wall street nuggets

VOLT INFORMATION SCIENCES INC [VOL] up 13.8% closing at $54.17 on 62% increase in net income, $0.86 per share compared to $0.54 per share for the fourth quarter last year. However, net sales were only up 3%. Rather high P/E ratio at 33 based on trailing 12 months.

STAGE STORES INC [SSI] jumped 11.5% closing at $33.05 following (1) updated guidance on 2007 earnings that projects a 20% increase over previous guidance, (2) approval of a $50 million Stock Repurchase Program, and (3) a 3-for-2 stock split to be paid as a stock dividend on January 31, 2007 to all holders of record of the company’s common stock at the close of business on January 18, 2007.

INCYTE CORP [INCY] up 11% closing at $7.06 following the announcement of positive clinical results from its HIV and Diabetes programs at the 25^th JPMorgan Healthcare Conference. This was followed by upgrades by UBS from “Neutral” to “Buy” and by Piper Jaffray from “Market Perform” to “Outperform.”

Long standing White Rabbit, CHEESECAKE FACTORY INC [CAKE] jumped 9.9% closing at $26.99 following an announcement that fourth quarter sales had come in at $360.4 million, representing an 18% increase over a comparable 13-week period in 2005. However, earnings continue to be veiled and there is very little visibility into recent operations given the tardiness of the reporting. Comparable restaurant sales were rather unimpressive, increasing only 0.8%.

ALNYLAM PHARMACEUTICALS [ALNY], a leading RNAi therapeutics company, jumped 8.9% closing at $22.22, following the announcement that it had obtained an exclusive worldwide license to a liposomal delivery formulation technology for the discovery, development and commercialization of RNAi therapeutics from a Canadian pharmaceuticals company, INEX PHARMACEUTICALS CORP [TSX: IEX]. RNAi or RNA Interference is a naturally occurring mechanism within cells for selectively silencing and regulating specific genes, and was recognized as a major break through with the award of the 2006 Nobel Prize for Physiology or Medicine. INEX PHARMACEUTICALS has obtained key patents for the development and commercialization of liposomal and/or lipid nanoparticle formulations that are required for systemic delivery of RNAi therapeutics.

APPLE COMPUTER INC [AAPL] soared 8.3% closing at an all time high of $92.57 on extraordinary volume of almost 120 million shares following the announcement of the revolutionary iPhone device due for release in the summer. While we are find the memory options somewhat disappointing, the carrier option (Cingular) disappointing and the price point on the high side, there is much that is compelling and little doubt that it will sell like hot cakes.

SPRINT NEXTEL CORP [S] dropped 11.2% closing at $17.45 on a huge volume of almost 150 million shares. The drop was probably due primarily to the announced decline of 306,000 post-paid subscribers, despite a slight improvement in the post-paid churn rate at 2.3% for the quarter (high compared to other wireless carriers). The planned headcount reduction of about 5,000 in the first quarter may finally reflect some post-merger synergies as the company transitions to a unified customer care, financial systems, device activation, and billing systems. Downgrades by CIBC World Markets, Deutsche Securities, Credit Suisse and HSBC Securities did not help. There is probably an interesting buying opportunity close to this level. The key is probably whether the iDEN network problems are finally solved. Hopefully, they will start to refine the bizarre content of some of the TV ad campaigns based on feedback.

MILLS CORP [MLS] slid 21.8% closing at $14.82 following the announcement that it had completed its investigation into its historical accounting policies and practices. As a result of the adjustments arising in part from the investigation, the company will be restating its financial statements for 2001-2004 and the first 3 quarters of 2005. The expected impact of the corrections is projected to be between $347 and $352 million. It is also noted that the company could be forced to seek protection under Chapter 11 if the company is unsuccessful in its efforts to pay-off the Senior Term Loan by March 31, 2007. See our earlier post:

“And all should cry, Beware! Beware!”

…

And close your eyes with holy dread,

For he on honey-dew hath fed,

And drunk the milk of Paradise.”

From Kubla Khan, by Samuel Taylor Coleridge.

ESCALA GROUP INC [ESCL] tumbled 41.3% closing at $4.54 on the announcement that the company would be delisted by Nasdaq for failure to file financial statements in a timely fashion. There are now about 22 other Nasdaq White Rabbits for which the gap between the last reported period and today is 284 days! (Look at our White Rabbit list for December and focus on the companies for which the Gap value matches that of ESCALA GROUP [ESCL] and the ticker symbol has 4 characters.)

By the way, yesterday’s comments on DYNAVAX TECHNOLOGIES CORP [DVAX] failed to make an important observation. While the failed test of TOLAMBA™ due to the absence of the disease certainly did not provide any evidence that the treatment was not effective, the wasted year of testing probably delayed the final commercialization of the product by that much and probably provided an opportunity for competitors to bring other treatments to market and gain market share – so of course some negative impact on the stock price should be expected. However, the 30% drop still seems a bit excessive for a non-test.

It was a mixed bag on Tuesday but no really strong moves on the part of any one sector. Overall, the average member of the SigmaInverse Universe was up 0.09% with 51.3% of the members posting positive returns for the day. The extremes were Mining, down 1.3% on average. and Restaurants, up 1.5% on average.

It was a very good year indeed! Many thanks to the small (but growing) and loyal group of readers who stuck with us the year. Not sure how much longer we will continue the flow of nuggets, but it has at least kept us busy.

The year ended on a bit of a sour note, with the average member of the SigmaInverse universe losing 0.55% on Friday and only about 27% of the members posting positive returns for the day. The only unusual sectors on Friday were those posting gains for the day. Biotech was up 0.5% for the day, Construction was up 0.1% and REITs was up 0.2%. The remaining sectors were all in the red.

While the week ended on a sour note, the markets certainly got off to a strong start and the early strength sustained it so that the cumulative returns for the week were healthy across all ranges of market capitalization, ranging from 0.47% for the Large Cap stocks to 1.28% for those with market capitalization ranks between 2001 and 2500 (Micro2000).

Apparently providing support for the old adage, “Eat or be eaten,” PHELPS DODGE CORP [PD] soared 26.8% closing at $120.47 on the news that it was being acquired by FREEPORT-MCMORAN & GOLD [FCX] in a deal worth about $25.9 billion. Under the terms of the deal, stockholders of PD will receive $88.00 in cash plus 0.67 common shares of FCX – in other words, a total consideration of $126.46, based on the closing price of FCX on November 17^th. While both boards have approved the transaction, the transaction is subject to the approval of the shareholders of both companies and the usual regulatory approvals. Between the PD deal and the OREGON STEEL MILLS [OS] deal (see below), the Metals sector was on fire.

COTHERIX INC [CTRX] jumped 19.8% closing at $13.42 on the news that it was being acquired by a Swiss biotech company, ACTELION, in a deal valued at $420 million. Takeover targets abound in the Biotech sphere and we should develop a model for ranking them.

CYBERONICS INC [CYBX] surged 12% closing at $24.17 on the news that it had completed its internal investigations into stock option award timings. The company acknowledged that there were “incorrect measurement dates with respect to financial reporting of certain option grants between 1999 and 2003.” Although the exact amount of additional non-cash compensation to be booked is not known yet, it is estimated to be approximately $10 million, cumulatively. The company will be filing amended 10-Q’s and 10-K’s for the relevant time periods. The company also announced the replacement of its CEO and CFO. While the change in management is warranted, the magnitude of the price surge, the absence of profitability, the lack of growth in revenues, and lack of visibility into the operations, would indicate either total avoidance (conservative) or a selling opportunity, until there is at least more visibility.

AMERISTAR CASINOS INC [ASCA] rose 11.1% to close at $28.54 apparently on buyout speculation following the sudden death of its CEO, Craig Neilsen. Undoubtedly also contributing to the rise was an upgrade by KeyBanc Capital Markets / McDonald from “Hold” to “Buy.” No significant opportunities seem to exist at this time.

MENTOR CORP [MNT] and ALLERGAN INC [AGN] were busting out 10.9% and 7.8% to close at $52.78 and $121.32, respectively, in response to the FDA approval of silicone breast implants last Friday.

OREGON STEEL MILLS INC [OS] jumped 8.2% closing at $63.77 on the news that it was being acquired by Russian steelmaker, EVRAZ, for $2.3 billion in cash. No opportunity here, but watch the other steel stocks. RELIANCE STEEL & ALUMINUM [RS] was up 5.7% on takeover speculation and Mad Money’s hyping will probably drive it even higher. Other big movers in the sector include NORTHWEST PIPE CO [NWPX] up 5.6% closing at $33.99, OLYMPIC STEEL INC [ZEUS] up 5.1% closing at $27.37, and AK STEEL HOLDING CORP [AKS] up 3.5% closing at $15.16.

NOVELLUS SYSTEMS INC [NVLS] advanced 7.7% closing at $33.10 on very heavy volume (three times the average daily volume) with no obvious news. Despite the large gain, the fundamental data continues to look very strong, and the stock continues to look attractive, given roughly 30% top line growth and a relatively attractive P/E of about 25.

EQUITY OFFICE PROPERTIES TRUST [EOP] was up 7.7% closing at $48.14 after announcing that it had signed a definitive merger agreement to be acquired by the Blackstone Group, in the largest private equity deal to date, valued at approximately $36 billion including debt. Blackstone will acquire all of the outstanding EOP common stock for $48.50 per share in cash. Repercussions were felt throughout the REIT sector, with the sense that almost all REIT’s had become targets. There was some irony in the deal being announced on the same day that HCA (the previous record holder as the largest private equity deal) stopped trading.

Daily Sector Performance Chart

While the Dow Jones Industrial Average may have gotten off to a weak start for the week, the broader market turned in a modestly positive performance. The average stock in the SI Universe (3,551 members) posted a gain of 0.18%. There were 1,804 gainers versus 1,628 losers and 119 unchanged for the day. The big outlier sectors were Automobiles (down 0.8%), Metals (up 1.1%) and REIT’s (up 1.7%).

FOXHOLLOW TECHNOLOGIES INC [FOXH], which develops innovative technology for removing plaque from arteries, took a beating on Thursday, dropping 19.5% to close at $28.90 after announcing third quarter results and lowering fourth quarter guidance. The third quarter results were actually pretty good, with the company reporting revenues of $53.8 million that were up about 49% over the third quarter of 2005. Earnings were $0.26 per diluted share, compared to a loss of $0.06 per diluted share for the same period last year, and easily topping the consensus estimate of $0.12 per share. On the downside, the company indicated that it expects to lose between $0.05 and $0.09 per share in the fourth quarter on revenues of between $54 and $56 million. This includes a stock-based compensation expense of approximately $3 million and an expected one-time charge of $3.5 million involving the assignment of a facility lease. Excluding the special charges, earnings on a non-GAAP basis are expected to be in the range of $0.15 to $0.19 per share. The stock was downgraded by First Albany from “Buy” to “Neutral” and by Piper Jaffray from “Outperform” to “Market Perform.” This now looks to be a very strong buying opportunity.

JUPITERMEDIA CORP [JUPM] was hammered down almost 36% to close at $5.83, a new 52-week low after announcing third quarter results that failed to meet expectations. Earnings for the third quarter were $0.03 per share compared to earnings of $1.15 from continuing operations in the third quarter of 2005, and well below the consensus estimate of $0.08 per share. Revenues came in at $33.8 million, about 6.3% higher than third quarter revenues in 2005. Long-term debt appears too high and revenue growth potential appears very limited, so we do not see an opportunity at this time.

Mortgage banking company, FIELDSTONE INVESTMENT CORP [FICC], fell 23.1% to close at $5.80 after announcing disappointing third quarter results. Obviously hit hard by the housing downturn, the company reported a third quarter net loss of $45.0 million, or $0.97 per share, compared with a net income of $23.0 million, or $0.47 per share (as restated), in the same period last year. Looking ahead, the company indicated it would be cutting its dividend from $1.60 to $1.80 per share to $1.31 to $1.41 per share, a drop of about 21%. The big factors contributing to the loss, relative to Q2, include a $22.6 million increase in provisions for loan losses which is understandable, but the portfolio derivatives loss of $13.8 million and the increase of $10 million in interest expense should be better explained. We do not see any opportunity here.

ERESEARCHTECHNOLOGY INC [ERES], which provides technology and services to the pharmaceutical, biotech and medical device industries, plummeted 22.6% closing at $6.00, after announcing disappointing third quarter results. The company reported revenues of $22.2 million for the third quarter, compared to $20.9 million for the third quarter of 2005, well below the consensus estimate of $23.5 million. Earnings of $0.05 per share were in line with expectations. However, the company’s guidance for fourth quarter earnings of between $0.02 and $0.04 was well below the consensus estimate of $0.08 per share, and revenue guidance of between $18 and $20.5 million is well below the expected $25.9 million and even below the year ago revenue number of $25.4 million. The stock has been upgraded by Carls & Company from “Above Average” to “Buy,” but we do not see an opportunity.

BMC SOFTWARE INC [BMC] jumped 9.5% closing at $32.94 as it announced a strong second quarter, ended September 30^th, for fiscal 2007. Revenues were up 7% to $387 million over the same period last year – with its Business Service Management (BSM) license bookings up 23%. Earnings for the second quarter were $58 million, or $0.28 per diluted share. Adjusting for amortization of acquired technology, stock-based compensation and one-time tax effects, earnings were $0.37 per diluted share which easily topped the consensus estimate of $0.32 per diluted share. The P/E ratio of 41 strikes us as rather high given the current revenue growth rate of about 18%.

URBAN OUTFITTERS INC [URBN] rocketed up 13.3% closing at $21.53 after announcing a fairly strong third quarter. Earnings for the third quarter were $34.5 million, or $0.21 per diluted share, compared to $0.22 per diluted share for the third quarter of 2005, and topping the consensus estimate of $0.18 per diluted share. Revenue for the third quarter was $308.4 million up 6.8% over the same period last year. Helping matters was an upgrade by Roth Capital from “Hold” to “Buy.” Given the high P/E ratio (30.8) and relatively low growth, we do not see this as a opportunity on the long side.

GOODYEAR TIRE & RUBBER CO [GT] bounced up 15.6% closing at $17.54 after announcing a somewhat deflated third quarter. The company lost $48 million, or $0.27 per share, in the third quarter, largely because of restructuring charges that include the closing of a plant in Tyler, Texas. Discounting special charges, earnings would have been $0.42 per share which easily topped the consensus estimate $0.24 per share. It appears there is some strong cyclicality in this stock that calls for some spectral analysis before passing final judgment.

BRIGHTPOINT INC [CELL], which specializes in the distribution of wireless devices and accessories, surged up 15.9% closing at $13.49 after announcing a swing to profitability in the third quarter. Earnings of $0.17 per share compared to a loss of $0.12 per share for the third quarter of 2005 were in line with the consensus estimate. Revenues for the third quarter were $633.7 million, up 16.3% over the same period last year and topping the consensus estimate. Noting negative free cash flow and the company’s revised downward guidance for the fourth quarter revenue (5% to 7% for sequential growth) and a P/E ratio of 34.3, we do not see a buying opportunity here, despite the new Motorola business.

ESSEX CORP [KEYW], which provides signal processing technology for government intelligence and defense customers, jumped 17.9% closing at $23.55 after it was announced that it had signed a definitive merger agreement with a subsidiary of NORTHROP GRUMMAN CORP. [NOC] according to which the company would be acquired by NORTHROP GRUMMAN for $24 in cash per common share. The deal has been valued at $580 million, which includes the assumption of a very small amount of debt (only about $41 thousand at the end of Q3 in long-term debt). Not sure what the other $60 million covers. The acquisition is not expected to have a positive impact on earnings until 2008. Noting the very low P/E ratio on NOC and it an almost non-existent impact on the price of NOC with the announcement of the acquisition, there does not appear to be any significant opportunity at this point.

Daily Sector Performance Chart

The markets were down on Thursday, probably reacting to the oil price increases which crept back above $61 per barrel and what appeared to be a strange delay in assimilating the impact of the midterm elections on “big pharma.” Thursday saw a median loss of about 3% in the “big pharma” group. From our perspective, the election reaction is creating an interesting opportunity because the long-term secular trends are so compelling (aging baby boomers popping more pills) and even if the Democrats are able to bring about some needed change, the industry should easily be able to preserve profits by spending a little less on lobbying.

Across the entire SI Universe of 3,558 stocks, the average loss was 0.75%, with only 28.2% of the members posting positive returns for the day. The outlier sectors today were: Alternative Energy (up 1.3% in response to the higher oil prices), Mining (up 1.4%), Oil & Gas Production (up 0.7%) and Scientific and Tech Instr. (down 2.2%).

Troubled home builder, TECHNICAL OLYMPIC USA INC [TOA] tumbled 35.1% closing at $7.00. It has lost 70% of its value since it opened at $23 per share on May 9, 2006. The latest drop was precipitated by a demand for payment under certain limited guarantees provided by TOA in the financing of a joint venture involving the construction of 3,500 to 4,000 homes a year. In addition, the company’s balance sheet is pretty grim. While the current ratio is a respectable 5.8, it is carrying almost $2.1 billion in inventory and given the current housing situation in Florida, the outlook is bleak. As of the end of the second quarter, there was only $53 million in cash and cash equivalents with current liabilities of $367.6 million. The company also had approximately $1.3 billion in long-term debt at the end of June. On top of it all, despite Mr. Greenspan’s assessment that the housing downturn is over, my estimate is that we still have a long way to go before the bottom is reached. And while many home builders are probably in a good position to survive, my assessment would be that TOA is not likely to be one of the survivors.

HOMEBANC CORP [HMB] dropped 19.3% closing at $3.90, a new 52-week low, after announcing third quarter results and indicating that it would cease operating as a Real Estate Investment Trust (REIT) next year. Third quarter results included a loss of $0.04 per share compared with a loss of $0.01 per share for the third quarter 2005. This was actually a penny better than the consensus estimate of a loss of $0.05 per share. However, the stock was also downgrade by AG Edwards from “Buy” to “Hold.” The move to de-REIT should help the company preserve shareholder equity, allowing it to significantly reduce the dividend yield. The aggressive selling by those insisting on the high dividend yields is apparently creating a very attractive buying window.

ANTHRACITE CAPITAL INC [AHR] was another REIT on the ropes, dropping 17.9% to close at $11.50 after announcing third quarter results. The company reported third quarter earnings of $0.22 per share compared to earnings of $0.28 per share for the third quarter of 2005, which was well below the consensus estimate of $0.30 per share. The stock was downgraded by Friedman Billings from “Outperform” to “Market Perform.” Given the focus on commercial mortgage-backed securities both in the U.S. and international, we see this as a very good opportunity although one should probably wait until the price stabilizes around $10.50.

CROCS INC [CROX] snapped up 7.2% closing at $44.25 as shorts were forced to cover. Too much hype on this one. Be careful.

The nation’s second-largest ethanol producer, VERASUN ENERGY CORP [VSE] surged up 7.7% closing at $18.71 after reporting significant growth in both revenues and earnings for the third quarter. The company reported total revenues of $147.5 million, up 159% over the third quarter of 2005. Net income was $32 million compared to a loss of $205 thousand for the third quarter of 2005. Given the company’s decision to diversify into biodiesel and the swing to profitability, this looks like a very attractive buying opportunity, despite the downgrade by BB&T Capital Markets from “Buy” to “Hold.”

NEUROCRINE BIOSCIENCES [NBIX] jumped 8.5% closing at $8.39 on an upgrade by Robert W. Baird from “Underperform” to “Neutral,” based on some anticipated gains from other products in the pipeline - specifically its GnRH antagonists for the treatment of endometriosis. However, since the company indicated it was only expecting top line results from a Phase II clinical trial in the fourth quarter, I will stand by my previous assertion that some belt-tightening might be prudent for the sake of survival.

INSIGHT ENTERPRISES INC [NSIT], a provider of IT products and services, rose 9.7% closing at $22.37, despite news that it would be delaying its 10-Q for the third quarter pending the results of an ongoing investigation into its stock option awards history. Third quarter revenue of $918.6 million was in line with the consensus estimate of $918.59 million. The press release claims last year’s revenue was $823.6 million for a growth rate of 11.5% year-over-year. There is no 10-Q or 10-K that I can find with this number although the company did revise some annual numbers including Software Spectrum in a recent 8-K. The actual revenue reported last year was $844,049,000, and we can find no amendment to this filing, so the actual growth rate would appear to be 8.8%. Not feeling there is much reliability in these numbers (even the top line), I would exercise extreme caution.

Online provider of wireless products and services, INPHONIC INC [INPC], shot up 21.5% closing at $10.98 after announcing improved third quarter results. Third quarter revenue was $102.2 million compared to $92 millon for the same period last year, and topping the consensus estimate of $101.13 million. The company announced a loss from continuing operations for the third quarter of $4.9 million or $0.13 per share. Excluding special charges, the loss would have been $0.03 per share which is a significant improvement over the loss of $0.14 per share for the same period last year. Adjusted earnings before taxes (EBT) of $0.16 per share was also reported for the quarter. The company’s guidance for the fourth quarter is for revenue to be in the range of $115 to $125 million, which is slightly better than the current consensus estimate of $118.04 million. Also helping was an upgrade by Deutsche Securities from “Hold” to “Kaufen.”

Daily Sector Performance Chart

The average gain in the SI universe today was a modest 0.14% with very little change in the micro-stocks on Tuesday. Just 50.6% of the stocks posted positive gains for the day versus 46.4% posting losses. The big sector moves for the day were Alternative Energy (up 2.5%) and Mining (down 1.3%).  It will be interesting to see whether the election results have any big impact on the markets tomorrow.  With the possible exception of the Pharmaceuticals, it does seem very unlikely that there will be much of an impact in the short-term.

Monday, October 30, 2006.

EMISPHERE TECHNOLOGIES [EMIS] dropped 23.8% closing at $6.77 after releasing what appeared to be rather promising results from its 90-day Phase 2 study of its oral insulin product for the treatment of Type 2 Diabetes Mellitus. Essentially, the study concluded that the treatment was effective at the 10 mg, four times a day, dosage level without the need to frequently monitor blood glucose levels or to titrate the dose for any reason. At two lower dosage levels (5 mg 4 times a day, and 10 mg 2 times a day) the response was not statistically significantly different from the placebo response. No adverse reactions were noted at any dosage level. On balance, we would have to conclude that the test results should have been received positively and assuming that oral delivery of insulin has a huge advantage over the needle delivery, it seems possible that the poorly worded press releases might have led some casual readers to conclude that the efficacy of the treatment was being called into question. If so, this should be a great opportunity to buy.

TENET HEALTHCARE CORP [THC] tumbled 10.6% closing at $7.42 following an announcement that it expects to report on November 7^th a net loss in the range of $82 to $92 million (or $0.17 to $0.20 per share) for the quarter ended September 30^th. The consensus estimate had been for a loss of $0.01 per share. THC was the weakest member of the Healthcare sector which was down 0.4% for the day.

ALPHA NATURAL RESOURCES INC [ANR] slipped 8% closing at $15.42 on Monday with all kinds of bad news. Not only were oil prices down sharply, but the company points to lower productivity in some of its deep coal mines and rising costs, as it cut its estimate for 2006 earnings from $1.50 to 1.91 per share, to a new range of $0.90 to $1.14 per share. The consensus estimate had been for $1.63 per share.

NUANCE COMMUNICATIONS INC [NUAN] raced ahead 7.8% closing at $10.91 in the heels of PR on the Amazing Race, pitting the human world champion of text messaging against new Mobile Dictation voice recognition technology from NUANCE COMMUNICATIONS. Taking only 16.32 seconds, the software blew away the human record of 42.22 seconds.

STEMCELLS INC [STEM] rose 7.9% closing at $3.15 possibly on a recommendation by Market-Pulse.com. No other events of note.

IOMEGA CORP [IOM] hit a 52-week high moving up 11.9% to close at $4.03 with no news of note other than a continued favorable response to last weeks announcement of quarterly results.

AMERICAN POWER CONVERSION [APCC] surged ahead 26.4% closing at $30.02 on the news that it had agreed to an acquisition by the French company, SCHNEIDER ELECTRIC for $6.1 billion or $31 per share. The deal is expected to close in the first quarter of 2007, pending approval of APPC shareholders and regulatory approval. No need for battery backup here.

TRUSTREET PROPERTIES INC [TSY], a REIT specializing in fast-food restaurant property, was up a sharp 35.7% closing at $16.97 after announcing that it had agreed to an acquistion by GE Capital Solutions valued at $3 billion including debt. Each share of TSY is being valued at approximately $17.05, for a total of $1.15 billion cash.

The Daily Sector Performance Chart

The average gain for Monday in the SI Universe was 0.35% with 59.1% of the members posting positive returns for the day. The big losers for the day were Mining (down 1.8% on average) and Oil & Gas Production (down 1.1% on average).

After being beaten down pretty severely since May 11, PEABODY ENERGY CORP [BTU] looks like it finally may have reached bottom. The stock was up 9.6% closing at $38.43 as the company’s Director of Safety and Training for Appalachia Operations, Terry Hudson, was honored as “West Virginia’s 2005 Safety Leader” by the Holmes Safety Association.

KFX INC [KFX] cratered down 18.5% closing at $11.60, apparently on rumors “published” by theflyonthewall.com relating to “heat & dusting concerns in K-Fuel.” There was some speculation that shorts were conspiring to drive the price down, but KFX released a press release after the close of trading to update its report on Tuesday regarding the test burn FirstEnergy in Ohio. The update confirmed that FirstEnergy had raised two issues: “there was fugitive dust that occurred during the transloading process from rail to barge” and “a few of the cars exhibited elevated heat content.” Apparently, discussions with FirstEnergy are continuing and KFX expects that the issues will be remedied quickly, so it appears that the panic was unwarranted, and we expect the stock to head north of $14 tomorrow when things cool off. The concept behind K-Fuel is pretty interesting. Heat and pressure are used to physically and chemically transform high moisture, low-BTU coal (e.g. subbituminous coal and lignite) into lower emission fuel exhibiting improved heat content and at the same enabling the removal of impurities like mercury, sulfur dioxide and nitrogen oxide. Since the company is not profitable, the economic success of K-Fuel still appears to be questionable.

INTERNATIONAL COAL GROUP [ICO] slid down the chute 13.6% closing at $4.78 after announcing that it had lowered its outlook for 2006 as a result of idling its Sycamore 2 mine and continued cost pressures in the Central and Northern Appalachian regions. Click here for the press release.

NEUROMETRIX INC [NURO] plummets 12.8% closing at $18.74 on no news? Extremely suspicious price movement. Dubious distinction as short pick of the day at shortpicks.blogspot.com. Looks like automatic stop loss orders may have started the sell-off at about 3 pm. Rather high P/E ratio makes it hard to view as a strong buy at this point.

NBTY INC [NTY] slipped 9.3% closing at $27.30 following its announcement of a sharp slowdown in August sales and a downgrade from RBC Capital Markets from “Outperform” to “Sector Perform.”

SMITH & WESSON HOLDING CORP [SWHC] scored big, gaining 14.4% to close at $13.01 with heavy insider buying by director, Robert Scott.

ENERGY CONVERSION DEVICES INC [ENER] soared 12.8% closing at $37.20 after reporting a relatively strong fourth quarter with a loss of $0.02 per share compared to a loss of $0.23 per share for the same period last year and considerably better than the consensus estimate of a loss of $0.15 per share. The company’s solar unit was the star performer, posting an operating income of $8.6 million with revenues of $87.5 million for the fiscal year, compared to a loss of $3.2 million with revenues of $58.7 million for the previous year.

WINDROSE MEDICAL PROPERTIES [WRS] rose 12.5% closing at $17.08 on the news that it would be bought by HEALTH CARE REIT [HCN] at approximately $18.06 per share in the form of HCN shares (0.4509 per share of WRS).

PALL CORP [PLL] popped 11.8% closing at $30.18 after the company reported very strong fourth quarter earnings of $0.50 per share compared with $0.34 per share for the fourth quarter last year and also better than the $0.46 per share that analysts had been expecting.