24/7 Wall Street reports on companies making moves for the week of June 9 to 13.
Biotech
MiddleBrook Pharmaceuticals (NASDAQ: MBRK, Stock Forum) posted complex financial results this quarter, although the market didn’t mind – the share price went up 15% Friday alone. The company has enlisted Morgan Stanley to find a partner or buyer, and without a buyer, MBRK shares won’t last at this level.
Intuitive Surgical’s (NASDAQ: ISRG, Stock Forum) stock is under fire. Although it was defended in a recent analyst call, the stock has fallen from a high of $350.59 to $270 – approximately one-quarter of its value. This tends to happen to companies that make a 20-fold run in only a few years.
Alfacell Corp.’s (NASDAQ: ACEL, Stock Forum) stock price has dropped significantly lately, after its ONCOCASE Phase III study failed to meet the primary endpoints in mesothelioma, a type of cancer almost always caused by exposure to asbestos. However, the company’s second endpoint was more promising, and a partnership with Par Pharmaceutical (NYSE: PRX, Stock Forum) might lead to Par buying the company out.
Inspire Pharmaceuticals (NASDAQ: ISPH, Stock Forum) will have to do more to defend its new, higher stock price. Although it rose 35% last week, some negative comments about the company’s late-stage cystic fibrosis treatment have caused some concern.
Oil and gas
Concho Resources (NYSE: CXO, Stock Forum) bought Henry Petroleum’s energy holdings in Texas and New Mexico, and the market reacted – the company’s stock price jumped 11% and hit a new 52-week high. Shareholders will be rewarded if the company does even reasonably well.
Goodrich Petroleum Corporation (NYSE: GDP, Stock Forum) is trading near its 52-week high, and the company just announced the acquisition of shale oil assets in Texas. Since shale oil is becoming an attractive alternative to crude, the company is in a good position to move up.
Georesources (NASDAQ: GEOI, Stock Forum) has been in the spotlight recently, but not always for good reasons. The company announced it will dilute everyone with a private placement, which did not go over well when the shares went for 20% less than the market price. However, if the company can post a quarter like Q1, shareholders will probably forgive it.
Telecom
MRV Communications (NASDAQ: MRVC, Stock Forum) saw its share price plunge 24% after it announced that it told the SEC it may restate results due to a stock option probe. The company trades at 50% of sales, not much for the tech sector. Shareholders will have to decide if the company is worth holding onto in the face of a possible accounting investigation.
Even though Focus Media (NASDAQ: FMCN, Stock Forum) beat expectations when it posted its earnings last week, Wall Street doesn’t trust its guidance issues “from the earthquake”. Shareholders aren’t likely to give the company a break over revenue being tied to the earthquakes in China.
Level 3 Communications (NASDAQ: LVLT, Stock Forum) closed up over 20% last week, due mainly to hype in the stock from CNBC. This stock is still going to be a volatile low-priced speculator stock for the foreseeable future, and one to hold onto for now.
Newspaper publishing
The latest victim of rising oil prices is Lee Enterprises (NYSE: LEE, Stock Forum). While the newspaper industry has been sagging as of late, industry experts are beginning to realize that the projected 5% drop could increase to 10% or even 15% as the economy worsens. Add to the mix the high price of oil, which is used in printing, and the situation could get worse before it gets better – if it does get better.
Gatehouse Media (NYSE: GHS, Stock Forum) seems to have two options by the end of the year: be broken up or enter Chapter 11. The company’s shares are off 80% from last year, 30% more than the industry leader. It has a huge dividend that will almost certainly need to be eliminated – taking away the only good reason to hold onto the shares.
Retailers
Insiders have been selling shares in Big Lots (NYSE: BIG, Stock Forum) and it is yet to be seen if this will impact the stock price. At $30.65, the stock is almost double its 52-week low and the company saw good results for Q1 2008. But insider selling can have an effect on even the best of companies.
Consumer goods
Del Monte (NYSE: DLM, Stock Forum) has traded down following the commodity price spike and its exposure to gas prices will continue to be a hindrance. The company is a perfect investment for speculators who think energy and commodity costs will drop.
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