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(Best) CLMS, BARE, PSYS (Worst) SQNM, XNPT, HSII from Better Trades
May 5, 2009
Coming off the third consecutive week in which the major indices posted gains, March proved to be the best month, with regards to percentage gains, in which the markets have seen since the 1930s. Over the past week, several companies made solid increases in their market share, while others were not as profitable during the markets push higher.
Top 3 Stocks
(CLMS) – Calamos Asset Management Inc. ($8.70 to $12.31) +41.5%
Providing investment advisory services through its subsidiaries to institutions and individuals, principally in the United States, Calamos Asset Management, Inc. (CLMS) applies a proprietary investment process centered on risk management across an expanding range of investment strategies within the equity, balanced, convertible, high yield and alternative investment classes. Working on a five-day rally, shares of Calamos were boosted by the company’s earnings release.
Announcing for the 1st quarter, Calamos booked net income of $3.35M, or $0.17 per share, in sharp contrast to the previous year’s earnings of $0.44M, or $0.02 per share, more than 6-times the profit in last year’s 1st quarter. Although net income surged, the company’s total revenues declined from $110.7M to $59.6M, a decrease in sale of more than 46%.
During the period, Calamos saw earnings benefit from investment and additional incomes of $14.1M, versus a loss of $46.8M a year ago. The company’s operating expenses declined during the period as well, reducing by 30% to $46.4M. On average, analysts within the industry were looking for the money management company to record quarterly earnings of $0.10 per share on total revenues of $61.34M.
Over the course of a year, shares of CLMS have been trading in a range between $2.55 and $24.00 per share. Continuing with a solid performance over last week’s sessions, Calamos’ stock advanced by the close of Monday’s trading, adding $1.94, or 15.8%, to close out the start of the week at $14.25 per share.
(BARE) - Bare Escentuals Inc. ($6.70 to $10.09) +50.6%
Posting one of the largest percentage gains over the last five trading sessions was Bare Escentuals, Inc. (BARE), one of the fastest growing prestige cosmetic companies in the United States. As a leader in mineral-based cosmetics, BARE utilizes a distinctive marketing strategy and multi-channel distribution model to develop, market and sell cosmetics, skin care, and body care products under bareMinerals, RareMinerals and namesake Bare Escentuals brands. The company’s professional skin care products are marketed under its formulations brand through infomercials, home shopping television, specialty beauty retailers, company-owned boutiques and spas and salons.
Propelled by the company’s 1st quarter earnings announcement during the week, shares of BARE jumped more than 50% in market value on the heels of a better-than-expected report, despite having a year-over-year decline in profits. For the recent period, Bare Escentuals recorded net income of $16.7M, or $0.18 per share, compared to a profit of $25.8M, or $0.28 per share from a year ago, a decline in earnings of more than 35%. In the meantime, revenues fell-off as well, slipping from $140.4M to $124.3M, a decrease in sales of more than 11%.
Even with the lower year-over-year results, figures still came in above market expectations. On average, analysts were looking for the cosmetics company to book quarterly earnings of $0.14 per share on overall sales totals of $117.6M. Following the company’s announcement, shares of BARE surged nearly 45% by the close of Thursday’s trading session.
The biggest challenge that lies ahead for the company is whether they can reduce their inventory. As consumers continue to curtail their spending, BARE will be able to better offset a decline in sales totals by cutting supplies. By the close of Monday’s trading session, the company’s stock slipped $0.58, or 5.7%, to close at $9.51 per share. During the past year, shares of Bare Escentuals have ranged between $2.45 and $24.28 per share.
(PSYS) – Psychiatric Solutions Inc. ($13.27 to $19.28) +45.3%
Offering an extensive continuum of behavioral health programs to critically ill children, adolescents and adults through its ownership and operation of freestanding psychiatric inpatient hospitals and its management of psychiatric units within general acute care hospitals owned by others, Psychiatric Solutions, Inc. (PSYS) confirmed early last week that the company’s 1st quarter results helped push shares higher by more than 45% for the week. Upon releasing quarterly results, shares of PSYS climbed more than 26% in Wednesday’s trading session.
For the quarter, Psychiatric Solutions posted net earnings of $27.5M, or $0.49 per share, compared to last year’s tally of $25.6M, or $0.45 per share, up more than 7% as patient services increased more than 10%. Meanwhile, revenues advanced as well, climbing from $423.8M to $450.4M, an increase of more than 6%. Analysts, on average and excluding special items, were looking for the provider of behavioral health services to post earnings of $0.49 per share on total sales of $452.26M.
In addition to the company’s solid earnings report, the company also solidified their market position by reaffirming their yearly guidance figures. As previously stated, PSYS is looking to post annual earnings between $2.24 and $2.32 per share, while analysts are projecting yearly profits of $2.21 per share.
Continuing with a surge in the previous week’s trading, shares of PSYS advanced y the conclusion of Monday’s session, adding $0.11, or 0.6%, to finish at $19.39 per share. Over the past 52 weeks, shares of Psychiatric Solutions have traded within a range between $12.49 and $40.90 per share.
Worst 3 Stocks
(SQNM) – Sequenom Inc. ($14.06 to $4.11) -70.8%
The hardest hit stock throughout the past week was Sequenom Inc. (SQNM), which is engaged in the field of industrial genomics. SQNM saw their stock plummet more than 70% by Friday’s close as a quarterly loss and a botched test sample compounded the dismal week.
Sequenom’s industrial genomics practice involves the large-scale commercial use of the knowledge of DNA variations for improving health, agriculture and livestock. The leading program within the company is the development of the MassArray system, an accurate, cost-effective technology that is capable of intense analysis at high speeds.
For the recent quarter, SQNM recorded a loss of $17.5M, or $0.29 per share, nearly twice the loss the company incurred last year of $8.6M, or $0.19 per share. Revenues, meanwhile, receded as well, falling from $10.6M to $8.7M, a decline in sales of nearly 18%. The bottom-line was greatly affected by Sequenom’s increase in operating expenses, which jumped more than 41% to $26.5M. Analysts, on average, were looking for the diagnostic test maker to post a quarterly loss of $0.24 per share on revenues of $11.2M
The most damaging news came late last week as results from the company’s Down syndrome test was apparently mishandled by employees, thus putting the results into question based on validity of the data. Over the past year, the Down tests were achieving near perfection in their preliminary studies. The company would not comment on whether the mishandling of the samples was deliberate or not. Having been seen as a promising test, Sequenom has now delayed the testing by at least six months, while delaying additional genetic tests indefinitely.
With much of the company’s stock value taken out by the end of last week, shares of SQNM rebounded slightly to start the first full trading week of May, adding $0.03, or 0.7%, to close the session at $4.14 per share. Over the past year, shares of Sequenom have ranged between $3.23 and $29.14 per share.
(XNPT) – XenoPort Inc. ($17.38 to $14.27) -17.9%
In a similar circumstance as Sequenom, XenoPort, Inc. (XNPT), a biopharmaceutical company focused on developing a portfolio of internally discovered product candidates that utilize the body's natural nutrient transporter mechanisms to improve the therapeutic benefits of existing drugs, witnessed their stock’s market value slip over the past several trading sessions, due to a failed drug study. Shares of XenoPort slipped nearly 18% before the start of this week’s trading.
In conjunction with GlaxoSmithKline PLC (GSX), XenoPort confirmed early last week that their pain drug study was unsuccessful during the mid-stage of trials, as a high number of patients responded to the placebo. The drug, developed for the use in diabetic peripheral neuropathy, or pain associated with diabetes, was in its 14th week of study with more than 420 patients with either Type 1 or Type 2 diabetes. With so many candidates responding to the placebo, the companies had no other choice but to pull the plug on testing. Results are pending further evaluation to determine the necessary steps for the continuation of the proposed drug.
Upon the release of the company’s dire drug-testing results, an analyst with Lazard Capital Markets downgraded their position on the stock from a “buy” rating to a “hold.” The analyst commented on his actions by saying, "While it is not uncommon to get mixed results from different neuropathic pain indications, we believe investors will need to see positive data before they reward the shares."
The start of the trading week proved to show much of the same results as did the previous week. With the overall markets trading in the green, shares of XNPT followed suit, adding $0.34, or 2.4%, to close Monday’s session at $14.61 per share. During the last year, shares of XenoPort have traded as high as $51.42 per share, and as low as $13.36 per share.
(HSII) – Heidrick & Struggles International Inc. ($22.83 to $16.63) -27.2%
As a direct result of a poor quarterly earnings report, shares of Heidrick & Struggles International (HSII) plunged more than 27% throughout the previous week’s trading, results from the data showed a loss for the period and an announcement of planned job cuts. The company also stated that bonuses and salaries were to be reduced in efforts to cut costs by nearly $20M a year.
Heidrick & Struggles, a leading global executive search firm with years of experience in fulfilling clients' leadership needs, offers and conducts executive search services in every major business center in the world. With their primary focus on identifying, evaluating and recommending qualified candidates for senior level executive positions, Heidrick & Struggles operate through a worldwide network of professionals in order to provide executive search services to a broad range of customers.
In the company’s earnings statement, HSII recorded a net loss of $18.9M, or $1.15 per share for the 1st quarter, in sharp contrast to last year’s profit of $7.1M, or $0.38 per share. Included in the results, was a restructuring charge of $13.4M. If excluded, the company would still have posted a net loss, albeit lower at $11.2M, or $0.68 per share. Quarterly revenues came in much lower than the previous year as well, falling more than 41% to $93.7M from $159.9M. In the meantime, analysts were looking for the executive search firm to book a profit of $0.04 per share on total sales of $108M.
As investors settled over the weekend, following the company’s poor showing last week, shares of Heidrick & Struggles jumped during Monday’s trading, gaining 4%, or $0.67, by the close to conclude the day at $17.30 per share. Since this time last year, shares of HSII have traded within a range between $13.52 and $34.99 per share.
2009 Better Trades Article
brought to you by
BRIAN MULLIN
