wall street nuggets

There was a big spike for Spatialight [HDTV] up 52.5% on Thursday with the news that they are ahead of their production schedule for their high resolution Liquid Crystal on Silicon (LCoS) microdisplay technology that lies behind some of the more affordable HDTV systems. They apparently are on track for delivering 1,000 units within an aggressive 30 day timeframe.

Movie Gallery [MOVI] which operates a chain of VCR and DVD rental stories was up sharply (by 18.4%) apparently due to a new analyst research report from KRS.

TiVo [TIVO] was up 9.8% to $7.95 per share on speculation regarding its patent infringement suit against Echostar which owns Dish Network. However, the late announcement by Cablevision System Corp. that it plans to introduce a centralized DVR hosting capability, won strong support from Comcast and Time Warner, which suggests it could be a tough day tomorrow for TiVo. It is hard to believe such a small player can survive in this environment. On a separate topic, I do hope the new TiVo software can do a better job of figuring out my viewing tastes. So far it has been truly awful.

By the way, we suspect the long term prospects for TiVo are probably much gloomier because of Windows XP Media Center. The home PC will ultimately replace the TiVo box and who needs the DVD/VCR rentals?

It seems the markets were off more at the top than the bottom. The average price change for the top 100 in market cap was -.30%; for the top 500 in market cap it was -.17%; and for the top 2000 it was -.15%. For the stocks ranked 2001 to 3000 in market cap, there was actually an average price increase of .04%. Nothing to write home about, but at least it was in the black.

The Maytag [MYG] repairman will probably get a little busier with the upcoming acquisition by Whirlpool [WHR]. The Whirlpool/Maytag merger approval apparently took many by surprise. With a single company now controlling 50% of the dishwasher market and over 70% of the washer/dryer market, one would have thought the antitrust regulators at the DOJ might have taken a firmer stance. But there are at least a few other strong domestic brands (Kenmore, GE and Frigidaire) and foreign manufacturers are making steady inroads. Maytag was up 27.7% and Whirlpool was up 7.1% on Wednesday with the news of the merger approval.

The FDA approval of the sale of the new test for congestive heart failure by Nanogen [NGEN] sent that stock price up palpitating to $3.18 per share (up 17.8%) yesterday.

The press release by Calgon Carbon [CCC] announcing disappointing sales and earnings for Q4 sent that stock down the coal chute. The price closed down 24.4% at $6.25.

Luby’s Inc [LUB] was off 22.8% yesterday in very heavy trading. While the company’s reported earnings were up 20% year-over-year, they were well below the expectations (.16 per share) for this very thinly covered stock. Volume was rather extreme at 2.4 million shares vs. an average daily volume of 128 thousand shares. The company clearly continues to be successful at reducing its long term debt, as can be seen in the visualization of the balance sheet over time found below.

In the graphic, CA = Current Assets, PPE = Property Plant & Equipment, OA = Other Assets, CL = Current Liabilities, LLT = Long term Liabilities, SE = Shareholders’ Equity.

The increase in natural gas costs appears to be to blame for missing expectations.

With about 130 locations, it appears that this aggressively priced chain with a reputation for solid cafeteria style meals will have to grow through expansion outside the lone star state. It does appear to be a survivor, with almost 60 years of history, and a menu featuring fish and chicken down there in steak country.

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In other thinly traded news, Anderson’s Inc [ANDE] was up over 5% in relatively heavy trading on Tuesday, thanks I’m sure to the very bullish comments by Jim Cramer on Monday’s Mad Money. The “clairvoyants” who bought in last Friday, must have also had a field day in the energy patch with some nice pin-action involving Pacific Ethanol [PEIX], FX Energy [FXEN] and Fuelcell Energy [FCEL] .

What could possibly explain the increase in egg demand?

Cal-Maine Foods (a major producer of fresh eggs in the U.S.) yesterday reported an outstanding 3rd quarter ending February 25th, with sales up 28.8% and the actual unit volume of eggs sold up 17% year-over-year. Their stock price, not surprisingly, rose 24.7% closing at $7.87 per share.

So what eggsactly is going on here? Why the eggsuberance in egg consumption?

It was about a year ago that research eggsonerating eggs in the battle against bad cholesterol was published. Coupling this with the need to shed those extra pounds gained over the holidays and the popularity of all the high protein diets, we have a compelling argument for increased egg consumption.

However, it is unlikely that we will return to the high point for egg consumption in this country. In 1945 the per capita annual consumption of eggs in the U.S. stood at 402. In 2004, the U.S. per capita consumption was 256.5 eggs, on a slow but steady trend upward from its low of 233 eggs per capita in 1991.

We would also be cautious about the possible impact of avian flu on egg supply. While many poultry farms are taking steps to isolate their birds from wild stock, the risks over the next year or two are very significant.

Some bad news from Antigenics on Friday. The company issued a press release indicating that the Phase 3 Study results for their Oncophage drug were not conclusive and that the company would be restructuring to reduce the burn rate. The stock price was down almost 42% for the day, closing at $2.97 per share.
It’s good news that they’re going to do something about their burn rate. They managed to lose $74 million last year with revenues of only $630 thousand. At the current burn rate, they would hit the wall in about a year.

Aastrom Biosciences also announced on Friday that its Tissue Repair Cells product, used in the treatment of osteonecrosis, had received an “Orphan Drug Designation” from the FDA. As the price was off over 8%, we assume a more attractive result was expected. The Orphan Drug Designation basically indicates that the drug offers potential therapeutic value. At current burn rates and revenues barely into six figures, ASTM might last another two years without additional funding.

It will be interesting to compare the AGEN and ASTM reaction to Dexcom’s on Monday. DXCM was up slightly (about 3%) in Friday’s trading on the news that it had secured $5MM in credit from Square 1 Bank to finance the acquisition of equipment necessary to continue development of its technology for the continuous monitoring of glucose levels in the body - much needed by diabetic patients. At this point DXCM has no revenues at all, and FDA trials are expected in the next six weeks. HOWEVER, DXCM was rather heavily pimped on Jim Cramer’s Mad Money after the market closed on Friday and we expect that the lemmings will be driving this stock into the glucosphere on Monday.

While we’re on the topic of Biotech stocks, how does one explain the unusal price increase of 27% and volume for Exact Sciences Corp. of Marlboro, Mass.? True, they seemed to have a big breakthrough in the technology for detecting colorectal cancer from stool samples back in January, but shit that was a long time ago. While their research has been submitted for publication and presentation at some upcoming meetings, it seems unlikely that acceptance in either case could trigger this type of response. So it seems likely that EXAS might be fodder in an acquisition by one of the bigger players and that someone might be trading on insider info. Tch. Tch.