American Software Inc Nasdaq: AMSWA $7.04
Research Report
Industry: Computers, Technology & Internet
Rating: Strong Buy (Reiterated)
Price Target: $9.00
By: David P. Soetebier, CFA
American Software Strong Buy Rating In Update Coverage; Leading Supplier Of Supply Chain And Enterprise Management Software
January 8, 2007. American Software (Nasdaq: AMSWA) is a leading supplier of supply chain and enterprise management software. It has an excellent market share position in an area with above-average growth potential. The Company's strong balance sheet allows it to take advantage of growth opportunities either internally or through acquisitions. Financial progress made in recent quarters has been partially hidden by accounting adjustments made for the Demand Management Inc. (DMI) acquisition, other nonrecurring charges at Logility (NasdaqNM: LGTY $7.93), and higher tax rates at American Software and Logility. While we expect favorable revenue growth for fiscal year 2007 (ending April 2007) and higher operating income, the increase in operating income will be partially offset by higher reported taxes at Logility, versus previously being offset by net operating losses in the past. Consequently, the strong operating income improvement we are projecting for Logility in fiscal 2007 will not fully translate into after-tax earnings for the parent company. Fiscal 2008 (April) will be the Company's first "normal" year during which earnings won't be negatively impacted by higher taxes (as they were in the previous year) and other non-recurring items. Because of the confusion in the reported results, we don't believe the stock price has fairly reflected the Company's growth potential. The shares of American Software have a current cash dividend of $0.08 per quarter.
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A.P. Pharma, Inc. Nasdaq: APPA $1.28
Research Report
Industry: Healthcare, Biotechnology & Pharmaceutical
Rating: Strong Speculative Buy (Reiterated/Update)
Price Target: $2.00
By: Stephen L. Handley
AP Pharma Strong Speculative Buy In Update; Pursuing A High Risk/High Reward Strategy; Believe Risks Low and Probability of Success High
January 10, 2007. We are maintaining our Strong Speculative Buy rating for AP Pharma (Nasdaq: APPA), although our previous one-year price target of $3.00 per share now appears to be too ambitious (in view of recent announcements, the stock's current price, and possible dilution from additional equity financing), we have somewhat arbitrarily reduced this target to $2.00. This should, in effect, represent a partial advance to a higher level we would expect once APF530 is commercialized, which we now assume will be in 2009. Its primary focus is on bioerodible systems, either injectable or implantable, that incorporate its proprietary Biochronomer™ technology. Management is now devoting virtually all of the Company's resources to the clinical trials and regulatory documentation in support of the eventual commercialization of its key compound, APF530, which is being developed for the prevention of acute and delayed chemotherapy-induced nausea and vomiting (CINV), where there is an important identifiable need for APF530's therapeutic features. On December 21, management announced that it now believes it will not meet a previously announced target of filing this compound's NDA in 2007. The concentrated focus on APF530 means that management is pursuing a high risk/high reward strategy. We believe that this is the correct move because we judge that the risk of not eventually achieving commercialization of APF530 is very low, while the probability of this compound ultimately achieving great commercial success is quite high.
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Biophan Technologies, Inc. OTCBB: BIPH $0.52
Research Note
Industry: Healthcare, Biotechnology & Pharmaceutical
Rating: Strong Speculative Buy (Reiterated)
Price Target: $2.00
By: Richard W. West, CFA
Biophan Technologies, Inc. To Restate Financials From 11/30/05 Forward; Strong Speculative Buy Rating Reiterated
January 11, 2007. Biophan Technologies, Inc. (OTCBB:BIPH) announced that it is restating financial statements for the quarter ended November 30, 2005, and all subsequent periods in compliance with the FASB FIN 46®. For purposes of consolidation, Biophan will value the assets of MYOTECH at $29.0 million as of November 30, 2005, and subsequent statements will reflect the increased percentage ownership in MYOTECH assets. We reiterate our Strong Speculative Buy rating and our 12-month $2.00 per share price target.
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Biophan Technologies, Inc. OTCBB: BIPH $0.52
Research Note
Industry: Healthcare, Biotechnology & Pharmaceutical
Rating: Strong Speculative Buy (Reiterated)
Price Target: $2.00
By: Richard W. West, CFA
Biophan Technologies, Inc. Announces MYO-VAD Animal Testing; Strong Speculative Buy Rating Reiterated
January 10, 2007. Biophan Technologies, Inc. (OTCBB: BIPH), a developer of medical technology, released today, January 10, 2007, news that it is advancing to the next phase in development of the MYO-VAD™ cardiac support system with its co-developer MYOTECH, LLC whose tooling will be used in animal tests in the first-quarter 2007 to verify product performance. We reiterate our Strong Speculative Buy rating and our 12-month $2.00 per share price target.
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Biophan Technologies, Inc. OTCBB: BIPH $0.52
Research Note
Industry: Healthcare, Biotechnology & Pharmaceutical
Rating: Strong Speculative Buy (Reiterated)
Price Target: $2.00
By: Richard W. West, CFA
Biophan Technologies, Inc. Releases Data From FDA Workshop Defining Measurements of MRI Safety of Medical Implants; Strong Speculative Buy Rating Reiterated
January 8, 2007. Biophan Technologies, Inc. (OTCBB: BIPH), a developer of medical technology, today published a report written with the FDA on their findings from a recent workshop designed to research and define methods for measuring MRI safety of medical implants. With the cessation of tax selling, Biophan's common stock is in an up trend. We reiterate our Strong Speculative Buy Rating and our 12-month $2.00 per share price target.
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Chemokine Therapeutics Corporation OTCBB: CHKT $0.65
Research Report
Industry: Healthcare, Biotechnology & Pharmaceutical
Rating: Neutral (Reiterated)
By: William R. Prather, RPh, MD
Chemokine Therapeutics Neutral Rating In Update Coverage; Waiting For Additional Information on Trial Results
January 12, 2007. Chemokine (OTCBB: CHKT) recently announced the results of the second stage of their three-part Phase Ib clinical trial with CTCE-0214, the Company's hematological drug candidate. We were expecting results from both the second and third stage of this study (the third stage combines CTCE-0214 with granulocyte colony stimulating factor [G-CSF]) to be reported in this time frame, but have learned that Chemokine is behind their original schedule because they added additional subjects to stage one of the study as well as adding an additional arm to the second part of the study in which CTCE-0214 was administered subcutaneously in addition to the intravenous route. Additionally, as elaborated upon below, we believe the data derived from this part of the study demonstrates that Chemokine has yet to optimize the intravenous dose of CTCE-0214. We do not believe there will be significant appreciation in the market value of Chemokine until the investment community is able to receive additional, clarifying information regarding the dosing and efficacy of CTCE-0214 as well as information on the efficacy of CTCE-9908, the Company's other lead product intended for the treatment of cancer. We are, therefore, continuing to rate the common stock of the Chemokine Neutral.
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Clearant, Inc. OTCBB: CLRI $0.16
Research Note
Industry: Healthcare, Biotechnology & Pharmaceutical
Rating: Neutral (Reiterated)
By: Sally H. Wallick, CFA
Clearant, Inc. Shares Down On Heavy Volume.
January 15, 2007. Clearant, Inc. (OTCBB: CLRI): Over the two-day period January 11 and January 12, Clearant's share price declined 32% from $0.25 per share to $0.17 per share on well above-average trading volume. There was no news from the Company to explain the weakness. The Company recently announced the cancellation of a license with Cryolife, but that information was revealed on January 5 and the stock, which closed at $0.26 per share on January 4, closed at the same price on January 8. Nor are we aware of any external event that may have affected the stock. As noted in our recent comments on Clearant, we believe that it is imperative that the Company raise additional capital and that it faces significant near-term financial and operational risk if unable to do so. To date, Clearant has not announced any specific capital-raising plans, which could be weighing on the shares. We rate Clearant's shares Neutral.
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Clearant, Inc. OTCBB: CLRI $0.16
Research Note
Industry: Healthcare, Biotechnology & Pharmaceutical
Rating: Neutral (Reiterated)
By: Sally H. Wallick, CFA
Clearant, Inc. License With Cryolife Cancelled; Direct Distribution Agreements Signed.
January 8, 2007. Clearant, Inc. (OTCBB: CLRI) was notified that Cryolife will terminate its license with the Company effective January 31, 2007 due to the discontinuance of some of Cryolife's orthopedic activities. Cryolife will pay Clearant a $100,000 termination fee, as well as any outstanding royalties. In mid 2006, Clearant introduced a new revenue initiative to directly distribute CLEARANT PROCESS(R) Sterile Implants to surgeons, clinics and hospitals using the Company's own sales force. As a result of this new strategy, we believe that the Clearant's mix will shift, over time, toward more direct distribution revenue. In December, Clearant announced agreements with OR Specialties and JPS Surgical, Inc., leading distributors of orthopedic surgical supplies, to support its direct distribution strategy. These agreements expand Clearant's reach into markets where the Company does not have a direct sales force. We rate Clearant's shares Neutral. Despite the promise of the Company's sterilization technology and the initial success of its new direct distribution strategy, we believe that it is imperative that the Company raise additional capital and that it faces significant near-term financial and operational risk if unable to do so.
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CardioVascular BioTherapeutics Inc OTCBB: CVBT $1.40
Research Note
Industry: Healthcare, Biotechnology & Pharmaceutical
Rating: Neutral (Reiterated)
By: Richard W. West, CFA
CardioVascular BioTherapeutics; Patent Office Allows Application; Neutral Rating Reiterated
January 9, 2007. CardioVascular BioTherapeutics, Inc. (OTCBB:CVBT) announced that the U.S. Patent and Trademark Office (USPTO) allowed Cardio's patent application entitled, "Method of Producing Biologically Active Human Acidic Fibroblast Growth Factor and its Use in Promoting Angiogenesis."
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FX Energy Nasdaq: FXEN $7.05
Research Note
Industry: Oil, Gas & Energy
Rating: Speculative Buy (Reiterated)
Price Target: $9.00
By: Les W. Childress
FX Energy Experienced Bizarre Trading and Stock Price Action Yesterday
January 11, 2007. FX Energy Inc. (NasdaqGM: FXEN) shares plunged to an intraday low of $4.64 down 24% to close at $5.83 on Wednesday. Year old well data on a dry hole posted in an Internet chat room may have contributed to the sell-off. We do not dismiss the possibility that market manipulation to aid short interest may have occurred. It will be interesting to see if regulatory officials feel the same. We maintain our Speculative Buy rating.
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George Foreman Enterprises Inc. OTCBB: GFMEE $3.50
Research Note
Industry: Consumer & Retail Products
Rating: Speculative Buy (Reiterated)
Price Target: $4.00
By: Gerald F. LaKarnafeaux, CFA
George Foreman Enterprises Has Filed an 8K Disclosure that Further Explains Its Late Filing of Its 10Q for the September 2006 Period
January 11, 2007. George Foreman Enterprises, Inc. (OTCBB: GFMEE) has filed an 8K that clarrfies the accounting dispute between its former and new auditing firms. The dispute has caused a delay in the filing of its 10Q for the period ending September 30, 2006.
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Gastar Exploration Ltd. AMEX: GST $1.96
Research Note
Industry: Oil, Gas & Energy
Rating: Strong Speculative Buy (Reiterated)
Price Target: $6.00
By: Richard R. Wolfe, CFA
Gastar Exploration Announces Another Bossier Drilling Success
January 11, 2007. Gastar Exploration Ltd. (AMEX: GST) announced January 9, 2007 that a its Williams-1 well in Leon County, Texas tested 32 net feet of apparent natural gas pay in three Middle Bossier sands at 17,000 feet.
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HydroGen Corp OTCBB: HYDG $4.65
Research Note
Industry: Oil, Gas & Energy
Rating: Speculative Buy (Reiterated)
Price Target: $8.25
By: Sally H. Wallick, CFA
Hydrogen Corp. Names Manager of Advanced Manufacturing.
January 9, 2007. Hydrogen Corp. (OTCBB: HYDG) named a Manager of Advanced Manufacturing with more than 27 years of chemical engineering and manufacturing experience. This appointment is HydroGen's latest move to strengthen its leadership, including the naming of a new member to the Company's advisory board in November 2006 and of three new outside directors in December 2006. We believe that these additions bring HydroGen significant management, financial, manufacturing and engineering experience, which should be invaluable as the Company expands its manufacturing operations and commercializes its hydrogen technology. We reiterate our Speculative Buy rating on HydroGen's shares.
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InkSure Technologies Inc OTCBB: INKS $2.09
Research Report
Industry: Electronics & Engineering
Rating: Speculative Buy (Reiterated)
Price Target: $3.50
By: Rafael K. Kapelinski
InkSure Technologies Speculative Buy Rating Maintained; An Attractive Growth Story With A Developing Second Leg Of Revenue Growth
January 16, 2007. We maintain our Speculative Buy rating on InkSure (OTCBB: INKS), as we believe that the current valuation has become incrementally more attractive following the recent decline in the share price. At the same time, we believe that the Company had a strong 4th Quarter 2006, and we are confident that our estimates remain conservative. The expectation of the Company's winning the Turkish national cigarette stamp tax project has been the single most powerful share price driver in the recent weeks. Also, at this stage, our forecast does not include any contribution from the RFID business until the end of 2007E. As a result of the strong momentum and following in-line Q3 2006 results, we upgrade our 2007 estimated sales forecast from USD 3.15 million to USD 3.62 million (+102% year on year). Again, should the Company announce the win of the Turkish contract, our estimates will have to be upgraded significantly thereafter. In our view, the call on the stock is simple: it is not exactly a value play, but it does have attractive growth potential and addresses an attractive market with a solution that delivers a very high ROI.
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InkSure Technologies Inc OTCBB: INKS $2.09
Research Note
Industry: Electronics & Engineering
Rating: Speculative Buy (Reiterated)
Price Target: $3.50
By: Rafael K. Kapelinski
Inksure Technologies: Reiterate Speculative Buy, Recent Weakness Unjustfied
January 11, 2007. InkSure Technology Inc.'s (OTCBB: INKS.OB) share price has been udner pressure recently. In our view, there have been no industry or company-specific events that would justify the recent volatility.
The expectation of the Company's winning the Turkish national cigarette stamp tax project has been the single most powerful share price driver in the recent weeks. While the Company is still anticipating the final decision, we believe that Inksure's chances of winning the contract are very strong. According to the Turkish press, Inksure has qualified to the second round along with two other competitors, including SIGPA. However, Inksure's relatively low price, a strong track record in Turkey, and an influential Turkish partner (MTM Security) make us optimistic about the Company's prospects.
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LJ International Inc. NasdaqNM: JADE $5.67
Research Note
Industry: Consumer & Retail Products
Rating: Speculative Buy (Reiterated)
Price Target: $5.40
By: Sally H. Wallick, CFA
LJ International: Management Reiterates Confidence in Long-Term Growth Prospects; Speculative Buy Reiterated.
January 12, 2007. LJ International Inc.'s (NasdaqGM: JADE) management presented at the Cowen & Co. 5th Annual Consumer Conference on Wednesday, January 10. Based on the information in the PowerPoint slide show used at the conference and a conversation with the Company's representative, we believe that management discussed growth strategies for the core wholesale business and the less mature, but rapidly expanding, retail business (ENZO) in China and reiterated confidence in LJI's long-term prospects. ENZO ended 2006 with 42 stores, up from 18 at the end of 2005, and we expect it to add another 35-40 stores in 2007. Beyond that, management's target is to have 100 ENZO stores by the time of the Beijing Olympics in the summer of 2008. Although we believe that ENZO was unprofitable in 2006, it achieved positive EBITDA and operating profit for the first time in the fourth quarter, and management expects ENZO to be profitable on a net, stand-alone basis by the end of 2007. Among other things, we believe that rapid revenue growth, the maturing of existing stores, and the leveraging of expenses as additional stores are opened in existing markets are contributing to ENZO's improving performance. We do not expect LJI to report fourth quarter and full-year 2006 earnings until late March, but believe that the Company may provide an update of this guidance prior to that earnings report. We rate LJI shares Speculative Buy.
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LJ International Inc. NasdaqNM: JADE $5.67
Research Note
Industry: Consumer & Retail Products
Rating: Speculative Buy (Reiterated)
Price Target: $5.40
By: Sally H. Wallick, CFA
LJ International Year-End ENZO Store Count of 42 Exceeds Target; On Track For 100 Stores By the Summer of 2008.
January 9, 2007. LJ International Inc.'s (NasdaqGM: JADE) retail division, ENZO, operated a total of 42 stores in Mainland China, Hong Kong and Macau on December 31, 2006. This total exceeded management's year-end target of 40 stores. The Company's longer term goal remains 100 ENZO stores in operation by the time of the Beijing Olympics in the summer of 2008. Based on preliminary results, ENZO achieved positive EBITDA and operating profit for the first time in the fourth quarter of 2006. Previously, management had set a goal of breakeven EBITDA by yearend 2006. By the end of 2007, management expects ENZO to be profitable on a net, stand-alone basis. We rate LJI shares Speculative Buy.
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LJ International Inc. NasdaqNM: JADE $5.67
Research Note
Industry: Consumer & Retail Products
Rating: Speculative Buy (Reiterated)
Price Target: $5.40
By: Sally H. Wallick, CFA
LJ International Presentation at Cowen & Co. Consumer Conference: Timely Opportunity to Update Investors on Progress in 2006 and Plans For the Future.
January 8, 2007. LJ International (NasdaqGM: JADE) designs, manufactures, distributes and markets a full range of fine jewelry and operates a rapidly growing chain of retail jewelry stores in China. LJI's Vice President, Sales and Marketing, Danie Tangchai, and Haris Tajyar, Managing Partner of Investor Relations International, will make a presentation at the Cowen & Co. 5th Annual Consumer Conference on Wednesday, January 10. The presentation is scheduled for 2 p.m. (EST) and will be Webcast live. We believe that this presentation will be a timely opportunity for an update on the Company's progress in 2006 and its plans for the future. Last year was highlighted by rapid expansion of the ENZO retail chain in China, improved retail sales performance and continued solid growth at the wholesale division. We rate LJI's shares Speculative Buy.
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Lime Energy Co. OTCBB: LMEC $0.91
Research Note
Industry: Oil, Gas & Energy
Rating: Strong Speculative Buy (Reiterated)
Price Target: $2.00
By: Richard W. West, CFA
Lime Energy Co. Announces Participation in Utah's HVAC Energy Efficiency Alliance; Reiterate Strong Speculative Buy Rating
January 10, 2007. On January 10, 2007, Lime Energy Co. (OTCBB:LMEC) announced that Pacific Corp's Rocky Mountain Power had chosen Lime Energy's operating companies, Parke Industries and Maximum Performance Group (MPG), to participate in Rocky Mountain's energy efficiency program. We reiterate our Speculative Buy Rating and our 12-month price target of $2.00 per share. Lime Energy Co.
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Maine & Maritimes Corporation AMEX: MAM $15.49
Research Note
Industry: Oil, Gas & Energy
Rating: Speculative Buy (Reiterated)
Price Target: $20.00
By: Sally H. Wallick, CFA
Maine & Maritimes Corporation: Share Ownership by Outside Directors Increases
January 9, 2007. Maine & Maritimes Corporation (AMEX: MAM): A portion of Maine & Maritimes' outside directors' fees is paid in the Company's shares. We view this program positively since it provides these directors with a steadily growing equity interest in the Company. Maine & Maritimes Corporation is a holding company for Maine Public Service Company, a regulated electric transmission and distribution utility, and unregulated businesses. We reiterate out Speculative Buy rating on Maine & Maritimes common.
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MortgageBrokers.com Holdings OTCBB: MBKR $0.80
Research Report
Industry: Banks, Financial Services & Insurance
Rating: Strong Speculative Buy (Initial)
Price Target: $1.50
By: Richard W. West, CFA
MortgageBrokers.com Strong Speculative Buy Rating In Initiating Coverage; Consolidation Of The Small And Medium Sized Enterprise (SME) Mortgage Brokerages
January 16, 2007. MortgageBrokers.com's (OTCBB: MBKR) business model is the consolidation of the small and medium sized enterprise (SME) mortgage brokerages into a scalable operating national network of branch retail offices that can better compete in the mortgage industry under one recognizable brand while eliminating long-standing industry issues of agent retention, equity ownership, and exit strategy. To attract mortgage originators, MortgageBrokers.com initiated its Broker Channel Acquisition Program in August 2005. Through this program, MortgageBrokers.com will be offering MortgageBrokers.com equity ownership to independent SME mortgage brokers by giving stock warrants dependent upon the volume or originations and time with MortgageBrokers.com. MorgageBrokers.com has executed an impressive fast start out of the gate. The fast rate of ramp-up in revenue should be increasing as the new mortgage originators from the recent partnerships begin working through the MortgageBrokers.com system. The management of MortgageBrokers.com is an experienced team of senior managers with many years of experience in the mortgage business. MortgageBrokers.com has exhibited the attributes of an attractive investment vehicle for capital appreciation.
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Midway Gold Corp. TSE-V: MDW $2.55
Research Note
Industry: Metals & Mining
Rating: Strong Speculative Buy (Reiterated)
Price Target: $3.75
By: Mike Niehuser
Midway Gold Expanding Spring Valley Gold Discovery in Nevada
January 11, 2007. Midway Gold Corp. (TSX Venture: MDW) announced additional drill results at its Spring Valley project near Lovelock, Nevada. The company completed 90 holes of about 20,300 meters in 2006 and plans a similar program in 2007. Of holes assayed, 68 of 72 contained gold mineralization, which may significantly expand the resource which is presently open along strike and depth. Midway has nine additional targets in this 38 km land package. We reiterate our Strong Speculative Buy rating.
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Midway Gold Corp. TSE-V: MDW $2.55
Research Note
Industry: Metals & Mining
Rating: Strong Speculative Buy (Reiterated)
Price Target: $3.75
By: Mike Niehuser
Midway Gold Corp. Rating Upgraded to Speculative Strong Buy
January 8, 2007. We have upgraded our rating for Midway Gold Corp. (TSX Venture: MDW) to Strong Speculative Buy from Speculative Buy. The upgrade follows our recent trip to Nevada and opportunity to discuss the company's recently announced acquisition of Pan-Nevada Gold Corporation (TSX Venture: PNV) with management of both companies. The combination of the two companies appears to result in a value greater than the sum of its parts.
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MediciNova, Inc. NasdaqGM: MNOV $13.23
Research Note
Industry: Healthcare, Biotechnology & Pharmaceutical
Rating: Strong Speculative Buy (Reiterated)
Price Target: $20.00
By: Wayne M. Lottinville, CFA
MediciNova Says Interstitial Cystitis Trial Fails To Meet Main Goal; Reiterate Strong Speculative Buy
January 16, 2007. MediciNova, Inc. (Nasdaq: MNOV) says that results from a late-stage trial of an experimental drug did not help patients with a bladder disorder but may benefit patients with asthma. The Phase 2/3 trial of its drug, MN-001, did not significantly improve the symptoms of interstitial cystitis, a condition characterized by inflammation of the bladder and urinary problems. However, the Company believes that the compound warrants continued development, especially in bronchial asthma where positive clinical trial results have been observed at higher doses.
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Memry Corporation AMEX: MRY $2.29
Research Note
Industry: Healthcare, Biotechnology & Pharmaceutical
Rating: Neutral (Reiterated)
By: Sally H. Wallick, CFA
Memry Corporation: Healthinvest Partners AB of Sweden Takes 5% Position in Memry Shares.
January 8, 2007. Memry Corporation (OTCBB: MRY): Healthinvest Partners AB of Sweden filed a 13G with the Securities and Exchange Commission on January 3, 2007 revealing that it owns approximately 5% of Memry common stock. Healthinvest Partners AB manages the Healthinvest Global Long/Short Fund, which invests in healthcare companies in the pharmaceutical, medical technology, biotechnology and healthcare services sectors. Since late November, the company has filed 13Gs revealing holdings of 5% or more in a number of healthcare companies in addition to Memry, including Bio-Imaging Technologies, Allion Healthcare, Arrhythmia Research, Enpath Medical, and IntegraMed America. We rate Memry's shares Neutral.
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National Coal Corporation Nasdaq: NCOC $5.15
Research Note
Industry: Oil, Gas & Energy
Rating: Strong Speculative Buy (Reiterated)
Price Target: $13.00
By: Richard R. Wolfe, CFA
National Coal Calls Off West Virginia Acquisition; Impact on Growth
January 9, 2007. National Coal Corp. (NasdaqGM: NCOC) announced on January 8, 2007 that it has terminated discussions to purchase a surface mining operation in West Virginia, a development that will have a substantial near-term impact on our forecast of the Company's rate of growth of assets and sales.
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Oragenics Inc AMEX: ONI $0.98
Research Note
Industry: Healthcare, Biotechnology & Pharmaceutical
Rating: Speculative Buy (Reiterated)
Price Target: $3.75
By: Wayne M. Lottinville, CFA
Oragenics Says Exercise Of All Outstanding Warrants From December 2005 Private Financing Round Raises $832,500; Reiterate Speculative Buy
January 16, 2007. Oragenics, Inc. (Amex: ONI), said that all outstanding warrants associated with its December 2005 private financing round have been exercised, bringing a total of $832,500 into the company. When combined with existing cash, this additional funding, reduced by a current monthly burn rate estimated at $160,000, is expected to result in the Company having sufficient funding to last through the third quarter 2007.
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On Track Innovations Ltd. Nasdaq: OTIV $7.28
Research Note
Industry: Computers, Technology & Internet
Rating: Strong Buy (Reiterated)
Price Target: $12.00
By: Rafael K. Kapelinski
On-Track Innovations (OTIV): Company Update, Reiterate Strong Buy
January 11, 2007. On TrackInnovations Ltd. (NasdaqGM: OTIV) remains a Strong Buy with a price target of $12.00 following our recent comprehensive Company update. In our view the market remains overly pessimistic about the Company's 2007E prospects, especially since the news flow about the contactless migration continues to be positive.
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On Track Innovations Ltd. Nasdaq: OTIV $7.28
Research Report
Industry: Computers, Technology & Internet
Rating: Strong Buy (Reiterated)
Price Target: $12.00
By: Rafael K. Kapelinski
On Track Innovations Strong Buy Rating And Price Target Of $12; In The Sweet Spot Of The Smart Card Market
January 8, 2007. We reiterate On Track Innovations' (Nasdaq: OTIV) Strong Buy rating and price target of $12.00 following both the 3Q 2006 results and recent acquisition of SuperCom's main assets. In our view, the recent decline in the share price primarily reflects concerns about the marked decline in the number of contactless cards issued by banks and credit card companies. We would like to argue that the slowdown is temporary and we should be seeing a marked acceleration in the speed of contactless card rollouts in 2007E. National IDs and passports are areas of massive implementations, where places like the United States, China and Europe have sufficiently large populations to generate demand for contactless technology in the long term. Also, we believe that the fast speed of the ongoing infrastructure rollouts bode well for the long-term secular growth of the market.
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Pacific Ethanol, Inc. NasdaqNM: PEIX $15.15
Research Note
Industry: Oil, Gas & Energy
Rating: Strong Speculative Buy (Reiterated/Update)
Price Target: $28.50
By: Paul J. Resnik, CFA
Pacific Ethanol Announces New Debt Financing; Strong Speculative Buy Rating Reiterated
January 12, 2007. On January 11, 2007, Pacific Ethanol (Nasdaq: PEIX) announced that it had signed a commitment letter providing for up to $325 million of senior secured credit. The loan facility will include up to $300 million in a senior secured construction and term debt facility, which will be used to recapitalize the Company's Madera California ethanol plant, to provide take-out financing on the completion of the Company's Boardman Oregon ethanol plant, and to provide both construction and term financing for three additional ethanol plants that the Company has under development. In addition, the loan will include a working capital and letter of credit facility of up to $25 million. The closing of the loan facility, which is subject to final documentation and a number of contingencies, is expected to occur in the first quarter of 2007. We would note that the equity portion of the plant financings is already in place. We continue to rate Pacific Ethanol a Strong Speculative Buy.
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PacificHealth Laboratories Inc. OTCBB: PHLI $1.40
Research Note
Industry: Healthcare, Biotechnology & Pharmaceutical
Rating: Speculative Buy (Reiterated)
Price Target: $2.00
By: Jonathan H. Ziegler, CFA
Pacific Health Labs Advises of Private Stock Transaction
January 11, 2007. Pacific Health Laboratories, Inc. (OTCBB: PHLI) disclosed that Hormel Health Labs, LLC has sold all of its 909,091 shares in a private transaction, of which approximately one-third were purchased by insiders. We continue to rate these shares a Specualtive Buy.
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Provectus Pharmaceuticals Inc OTCBB: PVCT $1.20
Research Note
Industry: Healthcare, Biotechnology & Pharmaceutical
Rating: Strong Speculative Buy (Reiterated)
Price Target: $3.90
By: Wayne M. Lottinville, CFA
Provectus Receives Orphan Drug Designation from FDA for Anti-Cancer Agent PV-10 for the Treatment Of Metastatic Melanoma; Reiterate Strong Speculative Buy
January 8, 2007. Provectus Pharmaceuticals, Inc. (OTCBB: PVCT), announced that its leading anti-cancer agent, PV-10, has received orphan drug designation by the FDA for the treatment of metastatic melanoma. Provectus is nearing completion of its 20-subject Phase 1 clinical study of the safety and efficacy of PV-10, an injectable formulation of Rose Bengal also known as Provecta™, for the ablation of metastatic melanoma, an aggressive and often fatal form of skin cancer. Provectus expects to commence a pivotal Phase 2/3 study of the efficacy of PV-10 in the treatment of metastatic melanoma shortly thereafter.
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Quest Oil Corporation OTCBB: QOIL $0.03
Research Note
Industry: Oil, Gas & Energy
Rating: Avoid (Reiterated)
Price Target: N/A
By: Richard R. Wolfe, CFA
Quest Oil Corp: Termination of Coverage
January 8, 2007. We are terminating our coverage of Quest Oil Corp due to the absence of current financial information and the Company's impending delisting from Nasdaq. In particular, in an SEC 8-K filing on December 21, 2006, Quest cited a "Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard" which is the basis for our decision to terminate coverage.
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Shumate Industries, Inc. OTCBB: SHMT $2.00
Research Note
Industry: Oil, Gas & Energy
Rating: Strong Speculative Buy (Reiterated)
Price Target: $3.00
By: Richard R. Wolfe, CFA
Shumate Announces Progress with High-End Valve Application; Appoints Prominent New Director
January 11, 2007. Shumate Industries Inc.'s dual announcements of January 11, 2007 amount to another strong indication of momentum building behind its new valve technology. The Company disclosed that Phase I of its high-end valve development agreement with At Balance Americas, LLC has concluded. In addition, Frank Jungers, retired chairman and CEO of ARAMCO, has been added to Shumate's Board of Directors.
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Apex Silver Mines Ltd AMEX: SIL $13.18
Research Note
Industry: Metals & Mining
Rating: Neutral (Reiterated)
By: Mike Niehuser
Apex Silver Mines impacted by Bolivian Mining Minister's Comments
January 11, 2007. Apex Silver Mines Limited (AMEX: SIL) was impacted by comments by the Bolivian Mining Minister. He expressed a desire for a six-fold increase in taxes on mining companies, which rattled investors. The comments appeared to be political in nature to set the stage for negotiating a solution with workers, the government, and foreign companies to provide reform and stability for the nation's economy.
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Sky Petroleum, Incorporated OTCBB: SKPI $0.66
Research Note
Industry: Oil, Gas & Energy
Rating: Strong Speculative Buy (Reiterated)
Price Target: $2.35
By: Richard R. Wolfe, CFA
Sky Petroleum: Second Lifting for H2 Well Production; Further Delay in Arrival of Jackup Rig
January 10, 2007. On January 9, 2007, Sky Petroleum Inc. (OTCBB: SKPI) announced two key developments, the first being the second lifting of volumes attributable to the Company's new H-2 well in Crescent Petroleum's Mubarek Field offshore Dubai, and the second being the news of a further and somewhat more lengthy delay of the spud date for the Company's second Mubarek well, designated K2-ST3.
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Sunwin International Neutraceuticals, Inc. OTCBB: SUWN $0.63
Research Note
Industry: Healthcare, Biotechnology & Pharmaceutical
Rating: Speculative Buy (Reiterated)
Price Target: $1.10
By: Stanley Ng
Sunwin International Neutraceuticals Doubles Stevia Production Capacity With Completion of New Manufacturing Facilities; Reiterate Speculative Buy Rating
January 10, 2007. Sunwin International Neutraceuticals (OTCBB: SUWN.OB) announced on January 9, 2007 that it has completed construction of its new stevia manufacturing facilities. The new facilities are capable of producing an additional 300 tons of premium Stevia per year. We reiterate our price target of $1.10 and Speculative Buy rating on the stock.
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American Telecom Services, Inc. AMEX: TES $4.05
Research Note
Industry: Telecommunications
Rating: Strong Speculative Buy (Reiterated)
Price Target: $9.00
By: Joe Noel
American Telecom Services Today Announced More Than 30 New Handset Products at CES; Reiterating Strong Speculative Buy Rating
January 8, 2007. American Telecom Services Inc. (AMEX: TES) announced more than 30 new telephone handset products prepackaged with prepaid long-distance and voice over IP services at the consumer electronics trade show which starts today in Las Vegas. We reiterate our Strong Speculative Buy rating on the shares. We are expecting a strong December Quarter to be reported soon.
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Top Image Systems Ltd Nasdaq: TISA $3.92
Research Note
Industry: Software
Rating: Buy (Reiterated)
Price Target: $5.00
By: Rafael K. Kapelinski
Top Image Systems Lands Office Depot Contract; Reiterate Buy Rating and Price Target of $5.00
January 16, 2007. Top Inage System Ltd. (NasdaqCM: TISA) has just announced a very significant contract with Office Depot in the Netherlands. Importantly, we believe that the follow-on opportunities for TISA are very significant. Other Office Depot centers in Europe are likely to adopt the system over time. In the longer term, as has often been the case, the Company is very likely to be able to upsell an increasing number of applications. We reiterate our Buy rating and price target of $5.00.
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Top Image Systems Ltd Nasdaq: TISA $3.92
Research Note
Industry: Software
Rating: Buy (Reiterated)
Price Target: $5.00
By: Rafael K. Kapelinski
Top Image Systems: Update on the Strategy in Japan, Reiterate Buy and Price Target of $5.00.
January 9, 2007. Top Image Systems Ltd. (NasdaqCM: TISA) should experience significant upside in 2007E, in our view. This is expected to come from Japan, where the Company is making steady progress in increasing the software sales content and winning new customers. We estimate Japan's contribution to 2007E revenues at approximately $5-$6 million.
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Telkonet Inc AMEX: TKO $2.92
Research Note
Industry: Telecommunications
Rating: Strong Speculative Buy (Reiterated)
Price Target: $5.00
By: Richard W. West, CFA
Telkonet, Inc. to Begin Deploying Broadband Network Access for Department of the Navy; Reiterate Strong Speculative Buy
January 10, 2007. Telkonet, Inc. (AMEX:TKO) will begin deploying its government-certified Telkonet iWire System for use by the Department of the Navy (DoN) later this month. Telkonet's revenue should begin to ramp up during the balance of 2007 and on into 2008. After six months of testing and evaluation, the DoN certified Telkonet's system for use across the 500,000-user Navy Marine Corps Intranet (NMCI) enterprise environment. We reiterate our Strong Speculative Buy and the recently set 12-month price target of $5.00 per share.
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Telkonet Inc AMEX: TKO $2.92
Research Note
Industry: Telecommunications
Rating: Strong Speculative Buy (Reiterated)
Price Target: $5.00
By: Richard W. West, CFA
Telkonet, Inc. Announces Contract With U.S. Patent Office; Strong Speculative Buy Reiterated
January 8, 2007. Telkonet, Inc. (AMEX:TKO) announced a $200,000 contract with the United States Patent and Trade Office (USPTO) to support the USPTO with the enhancement and upgrade of Telkonet's IT infrastructure and related networking apparatus. Telkonet is increasing penetration into the U.S. Government, as evidenced by the contract with the USPTO. We reiterate our Strong Speculative Buy and the recently set 12-month price target of $5.00 per share.
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Telanetix, Inc. OTCBB: TNXI $1.65
Research Note
Industry: Electronics & Engineering
Rating: Strong Speculative Buy (Reiterated)
Price Target: $5.00
By: Joe Noel
Telanetix Announces Important Contract With Mercedes-Benz USA - Reiterate Purchase Recommendation
January 16, 2007. Telanetix Inc. (OTCBB: TNXI) announced today an important win with Mercedes-Benz USA. We believe the company is well positioned to meet our $8.5 million revenue expectation and our $0.17 EPS projection for the year. Shares of Telanetix are trading at only 10X the projected 2007 EPS, which we believe is a bargain. We believe Telanetix is worth significantly more than its current $24 million market cap when compared to Hewlett-Packard, Cisco Systems, Polycom and other videoconferencing players.
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XAAR Plc LSE: XAR $4.71
Research Note
Industry: Computers, Technology & Internet
Rating: Buy (Change)
Price Target: $6.15
By: Rafael K. Kapelinski
Xaar is Being Downgraded to Buy on Share Price Strength
January 9, 2007. We downgrade Xaar Plc (LSE: XAR) from Strong Buy to Buy on the recent strength in the share price. At the same time we maintain our price target of $6.15, which leaves 26% upside from the current levels. The recently published positive trading update confirmed that the Chinese woes were over and the Company was on track to either meet or beat consensus estimates.
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Qiao Xing Universal Telephone, Inc. NasdaqNM: XING $14.47
Research Report
Industry: Telecommunications
Rating: Strong Buy (Change)
Price Target: $20.24
By: Stanley Ng
Qiao Xing Universal Telephone Raised To Strong Buy Rating; Positive Factors, Along With The Improvement In Margins, Has Prompted Us To Significantly Raise Our EPS Forecasts
January 16, 2007. Qiao Xing Universal Telephone (Nasdaq: XING) is one of China's largest manufacturers and distributors of telecommunications products. Towards the end of December 2006, the Company started to release detailed quarterly financial statements, which will help improve corporate transparency and enable institutional investors to better assess the Company's attractive prospects. Even though net revenues for the first three quarters of FY2006 were lower than our expectations, we are happy to see significant improvement in gross, operating and net margins. This positive trend should extend into FY2007. In November last year, the Company completed the acquisition of the remaining 20% equity in Qiao Xing Mobile Communication Co. Ltd. and thus raised its effective interest in CECT (its mobile handsets operation) from 74.7% to 93.4%. These positive factors, along with the improvement in margins, had prompted us to significantly raise our EPS forecasts for FY2007 by 16.1% from $2.18 to $2.53. Based on our new EPS estimates for FY2006 and FY2007, we have raised our 12-month price target for the Company from $17.44 per share to $20.24 per share, at which the stock is trading at 12.9 times P/E for FY2006 and 8.0 times for FY2007. With more than 50% upside potential and improving earnings outlook for the Company, we upgrade our Buy rating to Strong Buy.
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Information, opinions or recommendations contained in this research report or research note are submitted solely for advisory and information purposes. The information used and statements of fact made have been obtained from sources considered reliable but we neither guarantee nor represent the completeness or accuracy. Such information and the opinions expressed are subject to change without notice. This research report or note is not intended as an offering or a solicitation of an offer to buy or sell the securities mentioned or discussed. Neither the Firm, its principals, nor the assigned analysts own or trade shares of any company covered. The Firm does not accept any equity compensation. Anyone may enroll a company for research coverage, which currently costs US $39,500 prepaid for one-year. Reports are performed on behalf of the public, and are not a service to any company. The analysts are responsible only to the public, and are paid in advance to eliminate pecuniary interests and insure independence. Please read full disclosure and other reports and notes on the Company at www.DuttonAssociates.com.
The views expressed in this research report or note accurately reflect the analyst's personal views about the subject securities or issuer. Neither the analyst's compensation nor the compensation received by Dutton Associates is in any way related to the specific recommendations or views contained in this research report or note.
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