SubscribeIBKR plus FEAR = Buying Opportunity
March 17, 2008
Interactive Brokers (IBKR) is part of the investment brokerage sector which was trashed and left for dead today after the MF Global (MF) news broke. Monday, the news was not pretty and has taken our some of the quality with the crap. But some of the reason’s behind this stock’s
movement is unclear. With MF Global (MF) was in a virtual free fall and that prompted concern over the entire group, investors are obviously taking their hands off their keyboards and throwing them into the air. Simply, the support (or stomach) HAS LEFT THE BUILDING.
Since FEAR is also an acronym for FALSE EVENTS APPEARING REAL, the real and rumored information surrounding Bear Stearns (BSC) and MF Global today is spreading concern toward any company with market-making operations. The perception is that if there is a cold spreading, the entire sector will catch the flu. This is good news for patient, long term investors.
IBKR does have a market making operation which helps to bring in revenue. Annually, revenue is primarily comprised of 1) trading gains 2) commissions/execution fees 3) interest income. In other words, they are a broker and market-maker. The fear within this sector is that these types of companies have been caught with a huge pile of something toxic that will implode which will then force them to take a huge loss. Yet, in our discussions today with analysts, it does not seem to be Read more
Sanderson Farms: Set up to Move
March 11, 2008
There is a good deal of quacking about looking and walking like ducks these days. So why not cluck instead, if only for some relief.
During the past several week, I have been looking closely at opportunities within this decrepit excuse for a stock market. That has lead towards a simple thesis: There is clearly a shift in mentality towards commodities and pressure is building towards another bubbling. That lead to the next obvious question: How to profit?
One particular food commodity has seen a significant move recently: CORN. The same corn that is used for production of ethanol and the same corn that is used to feed chickens. There is a clear inverse relationship that has emerged between corn pricing and the share prices of some of the poultry producers. Sanderson Farms (SAFM) is the one from this sector that seems to have an opportunity to move higher, once the realization that corn prices have a built-in ceiling. That ceiling is created by the need for corn prices to stay within reasonable limits in order to appease the ethanol producers and to maintain reasonable poultry prices.
Sure, I know what you are thinking….Our government and the oil giants (one and the same actually) could give a damn and don’t care if ethanol is priced out of the market. But, in truth, they want to keep the appearance of an alternative fuel for the future, just as much as many of us wish to have an alternative. Beyond the basic premise that corn prices affect the Read more
DNDN: Studies are impressive - AGAIN!
February 14, 2008
It is one day after the House Energy and Commerce Committee sent a declination letter to the four Congressmen that had been requesting a further review of the questionable FDA ruling for Dendreon’s (DNDN) Provenge, the company’s groundbreaking Prostate cancer drug. Now, a news release shows another beneficial study result that should have the FDA looking even more ridiculous.
According to the HSE Committee, represented by Chairman John Dingell (D-MI) writes, “An investigative hearing prior to an agency’s final decision runs the risk of interfering with the normal regulatory process.” (CLICK FOR LETTER)
The news looks promising. But realize, so did the last report, and the one before that as well.
SEATTLE and SAN FRANCISCO, Feb 14, 2008 /PRNewswire-FirstCall via COMTEX/ — Researchers from Dendreon Corporation (Nasdaq: DNDN) today presented data demonstrating the correlation of a measure of the cumulative potency of PROVENGE (sipuleucel-T), an investigational active cellular immunotherapy for hormone-refractory prostate cancer, with overall survival. This the first time that an association between higher potency of an active immune therapy and increased patient survival has been reported. The correlation appeared to be independent of other important baseline prognostic factors.
The abstract (#21), “Cell Number and CD54 Expression in Sipuleucel-T correlate with Survival in Metastatic Androgen Independent Prostate Cancer,” is being presented at the American Society of Clinical Oncology’s 2008 Genitourinary Symposium in San Francisco.
In two Phase 3 trials, D9901 and D9902A, researchers evaluated cumulative product release parameters of PROVENGE, including CD54 upregulation (a measure of product potency defined as the increase of CD54 molecules expressed on antigen Presenting Cells [APC] after incubation with the PROVENGE Antigen Delivery Cassette(TM)) and the number of total nucleated cells (TNCs) among patients treated with sipuleucel-T (n=146). CD54 is a costimulatory molecule which serves as a marker for APCs. Its expression is increased when APCs become activated and this upregulation of CD54 serves as a potency release
assay for PROVENGE.Results showed that PROVENGE patients experienced improved survival if they received more cells across the three doses of PROVENGE (higher cumulative TNC count (p=0.019)) or higher cumulative CD54 upregulation values (p=0.009). The effect on survival for TNCs appeared to reflect in part the patients’ baseline prognostic factors. However, the CD54 upregulation ratio appeared to be an independent predictor of survival in patients who received PROVENGE, as the correlation remained strong even after adjusting for baseline prognostic factors (p=0.022).
“We have been able to show a correlation between patient survival and a measure of the cumulative potency of PROVENGE; such a correlation between product potency and clinical outcome has not been previously demonstrated with an active immunotherapy,” said Mark Frohlich, MD, chief medical officer of Dendreon. “These data provide further evidence that sipuleucel-T is actively engaging the immune system in a clinically meaningful way that prolongs
patient survival.”
Disclosure: Horowitz & Company Clients are LONG DNDN
Yahoo! and AOL to Merge?
January 29, 2008
Just for fun…. Click the video below and ask yourself if something looks a touch familiar about of the AOL and Yahoo! sites. Click it over and over.
With all of the problems that both companies have encountered (GOOGLE) and the competition they endure (GOOGLE), it would be of great benefit to look towards a consolidation rather than a fight. Aside from the graphic similarities, there is a great deal of overlap between both of these companies.
In their earnings announcement, Yahoo Inc. (YHOO) reported a drop in quarterly profit on Tuesday and its shares fell nearly 7 percent as Chief Executive Jerry Yang predicted a tough 2008 amid a weakening U.S. economy.
“While we will continue to face headwinds this year, we believe that the moves we are making will help us exit 2008 stronger and more competitive and return to higher levels of operating cash flow growth in 2009,” Yang said in a statement.
The article continued to explain, “Yahoo’s larger share of the display market makes it more vulnerable to any spending pullbacks in a recession. Analysts expect key rival Google Inc (GOOG) may fare better in a downturn with its dominance of paid search listings, a form of advertising that is viewed as more closely tied to sales.”
News outlets are not impressed with Yahoo! results either:
Yahoo net drops as reorganization stays in focus
at MarketWatch (Tue 5:00pm)
Yahoo 4Q Earnings Fall Over 23 Percent
AP (Tue 4:59pm)
Yahoo Q4 In Line; Q1, ‘08 Outlook Light; Stock Slumps
at Barron’s Online (Tue 4:53pm)
Yahoo disappoints investors again
at CNNMoney.com (Tue 4:49pm)
Another flop at Yahoo!
at Fortune (Tue 4:44pm)
To the Yahoo! an AOL team: DO SOMETHING! ANYTHING EXCEPT WHAT YOU HAVE BEEN DOING! Shareholders are losing out because of your stubbornness. Be brave, be daring and think of the little ant that moved that rubber-tree plant. You can do it…!
Disclosure: Horowitz & Company clients do not hold positions in stocks mentioned as of the publish date.
Profitable Resolutions for the New Year
December 31, 2007
It seems that the commitment made to resolutions each New Year is such a common pastime that the United States government actually has a web page dedicated to the “Top New Year’s Resolutions.” According to the “government-made-easy” site (www.usa.gov), there are a dozen or so popular resolutions that we seem to revisit year after year. This year, think about taking those same resolutions and applying them to your investments and finances. Here are a few ideas for The Disciplined Investor:
Lose Weight – Put your investment portfolio on a diet! In other words, get rid of the fat and keep it off! Look carefully through the list of your investments. Do you have stragglers that you are keeping just because they have been there for years? There is no better way to clean up AND rebalance a portfolio than getting rid of non-performing positions. Make a list of the stocks, bonds and mutual funds that do not seem to meet your investment objectives. Be critical and maybe even a bit brutal and cut out the unnecessary load.
Pay Off Debt – Be careful not to over-borrow. While margin can be utilized for good reason, it is not appropriate for most investors. Make sure that your accounts are free from margin debt and commit to paying down any outstanding loans. Close positions that have been bought on borrowed money. If you have been accessing the margin features of your brokerage accounts to pay down bills…DON’T!
Save Money – It is time to stop paying high commissions and fees. There is no reason for anyone to be paying the high costs associated with front- or back-end loaded mutual funds. Of course, even with no-load funds, the managers Read more
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