ROW partner yet, but the company will focus on that now.
*) Demand will swamp supply in the first year.
*) Full treatment will cost $93,000.
*) Plans to start treating 2,000 patients right away supplied by New Jersey facility.
*) Expects $1 billion in annual revenues after facilities come on line in mid 2011 and as much as $2.5 billion the year after that.

So, looking at a minimum of $180 million in revenues over next 12 months.

Stock re-opened at 53+. This is in line with where we thought it would trade, up about 15 points. Let's see where it goes from here. More to come on this.

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Tuesday, April 27, 2010

What A Day

We had a hard time catching a break today. Everything was caught in the down draft today, even good stories. Buying opportunities galore if this continues a few more days. Here's one good name we haven't talked about in a while, Verizon (NYSE:VZ). Under 29 again and yielding 6.5%. Gotta love that stock and one worth adding to the IRA.

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Monday, April 26, 2010

Enough With Greece UPDATED

The two main business networks have almost nothing else to talk about, that's clear. I'm tired of hearing about Greece. I actually feel sorry for Greece, as they are doing what the rest of us are doing, which is borrowing now and worrying about it later. There's little difference between their situation and the situation in Spain, Portugal, and yes, Britain.

Funny how 'they' haven't gotten around to the others yet. That says it all. The opportunistic traders can only focus on one short at a time. Give it a rest already.

Okay, so now they've gotten to Portugal and Spain. Let's see how far they take this. Let's see if they get to a country like Britain or the US and Japan for that matter. Why leave any of us out, as our balance sheets are almost as ugly. Yes, I know our economies are different, but that doesn't change the fact that we keep adding to the bill. This looks and feels a lot like what happened to the banks last year - get the 'talking heads' on your side, float rumors, send up the CDS', then take one down, then the next, and the next. The life of a short term, short trader.

What's going on over there has little to do with the recovery. Big week - Genworth (NYSE:GNW), Hartford (NYSE:HIG), Dow Chemical (NYSE:DOW), Cliffs (NYSE:CLF), Aflac (NYSE:AFL) and of course Dendreon (NASDAQ:DNDN). We've talked about all of these names and we expect good things, as these companies report earnings or significant news this week. Let the good times roll and forget about the side shows with Greece and Goldman. I'm still waiting on someone to tell me what Goldman or Greece has to do with the price of gold or oil or US equities.

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Thursday, April 22, 2010

Front Month Calls On Dendreon Look Suspicious

I think most observers believe Dendreon (NASDAQ:DNDN) is going to get approval for Provenge, but I'd beware swinging for the fence in May. Have a look at the May call options at 45, 50, and 55. There's a whole lot of them and they aren't cheap (neither are the way out of the money puts). We expect more shenanigans and the bears are shore to put pressure on the stock regardless of the FDA outcome. What we've seen over the past few years is when there's huge open interest at certain strike prices, the stocks have a hard time getting over that hump. Blame the SEC and the exchanges. It's just to easy to put pressure on a stock these days (flash trading, no real uptick rule, no enforcement of naked shorting, etc.).

The smart bet if you must buy the calls would be to allow an extra month. You're not paying that much more, but the extra month might mean the difference between zero and a fist full of c-notes.

We could see a scenario where DNDN gets approval, the stock shoots up 15 points, then closes even or up a point or two. Remember, the market isn't rational in the short or intermediate run and hasn't been for a few years now.

disclosure: long DNDN

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Tuesday, April 20, 2010

Apple Is King Of The Hill

Is there any doubt that Apple (NASDAQ:AAPL) is eating the competition's lunch? The only real threat comes from Google (NASDAQ:GOOG). By this time next year AAPL will have revenues that match or exceed those of Microsoft (NASDAQ:MSFT).

All the analyst say the market cap is too high, we say AAPL needs to buyback shares to rectify this. The analyst don't get it. AAPL is a different sort of company. There's no other company in the world with revenues as high as AAPL's that grows at high double digits.

Research In Motion (NASDAQ:RIMM) should take note. This is what they should have tried to be. Take that brand and that cult like following and build it into a diversified technology company. Too bad, too sad. AAPL's latest quarterly numbers provide more evidence for why removing RIMM from our favorite portfolio was the right thing. It's the slow march to and in to the sea for RIMM.

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Monday, April 19, 2010

These Are The Days

Nothing really surprising so far this earnings season. We got what we expected from GE and Citi. Next our attention is drawn to Hartford (NYSE:HIG), Genworth (NYSE:GNW) and Dow Chemical (NYSE:DOW), all names we've talked about and all names we've owned since the bottom last year. We expect very good things from these companies.

We also have our eyes on Dendreon (NASDAQ:DNDN) of course. 'May Day' is quickly approaching. The drama is about to come to an end, or probably some sort of bizarre end. We like buying some just for the run up to the announcement and selling before, but holding some long term, as this little company is destined to be a big company one day. Also, beware the crooks after the announcement. Take those stops off, so what might have happened to you last time, doesn't happen to you this time.

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Friday, April 16, 2010

Bears Got What They Wanted Today UPDATED

A big, ugly story on Friday, expiration Friday. I don't know why anyone would be surprised by the Goldman story. Bankers chase money. Bankers do what's in their own best interest. To suggest that this was one rogue employee is ridiculous. The guy was a VP at the time, not a MD and this was a large complex deal. He'd have to get sign off from someone over his head. So when GS finally pays up years from now, they'll owe what amounts to a drop in the bucket (remember BofA's deal after the Merrill disaster).

Let's see, someone approaches a bank and offers to pay that bank to do a deal where that customer gets to pick what goes into the CDO, then the CDO is sold while at the same time that customer makes bets that the CDO will fall in value. Knowing of course that it's all junk. I want that deal! Question, where were the rating agencies? It had to be rated.

In the long run GS will recover, but this may be just what the politicians need to move regulation forward. Things have been out of hand in banking for a while now. Conflicts of interests and greed run amok.

On the other hand, this presents a good opportunity to buy some other names like Citi, GE, and HIG on pull backs.

One more note, the sell off started before the GS news. This was just an excuse to sell today. The banks and funds that trade against you and me were up against it, as many stocks had run pretty hard in one direction into this expiration. Consider this, banks are making money trading, not making loans. They're trading against YOU, so they need volatility. I'll leave it at that.

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Friday, April 9, 2010

Random Thoughts On HIG And RIMM

I'm not one to buy in to your run of the mill conspiracy theory, but when I watch the daily action in a stock like Hartford (NYSE:HIG), I can't help but think all is not right. It almost never fails to behave erratically right before the expiration of options. At some point the short timers will grow tired of the stock and move on. The stock is trading at a discount to its peers, they've only had good news to report over the past nine months, and it's in our 2011 Model Portfolio! Anyway, we still think this is the most undervalued financial/insurance stocks around and worth buying down here.

As far as Research In Motion (NASDAQ:RIMM) goes, it's done. We've removed it from our model portfolio. In the long run, this company is going to burn out sooner than people think. Why oh why haven't they taken that brand and leveraged it into something other than phones. Without product diversification companies become obsolete. Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG), and probably Microsoft (NASDAQ:MSFT) are going to eventually devour this company if they don't evolve.

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Friday, April 2, 2010

2011 Model Portfolio Update March 2010


Here's the update on the portfolio we built on 26 March 2009 and the couple of weeks following. A few things to note again. We sold NYSE (NYSE:NYX) last year and we sold Sierra Wireless (NASDAQ:SWIR) this year. Both were sold for nice gains and although we didn't officially replace them with anything, we unofficially purchased GE and Citi, as some of you will recall.

Although we've done well thus far with this portfolio, to be honest, two of our biggest winners aren't included in this list, Cliffs (NYSE:CLF) and Genworth (NYSE:GNW). GNW was a generational buy at the time. A buck! Things were easy a year ago, as everyone seemed to misprice both credit and market risk.

The S&P returned 41% from 26 March 2009 to 31 March 2010 and our portfolio returned 114% over the same period for a 74% beat. Also, our portfolio isn't nearly as risky as some thought a year ago, so on a risk adjusted basis it did well in comparison.

Biggest disappointment is still Arch Coal (NYSE:ACI). Not sure what's going on and we thought about dumping it, but we still think coal is going to have it's day.

Also, we have nice yields on some of these picks like 7% on AFL and nearly 6% on DOW, but we didn't include that. One more note, we're thinking about dumping RIMM, as we feel their best days are behind them or right in front of them. Not sure why a company with such huge brand equity wouldn't leverage that into other products. Recall, Apple started out making just desktop computers and Microsoft started out just making software for PCs.

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The Vix

About This Blog

Where we rant and rave about the market and of course give our opinions on stocks we love or hate. We're not advisors and urge you to conduct your own due diligence.

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