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Saturday, May 30, 2009

ASCO Update: Long Term Results of Oncothyreon's (ONTY) Stimuvax Look Promising

Oncothyreon (ONTY) Rising
ONTY Could be the Next DNDN

Oncothyreon's stock has been on the rise for months now, and Saturday's press releases, one each by Oncothyreon and Merck KGaA, gave us some insight as to why.

The press releases coincided with a presentation at the American Society of Clinical Oncology (ASCO) Annual Meeting where representatives of Oncothyreon provided updates on three of the company's pipeline candidates, most notably Stimuvax.

Stimuvax is Oncothyreon's experimental vaccine that induces the body's own immune system to attack cancerous cells and is currently being tested by Merck KGaA in a worldwide Phase III trial. In 2007, Merck assumed responsibility for all future development of Stimuvax in a licensing agreement that will pay Oncothyreon various milestone payments and a percentage of net sales, should the vaccine make it to market.

The Stimuvax portion of the ASCO presentation regarded long term safety and survivability data collected from patients who took part in the already completed Phase IIb trial. As expected, if you use the rising stock price as an indicator, the results were positive.

Long term side effects experienced by patients receiving Stimuvax were minor, especially when compared to chemotherapy treatments. Even more encouraging, Stimuvax was keeping patients alive for over a year longer, on average, than those who did not receive the treatment. In cancer years, that is a lifetime.

The most promising aspect of the long term results was that there continued to be no evidence that the immune system, enhanced with Stimuvax, attacked healthy cells and only targeted cancerous ones. This has been a long running concern during the development of cancer immunotherapy treatments and Stimuvax passed the test- so far.
It may be years before we hear results from the ongoing Phase III trial which will enroll at least 1,300 patients, so it's still too early to get overly excited about Stimuvax. That being said, we've seen enough to know that there is serious potential here.

The company also provided updates on Phase I trials for PX-866 and PX-12, but it's still too early in their respective development pipelines to invest according to their potential.

Also of note, Oncothyreon recently raised $11 million in a stock offering. The money raised will be used for 'general corporate purposes', minus the development of Stimuvax for which Merck will pay for all future expenses. The stock price dropped after the offering was announced due to dilution, but financial deals such as this one are common with small biotechs. However, serious investors can use the dips that follow these deals as a buying opportunity.

It is also worth noting that the company received this financing on pretty good terms ($2.85 per unit) considering that the stock was trading for below a dollar just a few months ago.

Although the stock price has more than tripled in a fairly short amount of time, I haven't stopped accumulating shares. Based on the information that we've received so far, Stimuvax has the potential to move ONTY the way Provenge has for DNDN.

VFC is long ONTY.

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Friday, May 29, 2009

The Celsius PR Department Was Busy This Week

Thursday morning Celsius Holdings (CSUH.ob) announced that the world's first calorie burning beverage, Celsius, was available for purchase in Roche Bros. supermarkets in Massachusetts.

Then, later that afternoon, another press release followed stating that Celsius would also be available in more than 80 locations of Price Chopper supermarkets, a chain spread throughout the northeastern states including locations in New York, Pennsylvania, Connecticut, Massachusetts, New Hampshire and Vermont.

These two press releases confirm the strategy of heavily targeting the northeastern states for distribution, as described by Celsius CEO Steve Haley in numerous conference calls.

Also of note, Celsius will be available in the diet sections of both the Roche Bros and Price Chopper stores. The fact that Celsius is now strictly being marketed as a dietary alternative to the sugar laden energy drinks is a huge step in the progress of adding validity to the 'functional beverage' market.

When Celsius could only be found in the 'new age' sections of supermarkets, there was little that set the product apart from any other beverage in that section. As a result, that led to Celsius getting pulled from the shelves in various locations, as was the case in Albertsons stores in Southern California.

Eventually, if the gaining momentum of the product continues, Celsius will find the mainstream and it won't matter where the product is located in the supermarket. For now, it makes the most sense to market Celsius as a dietary supplement that enables the consumer to burn extra calories and, ultimately, lose weight.

Aside from those looking for an easy way to burn extra calories, Celsius also appeals to consumers like me; that don't necessarily drink it for the calorie burning benefits, but use it as a healthy alternative to diet sodas that are loaded with chemicals and can be just as unhealthy for a consumer as regular soda.

The Celsius stock price responded positively to the news of the new distribution by closing the week at it's 52-week high on decent volume.

There is no doubt that Celsius is a product on-the-move, and over the past few months, that has translated into a stock on-the-move.

While the success of the company, and it's stock, are far from a sure thing, each new distribution contract is accompanied by the feeling that the management team has a methodical business plan that is slowly, but surely growing the company.

I've always been a big fan of this product and I continued to buy the stock even (especially) when it was trading for two and half cents. The recession probably slowed the growth rate as consumers cut back on spending, but it looks like the patience of company management and investors is beginning to pay off.

I admit that much of my confidence in this product came from the fact that I knew I could count on America to jump on a new 'lose weight quick' product.

Celsius also has four clinical studies to back it's claims, making it easier to market.

With every day that goes by, I grow more and more confident that this one will pay off.

VFC is long CSUH.ob.



Celsius Available in Roche Bros Supermarkets
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Comments From Celsius CEO Steve Haley

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Thursday, May 28, 2009

Stock Update: Antigenics (AGEN)

AGEN's Contrary Indicator

Shares of Antigenics (AGEN) dropped on high volume earlier this week and I posted here that I thought that was a contrary indicator pending significant news that would soon be released.

On Wednesday, the company filed a form 8k with the SEC that executes a letter of intent with ISSI Strategy, now Antigenics' exclusive distributor for Oncophage, in Russia.

Oncophage became the world's first approved cancer immunotherapy vaccine last year when Russian authorities approved it's use for the treatment of kidney cancer.

Since the 8k was filed, shares of AGEN have increased by approximately 20% on increasingly strong volume. No press release was issued in conjunction with the filing, so it is possible that the company may be in preparations for a release containing additional information.

However, the execution of the agreement with ISSI indicates that Antigenics is on track for a full product launch of Oncophage in Russia later this year, meaning a revenue stream is not too far off.

AGEN's time at trading below one dollar may be limited.

VFC is long AGEN

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Stock Update: Epicept (EPCT)

Shares of Epiecept (EPCT) rose nearly 15% in early trading on Thursday after the company released news regarding it's early stage anti-tumor agent Crinobulin.

The full results of an already completed Phase I trial will be presented at the annual American Society of Clinical Oncology (ASCO) meeting that will commence on May 29, 2009 in Orlando, Florida.

Early indications for this product are encouraging and a Phase Ib trial is planned to begin during the second half of this year, according to CEO Jack Talley.

EPCT traded on four times the average daily volume by noon after this news was released.

Crinobulin is still a long way off in the clinical pipeline phase of it's development, so I have a hard time believing that the increase in price and volume was in response to this news release.

More than likely, investors are taking a position in the stock in anticipation of the long promised announcement of a marketing partner for Ceplene in Europe. If CEO Talley is to be taken at his word, that announcement should be forthcoming in short time.

It's also likely than an update on Azixa, a treatment for Metastatic brain cancer which Epicept has partnered with Myriad, could be pending. Past updates regarding the potential of Azixa have spiked EPCT as high as four dollars.

So, while the Crinobulin news is encouraging, there is far more immediate news pending that could move this stock.

VFC is long EPCT

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Celsius is Now Available at Roche Bros. Supermarkets, CSUH.ob

Celsius Holdings (CSUH.ob) announced today that the world's first calorie burning beverage, Celsius, will now be available at Roch Bros. Supermarkets in Massachusetts.

This release is not the news that investors have been eagerly awaiting regarding an invigorated consumer awareness campaign, but it is more evidence that the company is methodically building a solid distribution network, obviously centered in the northeast.

Of note, the press release stated that 'Celsius displays will be featured in the stores' which goes a long way towards marketing the product to the potential consumer. Too many times a new product is put on the shelves with no associated advertising and the product just sits there before eventually getting pulled. This has happened to Celsius on a few occasions, most notably in Albertson's stores in Southern California and the Valero convenience stores in Texas. However, a radio ad campaign that got underway in the northeast late last year should improve consumer awareness in the region and help to bolster the already increasing sales of the product.

Both Green Tea flavors (Peach-Mango and Rasberry Acai) will be sold at Roche Bros. locations in addition to two sparkling flavors, Wild Berry and Orange. In my opinion, those are the four best that Celsius has to offer and have the best chance at logging sales numbers.

Investors treated the news with indifference as the company stock dropped eight percent to the seventeen cent level in early trading on Thursday. This comes after Carl DeSantis converted a number of his preferred shares to common stock two weeks ago, effectively killing a significant rally during which CSUH set a new 52-week high of twenty cents.

Earnings of near $1 million for last quarter indicated that Celsius is beginning to gain traction in the market place and the advertising campaign combined with a new product launch (on-the-go packets) should help accelerate Celsius' path towards the main stream.

Unless a huge consumer awareness event takes place or the company launches the anticipated 'energy shots', the next big news should be the second quarter earnings results where I think we'll see a near double over the first quarter earnings. I base that assessment on a full quarter of GNC sales, increased consumer awareness and the new product launch.

Celsius Holdings has a strong management team and with Carl DeSantis on board, things are definitely looking up in DelRay Beach, Florida.

VFC is long CSUH.ob

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Celsius is On-the-Go
Celsius Shows Signs of Life
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Celsius Now Available at GNC
Comments From Celsius CEO Steve Haley



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Wednesday, May 27, 2009

When Investing Advice Goes Wrong and Needs to be Made Right

It has recently come to my attention that some old school investing advice is actually pretty worthless and steers prospective investors away from the market.

I stopped for a cup of coffee last week in a local coffee shop and overheard a conversation between two people who were considering investing some money in the stock market, but were unsure of where to start or what to invest in. During the course of the conversation, one of the two offered some familiar advice to the other, advice that I'd heard a million times before, but for some reason this time it struck me and I realized that this advice doesn't make any sense at all.

"Only invest what you can afford to lose."

It's an age old saying that, when you think about, is a bunch of words that mean nothing when you put them all together.

My first inclination is to try and figure out to whom this advice is geared. I don't know anyone that would say that they can afford to lose money, although I'm sure that there are some members of the 'filthy rich' club that could.

So, keeping that in mind, you'd be led to believe that only the filthy rich should invest their money in the stock market.

Unfortunately, since this advice works under the negative assumption that one would be more likely than not to lose all their money in the market, many middle class wage earners are discouraged from learning the investing trade, and instead they choose to hand over their hard earned cash to fee-hungry money managers or financial advisers.

"Don't invest money that you can't afford to lose."

Because those words drive away many prospective investors and don't mean anything, it's time to say goodbye to that cheap cliche and come up with something new, something that works, and something that teaches.

How about, "Don't invest any money that you need to pay your bills with."

Short, to the point and leaves no ambiguity about what is being said.

For any prospective investors out there, if you encounter someone who offers the "can't afford to lose" advice, turn around, walk away and seek information elsewhere.

Start with these simple tips:

- Do your complete 'Due Dilligence (DD)' on a stock before deciding to invest in it. For all intents and purposes, DD means research. Research the company's financial position, management team, successes, failures and any other information that may be pertinent to the future viability of the company. For biotech and pharmaceutical stocks, it's worth staying on top of clinical trials, financing and patent expiration dates, among other items.

- Learn what your risk tolerance is. There is a lot of money to be made in high risk-high reward stocks, but many investors cannot stand to live with the high percentage price swings that are inherent with those stocks and they end up selling for a loss. Before putting any real money into high risk stocks, learn your stomach for volatility.

- Always have an entry strategy and exit strategy, whether it be a specific price target or significant event. Include if/then scenarios in your strategy and also include how much you will buy/sell in your if/then strategy. Don't stray too far from your strategy because that's how investors get burned.

- Stock don't go up forever. Don't get greedy and assume that your investment will keep rising in value; That's what put the economy in the position it is in now. Stick to your entry/exit strategy and lock in your gains.

- If investing for the long term, buy on any significant dips in the stock price. Those who took advantage of the most recent market crash and bought while everyone else was selling, are sitting pretty right now; and the economy is not even close to a full recovery yet.

- Diversify. Don't put all your eggs in one basket. If that one investment goes south, you've lost it all.

- Don't count on anyone else to look after your investments, that's your job.

Ego and cash do not mix, and many of the big time money advisers (Cramer), and all of the analysts, have their own egos and financial interests in mind, not your best interests. Remember that.

There is not nearly enough space in one post to cover all the good advice that I've accumulated over the years, these are just some of the highlights.

I remember the first time somebody told me "Not to invest any money that I couldn't afford to lose." I thought about that statement for a minute and then said, "What are you talking about? I've got a family to support, I can't afford to lose any money!" And in retrospect, I'm sure glad that I ignored that advice.

The more I think about those words, the less sense they make.

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Stock Watch: Antigenics (AGEN)

Antigenics Still Trading for Sixty Cents

Antigenics (AGEN) became owner of the world's first approved cancer vaccine last April when Oncophage, the company's immunotherapy treatment for kidney cancer, was granted approval in Russia.

Since then, investors have been waiting for additional news to spark the share price of the company, and that news may be imminent.

In what VFC believes is a contrary indicator, on Tuesday the AGEN stock dropped 13% on more than four times the average trading volume.

In ordinary circumstances that would indicate that bad news is pending. However, in VFC's opinion, if there were bad news leaked that would cause significant damage to the share price, I would expect a drop far more significant than 13%. I'd also expect a further drop in after hours trading instead of the increase that we saw, however small of an increase it was.

AGEN message boards on various investing web sites also saw a lot of action today, and the comments were mostly negative. Granted, there is nothing scientific about this assertion, but in the highly manipulated world of sub-one-dollar biotech investing, all these signs mean something.

It could very well be that a large player is taking a position in AGEN and that the increase in volume means nothing, but chances are that Antigenics will be releasing news soon either regarding Oncophage or another drug in their pipeline.

The high trading volume of AGEN has put the stock on my 'watch list' this week.

As long as AGEN is trading for below one dollar, I'll be buying.

VFC is long AGEN.

Tuesday, May 26, 2009

Stock Watch for Wednesday: Vanda Pharmaceuticals (VNDA)

During Tuesday's broad market rally, the action of a few stocks caught my attention and are worth watching for at least the rest of the week.

Vanda Pharmaceuticals (VNDA):

Vanda Pharmaceuticals, producer of the schizophrenia drug Fanapt that was recently approved in the US by the Food and Drug Administration, received a positive analysis and a $20 'fair value' price target from the investment website Morningstar.

The Fanapt approval sparked a major rally in the Vanda stock from right around one dollar, where it traded before the surprise approval, to close above thirteen bucks on Tuesday. A year earlier the FDA had refused to approve Fanapt, then known as Iloperidone, until more data on the drug became available.

Morningstar also indicated that they believe, since the antipsychotic market is a fluid one, that Fanapt will eventually become a billion dollar drug before patent expiration in 2016. The worst selling drug in that market is Pfizer's (PFE) Geodon, which rakes in $1 billion annually.

With the positive momentum already rolling with the Vanda stock, a $20 price target was not a risky bet on Morningstar's part, and after some consolidation in the current trading range, VNDA should march upwards towards that mark. Should first year sales exceed initial expectations, a price higher than that $20 mark is highly possible.

Vanda is set to launch the product by fourth quarter this year.

VNDA is worth watching right now because the company has received a lot of press lately, and in the trading volatility, any drop to ten dollars would make for a terrific buying opportunity.

Don't expect as quick a ride to twenty, however, as was the ride to ten.

VFC has no shares of VNDA.

As Titan (TTNP.pk) Soars, What Comes Next?

The Lights are Still on at Titan
What's Next For Titan?

Titan Pharmaceuticals rose another 25%, and may still rise further, after the recent FDA approval of Fanapt.

Fanapt, produced by Vanda Pharmaceuticals (VNDA) to treat schizophrenia, is Titan's licensed product from which they will receive royalty payments of between 8%-10% from net sales of the product.

As Titan's stock quickly approaches $2, the question is how high can the stock price go?

Any speculation on future stock price is just that- speculation. Hype is not something that you can predict, and it often leads to stocks becoming over or under priced. Sirus Satellite radio (SIRI), now Sirius XM, traded for over nine dollars a few years ago on the hype of Howard Stern coming to the network.

Titan, with a guaranteed revenue stream, is now loaded with potential and the stock could move up on both hype and future value.

Before attempting to predict the future price of TTNP, let's first take a look at some short term events that could move the stock:

- The market for Schizophrenia drugs is huge with $20 billion in annual sales. The fact that patients of schizophrenia switch medications often gives Fanapt, with it's favourable side-effects profile, a chance to gain market share quickly, possibly approaching $500,000,000 in the first year of sales. The lowest-selling drug in the anitpsychotic market is Pfizer's (PFE) Geodon, which rakes in $1 billion in annual sales.

- Probuphine news can be expected at any time.

Probuphine is currently being tested in a second Phase III trial to treat Opioid addiction, after already having proven effective in a Phase III trial that ended last year. The Titan website does not give a time frame for the expected release of these results, but, based on a six month trial, they could come as soon as late second quarter or early third quarter.

An announcement of an already established partner coming on board to market and distribute Probuphine would be huge news. That would eliminate much of the financial burden of the company and, like Fanapt will soon do, provide for additional, cost-free income.

Titan is also awaiting a regulatory decision regarding their request to extend the patent life for Probuphine. If the extension is granted, that will translate into a longer period of time that Titan will enjoy market exclusivity for the drug after making it to market. Probuphine is also being investigated for the treatment of chronic pain.

- Titan has suddenly become an attractive target for an acquisition by big pharma. With a guaranteed revenue stream that will commence by year's end and a drug pipeline of their own, it would not be far fetched to believe that Titan could already be considering offers.

Each day that goes by that brings Titan closer to a revenue stream or a Probuphine update increases the value of the company. Based on that assertion, if Titan were to be purchased, I'd expect it to happen sooner rather than later.

- When Titan is once again listed on a major exchange, a predictable next move by the company, a new breed of investor will buy into the stock. The majority of investors won't touch pink sheet stocks, including many large institutions, so the switch to a big board can only mean good things for TTNP.

Based on no buyout news, the potential of Fanapt and positive Probuphine updates (combined with a little hype) TTNP could trade northwards of five dollars by September. That's VFC's stock price prediction and it's a far cry from the five cents that many bought for.

For Titan Pharmaceuticals, the story is just beginning.

VFC is long TTNP.pk and has no holdings of VNDA.

Stock to Watch: Biovest International (BVTI)

The stock price of Biovest International (BVTI.pk) has doubled over the past few weeks, and the recent high of fifty cents represents a significant increase, to say the least, over the March lows of below five cents.

Biovest, a subsidiary of Accentia Biopharmaceuticals, Inc (ABPIQ.pk) is developing BiovaxID, a vaccine for the treatment of non-Hodgkin's lymphoma.

While, according to the company website, Phase III trials testing the efficacy of BiovaxID are still ongoing, results of a recently completed Phase III trial will be presented at the upcoming American Society of Clinical Oncology (ASCO) Annual Meeting on Sunday, May 31st, 2009 in Orlando, Florida. The anticipation of this presentation could be what has sparked the recent run in the BVTI stock price.

Initial results released last year failed to indicate slam dunk results, which is common for cancer vaccine trials, but the full story will be revealed in a few days.

In additional to the Phase III trials, the company also announced that BiovaxID will be available in a named-patient program in Europe, possibly laying the groundwork for approval in the European Union where Biovax has already been granted Orphan Drug Status.

In the US, BiovaxID has been granted Fast Track status by the FDA.

For the short term, until we know exactly where BiovaxID stands an investment in BVTI is risky. It is, however, a stock worth adding to the watch list if you're not already in. It's a great risk-reward play based on the potential returns if BiovaxID is proven to be a success, but on the other hand, if the upcoming results do not meet expectations the stock could lose at least half it's value in very short time.

If you have a long term horizon, any dip in price should be looked at as a buying opportunity. Additional data will continued to be accumulated by Biovest from Phase III trials and the named patient program and any positive news in the future could offer investors hefty returns.

Of course, the biggest benefit of all will come to the patients that have the most to gain from any new treatment.

We're just now seeing the tip of the iceberg with the potential of cancer vaccines. To date, Dendreon's (DNDN) Provenge is the first cancer immunotherapy to, without a doubt, meet the primary endpoint of a Phase III trial, although the endpoint needed to be changed to patient survivability in order to meet the target.

Antigenics' (AGEN) Oncophage became the world's first cancer immunotherapy treatment last year when it was approved in Russia to treat kidney cancer.

VFC is long BVTI.pk, long DNDN and long AGEN.

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Saturday, May 23, 2009

As the Economy is Poised for Recovery, What do the Bailouts Really Mean for America?

As the economy positions itself for a recovery, and the bailouts continue, the question must be asked if the government has spent too much.

As a result of the market meltdown, Americans from all walks of life have lined up alongside big business waiting their piece of the bailout pie; and the Federal Government has answered just about every call.

Unfortunately, the very tactics intended to lead the United States out of this deep and dark recession are consequently the same tactics that got the country into this mess in the first place – an over-abundance of spending.

George W Bush has reaped much of the blame for the economic crisis by the mainstream media, but by no means should responsibility fall solely on him. Bill Clinton has been widely criticized for deregulating the banks during his administration, and the list of those responsible could go on and on.

However, the real blame lies with all of those who are now lining up for federal bailouts. Most notably, the banking and auto industries and the homeowners who bit off more than they could chew.

Start with the American auto industry; born on the strong ambition and vision of Henry Ford and later expanded to include General Motors and Chrysler. Today the ambition of old has been replaced with the ignorance of new, as the CEOs of the Big Three continued to build vehicles that no one bought. Then, as dealership lots were packed full with last year's model and the industry broke, they looked to the federal government while claiming that the auto industry was too big to fail.

The truth is, however, they are not too big to fail. With the Chrysler bankruptcy underway and GM's soon to follow, unemployment will spike as dealerships close and workers are laid off. However, this restructuring is much needed; if it wasn't, the auto industry would still be thriving.

If any of the Big Three were to close shop, on the other hand, Toyota, Honda and Hyundai, are ready to move in with their assortment of fuel efficient vehicles that consumers want. Not to mention Ford, still standing without having taken a dime of bailout money. The initial shock of these bankruptcies will hurt, but they're long overdue.

The big question is, in my opinion, why did the government wait so long before forcing these companies into bankruptcy? The answer is, most probably, to give the UAW time to finagle the best deal possible for themselves. How the feds allowed the UAW to be more protected than the secured bond holders in the Chrysler bankruptcy is criminal, and more evidence that this administration is playing favorites. That's not to say that all Presidential Administrations don't play favorites, but it proves that it's just 'more of the same' emanating from Washington.

The UAW also gets an ownership chunk in the company while secured bond holders, under pressure from the Obama Administration, get $.29 on the dollar. Fair? Probably not.

Next in line for the bailout money are the CEOs from the banking industry. Contrary to the auto industry, the banking industry IS too big to fail, and that's why both the Bush and Obama Administrations acted swiftly to save the banks. It has cost the American taxpayer a pretty penny, but the big banks need to survive. According to the government's own stress tests, they will, after raising some additional capital.

At the end of the bailout line stands the American homeowner; those on the verge of foreclosure, and those who feel entitled to government money.

These homeowners fall into two categories.

The first group consists of responsible homeowners that have achieved their slice of the American Dream through hard work and ambition, yet have run into financial hardship as a result of the recession and the mass layoffs that ensued. This group deserves bailout money.

The second group does not. The second group consists of the homeowners that couldn’t afford to buy the homes which they are now ready to foreclose on. These homeowners blindly entered into mortgages under terms that they did not understand, then accepted those terms simply because they were available, not because it made fiscal sense.

Regardless of the fact that the banks were irresponsibly handing out sub prime mortgages, and regardless of the fact that many of the mortgage terms were tricky and misleading, the ultimate responsibility for agreeing to a mortgage lies on the person who affixes his or her signature to the dotted line. This goes back to one of life’s earliest lessons - always read the small print, and if you don't understand the terms, then don't sign.

Unfortunately, lessons of life and a sense of entitlement often clash.

Over the next few years, in an attempt to jumpstart the economy, the United States Government will spend more money than any other Government has spent (in the same amount of time) in the history of the world.

If John F Kennedy were alive today, his famous quotation, “Ask not what you’re Country can do for you, but what you can do for your Country!” would need some editing.

No longer is that quote in line with the sense of entitlement that dominates American society today.

The new phrase would simply read, “Ask not what I can do for my Country, just tell me what my government entitlement looks like.”

We already know that California is on the brink of bankruptcy, and that the credit ratings of both the US and UK may receive a downgrade, but the irresponsible spending continues, and so does the irresponsible granting of entitlements.

Every day the feds are getting more and more involved with the undertakings of private business, as if we should believe that they can do it better. The lifeline of private business is turning a profit, and when is the last time the federal government turned a profit? Or even came close?

A private business would have long ago closed shop if it had the spending record of th federal government.

Additionally, if Washington continues to tell us that it was an overindulgence of spending that got us into this mess, why should we believe that more over-indulgent spending on their part will get us out?

And if it doesn't work, who bails out the US Treasury?

On a closing note, let's stop calling it 'taxpayer money', because we all know that when it leaves our pockets it is no longer taxpayer money- it's the government's money.

'Taxpayer Money' is just a slick play on words that enables taxpayers to feel some sort of ownership for these bailouts, when it's control of private industry that this government wants.

Thursday, May 21, 2009

Gilead Sciences (GILD), a Stock in Decline or a Great Buying Opportunity?

The Swine Flu and Gilead Sciences
VFC's 2009 Stock Picks, Part I

After trading at forty eight dollars just three weeks ago on news of the Swine Flu pandemic , shares of Gilead Sciences (GILD) have embarked on a downward trend that now has the stock trading below forty three dollars, closing Thursday at $42.56.

Gilead Sciences is a pharmaceutical giant on the rise and any current drop in share price is unwarranted, in my opinion. The drop could be the result of an increase of shares sold short between March and April as shorts jumped on news that Gilead's experimental blood pressure drug, Darusentan, may have shown some safety concerns in a Phase III trial. Although it met both primary endpoints in the trial, there were five cardiovascular safety events that concerned investigators. The safety concerns may not amount to much after all because, according to reports, three of the five safety events were in relation to patients that had pre-existing heart conditions.

All being said, Gilead should bottom soon, if it hasn't already, before reversing course and ticking on the uptrend. There is too much potential growth opportunity in the company to justify a stock price drop below the forty dollar mark.

For starters, Gilead is sitting on billions in cash. This allows the company to build it's pipeline without looking for outside financing and also leaves the door open for purchases or mergers. In another scenario, the company could use some of that cash for a share buyback, which would increase the price of the stock.

Gilead also receives hefty royalties on sales of Tamiflu, among the most popular flu treatments in the world. Over the past couple of years, sales of Tamiflu have sharply declined as governments world wide had reached their stockpile goals, but with the swine flu still going strong, those governments will need to expend and then replenish their stockpiles. The reinvigorated Tamiflu purchases could lead to a nice payday for Gilead in their next quarterly report. Even with the US Center for Disease Control recently reporting that the Swine Flu virus is now resistant to Tamiflu, any increase in sales of the drug is a huge benefit to Gilead because royalty money is free money, meaning it costs the company nothing to maintain that revenue stream.

Gilead's earnings powerhouse, however, is it's pipeline of HIV drugs and associated treatments. HIV treatment remains Gilead's core business and it's leading drugs, Atripla and Truvada are two of the most popular drugs in the HIV market and supply Gilead with a steady, if not growing, revenue stream. The company is also developing a four-in-one HIV drug that is viewed as a potential blockbuster.

Looking to expand outside the boundaries of HIV treatment, Gilead is also has a developing pipeline of drug candidates that treat hypertension, the flu and hepatitis. In fact, Gilead's already approved Ambrisentan has recently been proven effective in a Phase III trial in treating other pulmonary hypertension (PH) indications, opening the door for an increased, and expanding, revenue stream.

It may also be worth keeping an eye on two pending patent infringement lawsuits that Gilead has filed against Teva Pharmaceuticals. Gilead alleges that Teva, while producing generic versions of Gilead's drugs, infringed upon various Gilead patents. If Gilead wins either case, or both, it is likely that the company will receive either a settlement payment, royalties on sales of Teva's drug or Teva may have to cease production. In each case, Gilead wins. If they lose, however, that could potentially hurt the bottom line.

GILD's recent decline in share price has created a great buying opportunity for those that were waiting to get in. Gilead is slowly setting the tone to become one of the world's leading pharmaceutical giants, and with all that cash on hand, a major acquisition, merger or pipeline purchase may not be too far off in the future.

As long as GILD is trading below fifty dollars, I'm buying.

VFC is long GILD.

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How Long are Shareholders of Epicept (EPCT) Prepared to Wait?

When the European Commission decided to approve Ceplene last October, Epicept (EPCT) looked to be as safe an investment as any since the only thing that stood in the way of Epicept and a revenue stream was the search for a marketing partner.

Now, seven months later, shares of Epicept trade for a mere sixty cents on minuscule volume and investors are beginning to wonder if EPCT is still worth the wait.

The biggest question, in the minds of investors, is why, seven months after approval, has the company not landed a marketing partner for Ceplene?

The length of time without a partner should raise some eyebrows, but it is far too early to give up just yet.

Ceplene, the company's treatment for remission maintenance in patients with Acute Myeloid Leukemia, is, after all, an approved product.

According to the most recent quarterly report, Epicept is in advanced negotiations with a prospective partner to license the European marketing rights for Ceplene. That means that an announcement could come at any time.

In the current economic conditions, many firms are unwilling to spend the up-front money that would assuredly accompany a partnership agreement and the board at Epicept may be holding out while market conditions improve in order to secure the deal that most benefits the company. Another possibility is, however, that potential marketing partners may not see Ceplene as a profitable enterprise and the longer Epicept takes to announce a deal, the more likely this scenario becomes.

However, the fact that inventory of Ceplene has already been produced and shipped to the European Union in preparation for a product launch later this year indicates that a partner is, in fact, close to be announced.

Epicept is also taking the necessary steps required to file a New Drug Application (NDA) in the United States and Canada sometime this year.

If Ceplene alone is not worth a sixty cent investment, the potential of Azixa just may be. Azixa, a treatment for metastatic brain cancer, was discovered by Epicept and licensed to Myriad Genetics. Currently, Myriad is testing the effectiveness of the compound in three Phase II trials. If those Phase II results are positive, Epicept will be due a royalty payment from Myriad upon the launch of a Phase III trial. If Azixa makes it to market, Epciept will be due a royalty on sales. The potential of Azixa is intriguing. In the past, updates regarding its progress has run the EPCT stock price to as high as four dollars.

The risk of an investment in Epicept does not stop there. In addition to Ceplene and Azixa, Epicept has a product portfolio, in various stages of clinical trials, that includes treatments for pain and various cancer indications.

While investors grow impatient for an announcement of a marketing partner for Ceplene, it is far too early to give up on a company with as much potential in the pipeline as Epicept has.

With a solid product pipeline, the potential of Azixa and an already approved drug, EPCT is well worth the risk of a sixty cent investment. The possible rewards, in the short term, could be a double or a triple in price; the long term even higher.

The real benefit, as is always good to remember when investing in biotechs and pharmaceutical companies, is the benefit that these treatments could provide to the patients that need them.

VFC is long EPCT.



Celsius is the world's first energy drink that burns calories! Zero sugar, zero carbs and zero HFCS.

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Wednesday, May 20, 2009

The Politics of Moscow and Cancer Vaccines: Antigenics (AGEN)

From VFC's News House

During the early months of 2009 Moscow continued to demonstrate a reinvigorated political and military strength.

The continued testing of the short-range missile ‘Iskander’ indicated that Moscow is serious about neutralizing the perceived threat of the United States missile shield that would place US missiles within miles of the Russian border. ‘Iskander’ would be deployed to Kaliningrad while the US missiles would take up positions in Poland and the Czech Republic.

Russia also effectively evicted the United States from a valuable air base in Kyrgyzstan when Moscow used its political strength and monetary leverage to convince that country‘s Government to issue the US their walking orders.

Not to be preoccupied with only political and military matters, Moscow has now taken a huge leap forward in regards to cancer treatment. After the Russian Ministry of Public Health approved the marketing and distribution of the kidney cancer vaccine Oncophage last year, the New York based Biotechnology Company, Antigenics, is nearing a commercial launch of the compound within Russia.

Oncophage is one of a new breed of experimental immunotherapy cancer treatments that activates a patient’s immune system to fight cancerous cells. It became the world’s first approved cancer vaccine last year after the Russian Ministry of Health’s landmark decision.

The United States Food and Drug Administration denied approval of Oncophage based on a late stage trial that failed to show that the drug prolonged the recurrence of kidney cancer. Russia, however, granted approval based on a subset of patients that were identified as those least likely to experience a recurrence of the cancer. According to published reports and the trial results, Oncophage was shown to prolong recurrence by an average of 1.8 years in that subset.

Already one of the world’s fastest growing pharmaceutical markets, Russia now stands as the first country to offer an approved cancer immunotherapy treatment.

Cancer patients from around the world have long been waiting for an alternative to the harsh treatment of chemotherapy which has extreme, and sometimes intolerable, side effects. Although unable to provoke an FDA approval, they have also shown to be a formidable lobbying group, as demonstrated by the outcry of public support in the United States for the prostate cancer vaccine, Provenge, developed by Dendreon.

Cancer vaccines may offer the breakthrough in cancer treatment for which patients and Doctors alike have waited.

Another result of Russia’s benchmark approval may be an increase in ‘Medical Tourism’, where patients from other regions would travel to Russia to receive the immunotherapy treatment that they otherwise would not be able to receive.

By the same token, many of the small biotechnology firms that have tried and failed to have their cancer vaccines approved in the United States or Europe may now turn to Russia and their more open-minded approach to immunotherapy approval in an attempt to earn back some of the millions lost to long and tedious clinical trials.

The news of the world’s first approved cancer vaccine was met with little international fanfare, but Russia’s bold move in the Pharmaceutical field has again increased their ever-growing sphere of influence.

Driven in large part by the ambition of Vladimir Putin, Moscow is determined to reclaim Russia’s throne as a world super power. Recently unfolding events demonstrate that this may already have occurred, especially while the United States is preoccupied by a new Presidential Administration and an economic crisis.

One thing is for certain, there are a whole lot of cancer patients out there who have found new hope.

Antigenics (AGEN); Still Trading for Sixty Cents, but is it Worth the Risk?

With the stock market having rebounded from the March lows of DOW 6500 to the recent mark of 8500, there are still plenty of opportunities to consolidate positions and use profits from recent gains to look at high-risk, high-reward stocks such as Antigenics (AGEN)

Dendreon's Provenge, as the first cancer vaccine in America to 'pass' a Phase III trial, gets all the press these days, but just over a year ago Antigenics' kidney cancer vaccine, Oncophage, was approved for marketing and distribution in Russia.

For all intents and purposes, Oncophage is the world's first approved cancer immunotherapy vaccine and it belongs to a company whose stock is trading for sixty cents.

Oncophage was denied approval in the United States after it failed to meet the trial endpoints, but a certain subset of patients were shown to benefit from the treatment and Russia approved based on that subset.

Approval in Russia will allow the company to continue to accumulate and monitor data from ongoing treatment and, after combining that data with existing Phase III data, possibly re-apply for approval in the United States.

While Antigenics is still preparing for commercial launch of Oncophage in Russia, the company will present survival results from it's most recent Phase III trial at American Society of Clinical Oncology (ASCO) Annual Meeting later this month, or possibly early June.

Oncophage has also been granted orphan drug status for the treatment of glioma (brain cancer) by the U.S. Food and Drug Administration and EMEA.

The potential of Oncophage, including the probable revenue stream that Russian sales will generate later this year, is worth the risk of a sixty cent investment, in my opinion.

However, there is more to the Antigenics story than just the Oncophage.

The company's QS-21 Stimulon adjuvant, partnered with GlaxoSmithKline (GSK), is currently being tested in the treatment of stage III melanoma patients after surgical removal of their tumor. Updates of that trial and another non small cell lung cancer trial could come this year.

Addionally, according to the company's most recent quarterly report, Clinical development is ongoing for an additional 14 QS-21-containing vaccines by Antigenics’ collaborative partners, including two more in Phase 3 clinical studies.

Antigenics is high on my list of stocks that could possibly turn into the next Dendreon, and for sixty cents, the risk is well worth the reward.

I'm still accumulating shares of AGEN as long as it trades below one dollar.

VFC is long AGEN.

The Lights are on at Titan (TTNP.pk)

What's Next for Titan?Some Old Friends Are Back: TTNP, VNDA

Just weeks ago, Titan Pharmaceuticals was a company on the brink. The stock was trading for five cents, or below, and most corporate offices had been cleared out and were standing empty.

After the failures of Spheramine and the FDA non-approval of Ilperidone, Probuphine was the only hope that company officials and investors could cling to that would keep the company alive.

Then came the surprise FDA approval of Fanapt (Iloperidone), and all of a sudden the company had a pulse. Titan, which will receive 8% royalty of all Fanapt sales up to $200 million and 10% on sales above that number, had a future revenue stream and a drug candidate pipeline to boast.

Today, with Titan risen from the ashes, the company announced that some familiar faces will be coming back to work, most notably former CEO Mark Rubin. Sunil Bhonsle and Kate Beebe have also been brought back on board. All will receive stock options with a value price of $.79 in agreements that minimize the use of cash until the Fanapt revenue stream starts rolling in early next year.

With the key players back in place, the company can concentrate on bringing Probuphine, which has already produced positive results in a Phase III trial, to market. Probuphine is currently being tested in an additional Phase III trial for the treatment of Opioid addiction and a Phase I trial for the treatment of chronic pain.

Titan is also developing the ProNeura drug delivery system, the same system used for Probuphine, and this technology could be developed to be used in conjunction with other drugs to treat various indications.

In the past, Titan was also developing DITPA, a treatment for congestive heart failure. Although there is nothing about this drug candidate on the Titan website, it is still currently being tested in Phase II trials. DITPA could be a dark horse for the company.

Titan, if for no other reason than Fanapt revenue, just may have a future as a vibrant drug company.

The stock has rallied to over one dollar and after it demonstrates the ability to hold that level, I expect the board to apply to trade on a major exchange, either the Nasdaq or American Stock Exchange.

There is also the possibility of a buyout. Nothing of that possibility was noted in today's press release, but if a buyout offer comes, the three former members of the Titan team that just reentered the picture are set for a hefty payday, as will be investors; especially those that loaded up at five cents.

I still see Titan as a decent buy at $1, but every day that goes by is chance that a Probuphine update or rumor of a buyout could launch the stock price to near $2.

Like the Phoenix, Titan has risen from the ashes.

VFC is long TTNP.

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Tuesday, May 19, 2009

CALLing on Citi: Citi Calls Still Trading at Attractive Prices

The DOW rallied over two hundred points on Monday, led by a revival in the financial sector. 'Experts' and analysts alike agreed that the worst for the banks may be in the rear view mirror and they even went so far as to predict that many banks may begin posting profits again, even as early as this quarter.

Additionally, according to published reports, it is possible that TARP money will start being repaid as early as June.

With this slew of positive news released, a run in financials may soon follow and investors should position themselves for that eventuality.

That being said, the opportunity to buy Citi (C) for under four dollars may be diminishing.

Back in February I thought that the financial sector had stabilized enough to start accumulating, and even as the sector took one more death spiral downward in March on fears of nationalization (creating huge buying opportunities for those that can stomach the risk), the opportunity to buy on the cheap is still ripe.

For the long term investor, 'banking' on a rebound in the banking sector can be a safe, and profitable bet down the road, as fears of overall failure have subsided.

The big banks are still trading at levels that would have been unheard of just a year ago. While many of them may post huge percentage gains over the course of the economic recovery, I like Citigroup (C) as the best bet for the biggest rebound because, at the peak of the economic crisis when Citi looked to be the one that would go under, the stock was beaten down worse than most other financials. While the stock has recovered from its ninety seven cents low of March, accumulating at under four dollars could be a rewarding investment as the recovery takes shape.

Even more so than the stock, I think Citi calls are trading at extremely attractive prices.

The September 2009 $5 strike price calls are still trading for roughly a quarter. If a run in the financial sector does occur before the summer is out as many predict, these calls are a good bet to be 'In the Money' by then.

Even more attractive than those are the C Jan 2011 $7.50 calls still trading for under one dollar. It's a pretty safe bet, in my opinion, that Citi will be trading higher than that strike price in nearly two years from now when the economy should be heading back to full steam.

To take advantage of a broad financial sector recovery, and not just count on Citigroup, I've accumulated shares of the Electronically Traded Fund (ETF) Financial Select Sector SPDR Fund (XLF). If a rebound in the financial were to occur, XLF has holdings of many of the big financial names, such as JP Morgan/Chase, Met Life and Bank of America. I also looked at another financial sector ETF, FAS, but went with XLF.

With the broad economic recovery taking shape, I now feel ready to benefit from a recovery in the financial sector.

Disclosure: VFC is long C, .CIP and .VFNAU.

Increased Regulation or Micromanagement?
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Monday, May 18, 2009

When Politics and Stocks Collide: Should GE Shareholders Sell in Protest to the Left-Leaning Bias of MSNBC?

Shareholders of the General Electric (GE) stock expressed their displeasure last month towards the NBC Universal division of the company during the annual shareholders meeting. The target of their furor, according to published reports, was the politically left-leaning news network, MSNBC.

Situations such as these bring to question an investor's intention whey buying stock in a particular company. It's no secret that MSNBC, if not the entire NBC brand, lives on the far-left side of the political fence, but does that mean those with opposing political views should sell their GE stock in protest?

To make it simple, the answer to that question is 'Yes' and 'No.'

There would be two reasons to sell based on General Electric's NBC division;

One, because the investor feels NBC's political bias will eventually hurt the bottom line by pushing viewers towards other networks and therefor losing advertising revenue for the company or,

Two, the investor, personally, wants no part of a company that promotes viewpoints in opposition to his or her own.

It would be entirely understandable to sell the stock each of these scenarios. I have even thought about selling my stake in GE because I believe that NBC is going to lose more and more viewership (if there is even anyone left watching) on their cable news channel until a middle ground can be found. The loss of viewership will ultimately transform into a loss of advertising revenue which will, in turn, effect the bottom line of the NBC Universal division. Additionally, CNBC is facing new competition for viewers of financial news by Fox Business Channel, but I don't think FBN poses a serious threat to CNBC just yet, so that remains a non factor for now.

On the other hand, the NBC Universal division of General Electric is just a small piece of a very large pie. Government and Security contracts continue to accumulate for the company and GE is continuously among the leaders of innovative new products that are distributed around the world. This includes, most recently, power grids that could set the new standard for energy efficiency as we know it. Also, with the economy now bottomed and the recover underway, the GE Financial Services division, which took a huge hit during the economic collapse and was largely responsible for the collapse in GE share price, should rebound as well. A company that regularly rakes in over $4 billion in quarterly profits should not be taken lightly when deciding whether to buy, hold or sell. In my opinion, these factors weigh more heavily on my decision not to sell than does letting the concern that MSNBC may go under get the best of me.

However, a shareholder is viewed as a supporter of a company's business plan simply by holding shares. In that sense, I would understand an investor selling shares to protest the political ideology of the company, especially when that ideology could potentially hurt the bottom line, as MSNBC's extremely low ratings may end up doing. However, small investors make little difference in the price of a large cap stock, and selling would, for the most part, go unnoticed in the market unless a wave of investors followed suit. Probably more effective would be to speak up at the annual shareholders meeting, as did shareholders of GE last month, and possibly influence the election of the Board.

While I definitely understand both sides of the story, I believe selling the GE stock in protest of NBC's left-leaning news network is not worth the potential gains that the stock has to offer. Especially when the stock is trading as low as it is now, and has for so quite a while.

As the economy recovers, so should GE's stock price, so VFC is remaining long.

As for MSNBC? Sooner or later the bigwigs at corporate GE will notice that no one is watching, and maybe, just maybe, they'll start reporting news that everyone can watch.

Disclosure: VFC is long GE.

Sunday, May 17, 2009

Insmed's (INSM) Profit and the Potential of IPLEX

Insmed Inc (INSM) released their first quarter results last week, which included a $130 million payment from Merck that completed the sale of Insmed's Follow-on-Biologics (FOB) platform which was agreed to in February. Since news of the sale was announced, INSM has inched higher from the mid forty cent range to close the week at $1.36.

With the sale of the FoB platform to Merck, Insmed will now concentrate on the development and marketing of their primary drug, IPLEX. IPLEX has already been approved by the US Food and Drug Administration (FDA) for the treatment of short stature in children, but due to a patent infringement lawsuit which Insmed lost a couple of years ago, IPLEX is no longer used to treat that indication.

However, as a result of that lawsuit, Ipsen Pharmaceuticals can choose t opt-in as Insmed's partner in the development, marketing and distribution of IPLEX if the drug proves effective in treating any other indication in a Phase II trial.

An opt-in on Ipsen's part would require that the company issues Insmed a milestone payment and both firms would then share future profits. If Ipsen chooses not to opt-in, Insmed would go it alone, meaning no milestone payment, but also no sharing of profits.

This is why Q2 2009 is a big one for Insmed.

As announced in the Q1 report, preliminary Phase II data in Myotonic Muscular Dystrophy (MMD) should be released 2Q 2009, before the end of June.

If the results are positive, Ipsen may decide to opt-in, providing Insmed with an additional cash infusion that will alleviate the need to raise capital for quite some time. If Ipsen chooses not to opt-in, Insmed will be in pretty good shape anyway because the Merck payday will allow them to fund future operations, including a Phase III, without the threat of needing to raise cash anytime soon.

The only way Insmed loses is if the results do not meet expectations.

If results are positive, the Insmed stock could breach the $2.50 mark, or higher, based on the potential of IPLEX. The trading pattern of INSM over the past couple of weeks has me believing that news is imminent, and I do not believe that the recent rise to $1.50 is strictly the result of the pending quarterly report.

Also, if Insmed management were not confident in the development of IPLEX, I do not believe that they would have sold their FoB platform, a potential lucrative market once Congress enacts regulation of that market, as expected. In my opinion, the sale of the FoB pipeline is bullish for the company.

In addtion to MMD, IPLEX is also being investigated to treat ALS and other indications.

Based on the fact that IPLEX is an already FDA-approved drug with huge potential, I believe INSM is a five dollar stock right now. If quarter two produces solid Phase II MMD results and any additional good news, I would expect to the stock reach that level by mid summer (give or take) as the economy rebounds and money pours back into the market.

VFC is long INSM.

Something Still Brewing for Insmed
VFC Expects Insmed News
Insmed's IPLEX Given the Experimental Green Light
Insmed's $130 Million Payday

Celsius (CSUH.ob) Traded Over One Million Shares Friday

Just days after Celsius Holdings (CSUH.ob) announced the launch of the powdered version of the calorie burning energy drink by the same name, Celsius, the company's stock traded over one million shares while setting a new 52-week high. The one million-plus shares were three times the daily average for the stock.

CSUH.ob has had such high volume spikes in the past only to quickly retreat to previous trading levels, but never before has the company been so poised for growth as it is now. This price spike just may stick.

Celsius has built a solid ditribution network, highlighted by deals with GNC and the Vitamin Shoppe, and has launched a television and radio ad campaign in targeted markets. According to the company's most recent quarterly report, the ad campain looks to be having a solid effect on sales. Additionally, the powdered packets are now on sale at the Celsius website and will show up in stores at any time.

The stock, after rising nearly 40% in days, could continue to move up based on the hype created by the launch of the packets and the soon-to-be-launched energy shots, however, a retracement will probably come at some point. The big test for the stregnth of the stock will be how low it moves on the retracement.

It held the twelve cent mark pretty solidly after the last runup a couple of months ago, so indications are that the stregnth of the stock is growing along with the consumer awareness of the product.

I expect solid growth moving forward for the product and the stock and I wouldn't be surprised to see fifty cents by year end 2009.

However, this stock could shoot to that level, or higher, on any big news such as a quarterly earnings blowout or a big celebrity endorsement.

While investor awareness is growing, the sceptical side of me will wait to see the stock hold the twenty cent level next week. If that happens, I'll be convinced that this run is for real.

I'm well solidified in my position of CSUH.ob and my cost average basis has me sitting on more than a double at this point, so I'll sit back and enjoy the ride higher.

VFC is long CSUH.ob.

Saturday, May 16, 2009

Still Not Sold on Blockbuster (BBI)

Stock Watch: BBI
Three Stocks That Won't Recover and Three That Will

As I've outlined before, due to a lack of innovation in the DVD rental market, Blockbuster is on the way down. The company's stock (NYSE: BBI) had enjoyed a nice run of late before crashing down to reality after the release of the company's Q1 report.

Revenue and same-store sales continued to drop and CEO Jim Keyes attributed much of that drop to consumers choosing to watch movies in the theaters vice staying home and renting from Blockbuster. Probably more closer to the truth, the reason for the decline in revenue is because Blockbuster has been losing a competitive battle to Netflix and Redbox.

Blockbuster is years behind Netflix in the rent-by-mail DVD market, and Netflix's gain in subscribers has been Blockbuster's loss. Additionally, Redbox's $1 Kiosks are dipping into the market share of both companies.

Just as the General Motors philosophy of 'build it and they will come' has led that company to near bankruptcy, Blockbuster's mentality of 'offer it and they will rent it' left the company in the dark when Netflix stormed onto the scene.

To make matters even worse, Video-on-Demand and digital services such as iTunes could soon render all of these DVD rental companies irrelevant.

However, there may be some good news. Keys did mention that Blockbuster will roll out up to 3,000 kiosks by year end 2009. While the company has no chance at competing with Netflix in the mail-rental market, Blockbuster could easily steal market share from Redbox in the kiosk sector. The only benefit that Blockbuster has over Redbox is that they offer new releases first, it usually take Redbox a few to offer newer releases for $1. If Blockbuster offers new releases in their kiosks for much less than the $5 in-store price before those titles hit Redbox, then the company may be able to stave of collapse long enough to come up with an alternative plan to sustain revenue. I

While the stock has been great for day traders, there are too many other stocks on sale right now to consider BBI a safe bet as a long term investment. That could change if Keyes can develop a plan for the future beyond same-store sales and kiosks.

VFC has no financial interest in any of the companies mentioned in this post.

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