The upward momentum has increased even further. The volumes over the last few days have been extremely high. Nearly 29 million shares have been traded in the last two days, and some consider this part of a short squeeze. There were 35 million shares (22% of the float) short on September 30, and the price on that date was $8.81. So the stock has moved nearly 40% over the last couple of weeks. The announcement about investment in Zebra Biologics has increased the excitement, and even Dr. Frost has continued to acquire shares consistently, though in small quantities. As mentioned in an article on SA, people are skeptical about whether the announcement of Zebra Biologics actually played a significant role in the move. The undisclosed investment appears to be speculative as Zebra is into development of next generation antibodies. It may take years before this technology can be commercialized to contribute meaningfully to OPKO's top or bottom line. So ultimately, this move can be traced to the power of Dr. Frost. Frost now controls more than 152 million shares of OPKO Health out of the outstanding 403.6 million shares (37.7%). His investment in Biozone Pharmaceuticals (BZNE), which owns the high potential drug delivery technology QuSomes, and the agreement between OPKO and Biozone, has made a lot of news. The acquisition of PROLOR Biotech, and several other investments over the last couple of years have helped the stock post remarkable gains. Again, many of these investments may take time to help improve the financial position of the company. The valuations are surely exceptionally high. The price to sales is nearly 50, and the price to book is also extremely high. For those who want to invest on valuations, it is not so convincing. However, if the squeeze gets tighter, then it is possible for the stock to go even higher.
The correction in gold has run deeper than expected, but now it is very close to the strong support of $1200. The possibility of rebound is high, and the better valued stocks can be considered for long term investment. The best part about Iamgold is the dividend yield. Presuming that gold rebounds, these levels may appear extremely attractive in hindsight. Investors are already at 6% yield when they buy the stock. The high probability of rebound adds to possibility of capital appreciation. Iamgold is now trading at less than half its book value, and despite the adverse price scenario, has been able to achieve a net profit margin of 6% on a ttm basis. The operating margins are nearly 25%. The debt of $639 million is also not too bad if one considers the cash of $368 million. The trailing P/E is 17 and the forward P/E is around 15. The price to sales is around 1. The problem is the cost of production. At $1134 per ounce, the all-in-sustaining costs are high compared to many peers. For IAG, the costs increased 10% on a yoy basis in Q3. There are even some development stage companies with lower expected cost of production like Pershing Gold (PGLC). IAG is on track to achieve the targeted cost savings, and the impact may be more prominent in the forthcoming quarters. The company had announced a $100 million cost-reduction program at the beginning of the year. The target was for reduction in operating costs by $54 million, exploration expenditures by $40 million and corporate general and administrative costs by $6 million. The company has achieved 77% of planned reductions by the end of Q3 with savings of $38 million in Operations, $35 million in Exploration and $4 million in Corporate. So the company seems to be taking the right steps, and appears to be a good bet at current levels. However, gold needs to hold and rebound.
Senesco will make two presentations on SNS01T for blood-borne cancer care at the 55th American Society of Hematology (ASH) Annual Meeting and Exposition to be held from December 7-10. It will provide an update on the current results of the Phase 1b/2a trial. It will also make an oral presentation of new results with SNS01-T in non-clinical studies. The abstracts to be presented include “Phase 1b/2a Open-Label, Multiple-Dose, Dose-Escalation Study To Evaluate The Safety and Tolerability Of Intravenous Infusion Of SNS01-T In Patients With Relapsed Or Refractory Multiple Myeloma, Mantle Cell Lymphoma, Or Diffuse Large B Cell Lymphoma" and "SNS01-T Exhibits Significant Anti-Tumoral Activity In Models Of Multiple Myeloma and Non-Hodgkins B Cell Lymphoma and Induces Cell Death In Malignant But Not Normal B Cells". In case the results come in better than expected on the safety & efficacy fronts, then the stock could start a sustainable upward movement. The results in the pre-clinical trials were extremely encouraging, and the cohort 1 & 2 results were also good. However, the dose in cohort 3 and 4 are much higher, and hence it will be interesting to note the tolerance by the patients and the associated side effects. The efficacy is likely to be better at higher doses, but tolerance / side effects will hold more importance than before. Analysts have pointed out that the stock is undervalued compared to other development stage companies. The fact that insiders have put in money in the company at a much higher price than the current market price of the stock indicates their confidence. Chairman Harlan Waksal's investment at $26 is significant as he has the relevant experience in the biotech sector to understand the potential of SNS01T. He is surely confident of the prospects.
The stock has been in the news recently. A couple of Articles on seekingalpha have expressed positive opinion about the future prospects of the company. Chairman Harlan Waksal's faith in the company is one of the reasons for analyst confidence. He had purchased the company's stock at $26/share in 2012, and has personally secured a $3 million credit line for the company. This investment indicates that he is confident about the future prospects of the company's development stage drug candidate SNS01T. He has a successful track record, and his opinion needs to be given due consideration. Waksal is the co-founder of Imclone, which he had sold to Eli Lilly (LLY) for $6.8 billion. Another director, Christopher Forbes, had also acquired the company's stocks at the same price. Insider purchases signal their optimism about the future. Results in preclinical trials, and cohort 1 & 2 (multiple-myeloma patients) were encouraging. Cohort 2 results were declared in June, and cohort 3 results are expected in a few weeks. The cohort 3 results may lead to a positive reaction if the results are good. The market may begin to value the stock at much higher levels. SNS01T has use in other indications like inflammation and ischemia. Senesco owns numerous patents related to its drug candidate, with applications in agriculture (increasing crop yield), programming of cell death etc. However, the drug candidate has two to three years to go before it receives FDA approval. The trials will require funding from time to time to take the research forward. There is intense competition in the field, though the size of the market also provides a huge opportunity. Like many development stage biotech companies, the risks of investment are relatively high, but the reward is also likely to be commensurate. As mentioned in one SA article, Cohort 3 results could be the near term catalyst.
The last few days have seen the stock rebound with slightly higher volumes. It had corrected after making its 52 week high in early September. It has appreciated 464% in 2013, and 393% on a 52 week basis. The merger with TransEnterix has boosted the sentiments, and the support of Dr. Frost is also one major factor responsible for increased investor interest. The company had raised $30.2 million just before the merger, with TransEnterix contributing 65% or $19.7 million, and Dr. Frost and other investors putting in the balance 35% or $10.5 million. The money has increased the prospects of the combined company. Both SafeStitch and TransEnterix will benefit from stronger finances and also from the expected synergies. Resources are critical for companies at this stage, and backing of Dr. Frost can help them get more capital from time to time. He has the resources and experience to help the company explore partnerships with other investors. Frost is on TransEnterix's board, and is also heading huge companies like Teva (TEVA) & OPKO Health (OPK). He explores synergies between his companies. Recently, MusclePharm, where he has a stake, invested in his company Biozone Pharmaceuticals (BZNE). Biozone owns the high potential proprietary drug delivery technology QuSomes, and MusclePharm can benefit from the technology to increase efficacy of its supplements. For TransEnterix, the merger can speed up the development of flexible minimally invasive surgical technologies, and SafeStitch can develop its robotic system SurgiBot and other products. It is important to remember that the benefits of the merger will take time to translate into numbers. The stock has already moved up quite a bit to factor a lot of the future positives. The sharp move has increased the possibility of corrections. So one can tag along, but with a clear stop loss in mind.
Gold has remained weak and is unable to make decisive positive moves. Till that happens, the nervousness will continue. It is possible that the sluggishness will continue for a long time. Pershing hired an engineering consultant to update several key permits for the mine. CEO Alfers stated that the expertise of the consultants will help Pershing optimize the design of the expanded mine and secure the required permit modifications. Most importantly, Alfers stated that Pershing is well situated to become Nevada's next new gold producer because the company already has a fully constructed and permitted gold recovery facility for its gold resources. The company is poised for fast-track resumption of gold production with only modest capital expenditures to re-start the entire operation. The reaction of the stock to this news was muted, but one cannot ignore the fact that the company has obtained the necessary funding for getting close to production, and is declaring that it is going to start production soon. The insiders are putting in money regularly, and Barry Honig has acquired more than 1.1 million shares in last two months alone. Out of this, 425,000 shares were purchased during last week. Its cost of production is expected to be extremely low, so even the current price scenario is not too bad for the company. Many analysts have calculated the expected cash flow in case the company is able to produce 50K ounces as per plan. However, the company has not come out with a time frame for start of production. That is very much required so that one knows the anticipated schedule. That announcement will be a positive trigger for the stock. In any case, gold has to do better than what it has done so far otherwise the mood will remain circumspect. It needs to move beyond $1350 to indicate that the correction is getting over.
The merger has improved the sentiments for SafeStitch dramatically, but it is important to keep in mind that the stock has already run up quite a bit. The merger may have great prospects, but translation of that into real dollars may take some time. The stock has already delivered exponential returns to the investors over the last few months. It has doubled in one month, and it has appreciated by nearly 500% on a ytd basis. Recent movement in the stock is linked to the announcement of the merger with TransEnterix. Billionaire investor Dr. Phillip Frost, who has a significant stake in SafeStitch, will be on the board of the combined entity. SafeStitch raised more than $30 million in a private placement, with TransEnterix investors contributing 65% and SafeStitch investors (including Dr. Frost) putting in 35%. With the funding, TransEnterix will be able to build upon its ability to bring flexible minimally invasive surgical technologies to market and develop its robotic system SurgiBot(TM). As mentioned in an article on SA, the merger will give Safestitch the necessary resources to continue developing devices and to begin marketing them. The most reassuring part of the deal is the active interest of Dr. Frost, who is known as an astute investor in the pharma / medical devices sector. He actively explores synergies between the companies where he has stake. For example, his company OPKO Health (OPK) is working with Biozone (BZNE), another of his companies, to use Biozone's proprietary drug delivery technology (QuSomes) which can help reduce cost of manufacture of formulations. So the potential is surely there, but after such a huge rise in the stock price over the last few months, it is good to be a bit cautious.
Franco-Nevada has done great over the last two months with nearly 50% appreciation from the low made on June 26. A large part of the move has come after the Q2'13 earnings as the stock has appreciated by nearly 25% since August 7. It is now above important levels, and may do better if gold remains stable to positive. The company reported a net profit, though there were declines in both revenue and net income. It maintained its guidance for the full year. The Company expects to receive a total of 215,000 to 235,000 gold equivalent ounces (GEOs) from its mineral assets and $55 to $65 million in revenue from its oil & gas assets the full year. However, Franco-Nevada is getting a bit high on valuations when compared to the peers, and that should be kept at the back of one's mind. The company has no debt on books and the cash position is extremely good. It had $797 million as on June 30. Gold has now moved by around 18% since the low made in June. It is above important levels which makes it relatively strong compare to a few weeks ago. $1470 is the next target given by some analysts, but that seems far away now. This is because the recent appreciation has been very fast, and a correction is likely. That will be the test for gold. If it can survive that, the sentiments will improve substantially. In any case, investment in the sector are increasing. Pershing Gold (PGLC), a development stage company, recently obtained more than $20 million funding to help it further develop its project in Nevada and start production. Now, most companies have managed to reduce cost of production, and hence a higher price scenario will have relatively more positive effect on the numbers.
The article on SA a few days ago covered several aspects of the future potential of Biozone. Most of them, like limited downside potential due to revenues from the contract manufacturing business, and the huge potential of the QuSomes drug delivery technology, have already been mentioned in most articles about the company. The author also mentions that the potential of QuSomes technology is confirmed by the fact that a company like MusclePharm (MSLP) invested in Biozone months after investment by OPKO Health (OPK). Dr. Frost and other investors, must have seen great potential in the technology based on results from the research so far. The author mentions that 'there must be something very innovative about the QuSomes technology and Biozone's ability to manufacture it for multiple different products.' In case OPKO begins to manufacture even one of its products based on the technology, that would confirm its commercial viability, and have positive effects on the contract manufacturing business. Further, the contract manufacturing business revenues are likely to receive a boost in 2014 even if MusclePharm contracts a portion of its production to Biozone. Analysts are in favor of following the smart money, and Dr. Frost's track record indicates that he has huge faith in the prospects of Biozone. This is reflected by the huge stake taken by him directly and through the companies where he is at the helm. Companies like Opko and MusclePharm are already doing well, and Biozone can follow if it begins to realize its potential. The next few quarters will be interesting to see how the events unfold. There are obvious risks when one invests in a company like Biozone and volatility may be high. However, backing of investors like Dr. Frost provides assurance of financial support which is ever so critical for companies at this stage of the business cycle.
The stock has corrected sharply over the last 7-8 weeks. It is nearly 20% below the 52 week high made in the middle of last month. The news that Lakewood Capital had initiated a short position in the company's shares led to some pressure. Lakewood earlier had a long position in the stock. The level of shorts were at extremely high levels on October 31 and hence the stock is vulnerable to volatile movements. In case of positive news, the squeeze can be very strong. The insider and institutional holding is extremely high, and investors like Soros Fund Management have a long position in the stock. However, despite the correction, it has done great in 2013 with more than 100% appreciation. Last couple of weeks have seen some recovery, but the volumes patterns are not so supportive. Dr. Frost has made some purchases recently which has supported the positive sentiments. Dr. Frost has been active with his other companies as well, and recently Biozone Pharmaceuticals (BZNE) was merged with Cocrystal Discovery where Opko and Teva (TEVA) have a stake. The strong performance of Opko is also mainly due to the support of Dr. Frost. The numerous acquisitions have also helped build positive sentiments about the prospects of the company. Many of Opko's investments may take time to yield tangible results, and hence improvement in the fundamentals may take a few years. The valuations are primarily based on promise, and the price to sales is still exceptionally high. An article on SA was positive on the future prospects of the company based on its candidates and catalysts in the near future. The analyst considered the recent fall as a buying opportunity, especially in view of purchases by Dr. Frost from the market. Dr. Frost's continued support is surely a factor, especially if one considers the possibility of a squeeze.
The stock has declined by 14% from the recent high made in the last week of August. Despite the correction, it is still up 33% over the last 3 months. This performance is much better than many of its peers. It has shown some resilience during the recent correction in prices of precious metals, and may be expected to out-perform in case there is a sustained rebound. An article on SA recently predicted an 11% increase in revenues for Q3'13, and a decline in net margins. The decline could result in lower dividends. The author states that the company's decision to expand its gold operations will put continuous pressure on the margins. Silver's profit margin will decline to around 80% and gold's margin will decline to around 70%. Increase in the percent of gold's revenues out of total revenues (from 29% in Q1'13 and 32% in Q3'13) is expected to lower the overall margins. Even the last earnings were not good as the revenues had declined by 17% and the net earnings had fallen by 50%. Importantly, the operating cash flows declined by 28%, and the cash operating margin declined significantly. The debt on books has increased over the last few quarters. However, the high profit margins of the streaming companies and the lower risk makes them a preferred bet compared to the miners. The correction in precious metal prices was due because they had run up sharply in a very short period of time. The outlook of the sector is better than what it was in June. There have been more investments in smaller companies. Pershing Gold (PGLC) has obtained $20 million funding with its director Barry Honig making significant investments. This indicates the faith of the top managers in the prospects of the sector. Silver Wheaton is a good bet for the long term, but the valuations may get a bit stretched if the stock price rises significantly from here.
Correction in gold has had a significant negative impact on stocks from the sector. Goldcorp has just made its 52 week low, which is close to the lows made in June. The chances of a rebound are good because gold had shown some strength last time it hit $1200. In case $1200 holds, these stocks can be good for the long term. Even if gold can consolidate in $1200-$1450 range in the medium term, companies like Goldcorp can report better numbers going forward. Goldcorp has taken the impairment hit, and is making conscious efforts to lower the cost. However, there has been yoy increase in all-in sustaining costs in Q3'13. The all-in costs in Q3 came in at $992 /oz. compared to $801 /Oz. for Q3'12. This compares well will many peers, though there are even development stage companies with lower expected cost of production like Pershing Gold (PGLC). Goldcorp reported much lower sales in Q3, but remains on course to meet its production and cost guidance. The valuations are good as the stock is trading at 0.87 times its book value. Analysts are positive on the stock. One article on SA recently compared Goldcorp with Barrick Gold (ABX), and expressed strong preference for Goldcorp. The author mentioned that Goldcorp has implemented a successful and disciplined growth and capital allocation strategy. It has significantly lower debt and operates in low risk jurisdictions. The company is strongly focused on gold and the exposure to silver is low. The focus on cost reduction is also at the top of management's mind. Most of its mines saw lower costs compared to the previous quarter, and these efforts will improve the margins over the next few quarters. In the current volatile scenario, lower cost companies will be preferred, and Goldcorp may be a good bet for the long term. But gold has to hold, else all bets are off.
The correction was due, and precious metals have obliged. A bit too much maybe, but they seem to be finding support around crucial levels. It is too early to be sure, but it is possible that they may rebound a bit to consolidate. If the supports do not hold, then the stocks may even test recent lows. Coeur has lost all the gains made in August, and has corrected by nearly 25% from the highs made at the end of August. The volatility has been high. Gold has corrected by around 7% from the highs, and silver has done much worse. That has dampened the sentiments a bit. Most stocks of mining companies have declined and are near recent lows. The taper – no-taper news has only added to the volatility. However, analysts are relatively more positive despite the correction. Even for Coeur, Scotiabank & Zacks have upgraded the stock. Scotia bank increased the target price from $5 to $6, and Zacks has a price target of $13.50. Analysts at Raymond James, which initiated coverage on Coeur recently, have put an outperform rating for the stock with a price target of $18. The average target price is just below $20. Even smaller companies like Pershing Gold (PGLC) have been able to obtain funding at market price with its Director Barry Honig making significant investments. This indicates that apart from the analysts, even the managements are a bit optimistic about the fact that the June lows may hold even if the correction runs deeper. The good part is that all companies, including Coeur, have become more conscious about the cost, and the rationalization efforts are already showing results. Further, Coeur recently announced a 91.5% and 96.4% increase in estimates for mineral reserves for silver and gold at its Nevada-based Rochester mine. If silver rebounds from current levels, then the medium to long term outlook for Coeur may improve.
The needle has moved slightly after the announcement of the $11 million funding led by insiders like Barry Honig. Now, the company has sufficient cash to reduce doubts about its ability to reach the production stage. What is required is more commentary from the management about this. That will be the real game changer for the stock. Honig continues to put in his money, and now has more than 15.4 million shares. Importantly, even the last purchase was around the market price. Investing such large amount of money has to be based on expected positives in the near future, and in the long term. There have been some acquisitions of development stage assets recently by bigger players to take advantage of the low valuations. Meanwhile, Gold has done well over the last few weeks, and has crossed important hurdles. A correction is quite possible due to the speed of the move, but one can expect important supports to hold. A rebound after the correction will make the rally more sustainable. The gold mining stocks have also done extremely well, with some of them moving by more than 40-50% on the back of a 17% move by gold. Development stage companies may start to participate in the rally based on individual merits. The positives in favor of Pershing are that it is expected to have much lower cost of production as compared to the industry averages. That makes it more immune to price fluctuations in the future. The leverage position is good and the cash position is currently very good. High level of insider ownership and experienced top management are also points to consider. The sentiments for the sector and the stock have surely improved over the last few weeks. This may translate into higher stock price if the outlook improves further.
The company will announce the results of its phase 1b/2a trials of SNS01T shortly. It recently announced that it will make two presentations on SNS01-T for blood-borne cancer care at the 55th American Society of Hematology (ASH) Annual Meeting and Exposition to be held from December 7-10th in New Orleans. The management stated that the company will present a poster to provide an update on the current results of the trial and it will also make an oral presentation of new results with SNS01T in non-clinical studies. The trials are still in preliminary stages, and the tumor reduction results achieved in preclinical trials are indicators. The FDA approval etc. may take a couple of years. The main purpose of the trials so far has been to test the safety and tolerability of SNS01T. A secondary purpose is to explore whether SNS01T is an effective treatment for multiple myeloma, mantle cell lymphoma and diffuse large B cell lymphoma. However, the results so far have been encouraging, and if the cohort 3 trials are also as good on tolerability and efficacy, then the confidence will increase. It is good to invest in a development stage company when it is relatively ignored and undervalued. That maximizes the chances of exponential returns. However, the attended risks are also high, and hence one needs to play keeping that in mind. For Senesco, the going so far has been good, and the upcoming trial results may be a trigger which can take the stock much higher. Many analysts are positive on the stock, though intervening volatility in the stock is likely. As mentioned by one analyst, the stock is highly undervalued compared to peer companies at similar stages of development. Furthermore, investment by experienced insiders like Chairman Harlan Waksal also indicates the potential of the company's technology.
The stock has corrected quite a bit from the highs, and the weakness seems to be setting in. There have been numerous articles on the web predicting much worse. The rise over the past one year has made it extra vulnerable to negative surprises and even the 'sell on news' phenomenon. Years of net losses have eroded the net worth of the company and the sentiments are ultra negative. Even in the last quarter, the net loss had increased sequentially, though there was a decline on a yoy basis. However, there was good growth in revenues on a yoy basis, and even sequentially there was some growth. The story has remained quite the same over the years as the revenue growth has been remarkable, but the net losses have continued. So the movement in the stock is not purely based on fundamentals. It is either based on promise or speculation or something else. Fundamental growth is important for any rally in ANGI to sustain meaningfully. Many analysts have doubted the sustainability of the business model of ANGI, especially in light of the growth in social media where reviews about products and services are shared for free. Companies like Yelp (YELP), Groupon (GRPN), Facebook (FB) etc. provide direct and indirect competition. Advertisers are also considering native advertising & social media sponsorship for the impact it has. IZEA (IZEA), which operates social media sponsorship / native ads space, posted record numbers recently. So unless something special happens soon, the risks with Angie are increasing. However, a recent article on seekingalpha had rightly pointed out that despite the fundamental story, it is still possible for the stock to make a comeback. There can surely be some rallies. Looking at the data, however, the shorts have only increased since May 31, and they were at 35% on July 31. The latest position will be interesting to see.
Though the revenues came in better than the company estimate of $9 million, the stock has corrected after the second quarter earnings. Company reported $9.5 million in revenues which was a 22% rise from $7.81 million in Q1'13. In Q2'12, the revenue was $13.05 million. The mobile revenues continued to surge and reached an all-time high at $2.6 million. This was a 98% increase on a yoy basis, and a 37% rise sequentially. The net loss in Q2'13 was $2.1 million or 11 cents per share compared to $3.8 million or 5 cents per share in the same quarter a year ago. Cash position improved to $8.3 million. The company managed to post a $380K adjusted EBITDA profit. Even the operating loss came down sequentially from $7.12 million to $1.96 million. The company was able to obtain significant traction from its new mobile advertising products, especially since launching additional native mobile ads on iPhone in July. The launch led to a four fold increase in native ad impressions. The launch of the product on Android Native will also help the company in reaching out to more users with its highest-monetizing and best-performing advertising units. Native ads and social media sponsorship is a fast growing market, and IZEA (IZEA) a company in this space, posted record revenues recently. For Meetme, the other metrics like monthly active users (MAUs) and mobile MAUs also increased significantly, and the mobile average revenue per daily active user also increased 48 percent to $0.037 on a yoy basis. Meetme has shown improvement in various metrics, and also in the financial performance. However, it is still far from achieving profitability on a net basis. Thankfully, the debt is not too high, and the cash position remains comfortable. The company needs to show more improvement in the bottom-line for the outlook to improve.
The upcoming earnings release will be the short term trigger for the stock. The last few months have been good. The stock has moved up 33% on a 52 week basis. The uptrend has been continued since May, and it is nearly 65% above the 52 week low. If the numbers are better than expected, the stock will gain even more momentum. Analysts are positive based on the long term potential of the company, especially after the release of the latest plans and operational strategies etc. The competition is fierce, and ultimately a large part of the competitive advantage is based on price. TMUS is aggressive and the acquisition of MetroPCS is likely to help it achieve operating efficiencies leading to large savings. The improved network experience and range of offerings related to smartphones can help it gain more market share. Smartphone sales is expected to be play a major role in increasing the subscriber base and ARPU. The competition is getting more fierce, and there has been some consolidation. The acquisition of Leap Wireless (LEAP) by AT&T (T) will make things difficult as LEAP operates in those regions where TMUS is active. Pressure on the margins will continue, which makes it difficult to improve the financial metrics. An article on seekingalpha had mentioned that with the increasing demand of high bandwidth, TMUS might face spectrum constraints in the future. It may need to acquire spectrum and go for more M&A to expand its presence. That will add to the debt. Debt is already high, and the company needs to take steps to keep it under check. Spherix (SPEX), a patent assertion entity, has filed a lawsuit against the company alleging infringement of its patents. For T-Mobile, the Q3 numbers will indicate the impact of the recent moves by the company. The MetroPCS acquisition will also begin to impact margins over the next few quarters.
The company managed to do well in the earnings. The numbers were better than estimates for revenues, while the earnings were in line with what the analysts were expecting. The revenues increased 24% to $58.6 million, compared to $47 million in Q3'12. The net income (GAAP) increased 11% to $8.4 million compared to $7.59 million in Q3'12. The last one year has been good for investors as the stock has delivered excellent growth. The management improved the revenue guidance for full fiscal 2013 to around $237 million, and the forecast for net income (non-GAAP) is around $52-53 million. For Q4'13, the revenue guidance is $60.2 - $60.6 million, and net income (non-GAAP) guidance is $9.2 - $10 million. Barclays have increased their price target for the stock from $18 to $20, and Zacks upgraded it from underperform to neutral with a PT of $17.90. The consensus rating for the stock is buy, and the PT is around $20. This indicates some upside from current levels. For the first nine months of 2013, the revenue was $177.22 million and the net income was $33.78 million compared to $146.13 million and $28.85 million respectively in the corresponding period of 2012. This is an increase of 21% in revenue, and 17% in net income. The sector is buoyant as more and more companies are asserting their patent rights. Several have filed patent infringement lawsuits against much bigger companies, and companies like Marathon Patents Group (MARA) have got settlements / licensing revenues for their patents. The management guidance indicates that RPXC will post growth in top and bottom-line in 2013. The stock has reacted positively, but more trading days are required to confirm that the momentum is building up. The stock has to cross $20 decisively to get into a higher zone.
The stock seems to be gaining momentum again after a few months of uncharacteristic volatility. Despite being a bit subdued during the last few months, the stock has appreciated by 38% over last one year. The company has been in the news for its deal with Inovio (INO), a smaller company in biotech space. An article on Motley fool mentioned Roche as a good stock for conservative growth for those looking to invest in this sector. The first half of 2013 was reasonably good with 5% increase in revenues and 12% increase in core EPS. The HER2 franchise showed 11% growth, and now accounts for 14% of the company's sales. Working with experimental companies like Inovio (INO) can help Roche prepare for the patent expirations which are starting next year. Hercepting ($6.3 billion in sales in fiscal 2012) is likely to face generic competition next year, but is expected to make up for the loss partly due to the new subcutaneous formulation recently approved in the EU. The Inovio deal is expected to be good for the company in the long term as it gives it exposure to the prostate cancer market. In addition, Inovio's Hepatitis B vaccine is also believed to have a lot of potential. It also gives it access to the electroporation technology for drug delivery. The technology is believed to have a lot of potential, though it has to go through a lot of trials etc. Another technology QuSomes from Biozone (BZNE), which is for liposomal delivery of drugs, is also believed to have a lot of potential for increasing the efficiency and efficacy of delivery of drugs. OPKO Health (OPK) is testing the Qusomes technology for various drugs based on a license agreement with Biozone. Ultimately, once these techniques go past the trial stage, they are likely to reduce the cost of production and the therapy. Roche is perhaps attempting to access these advantages by looking at the smaller players.