Aastrom Biosciences: Warrants Exercised and an Upgrade

Aastrom Bioscience (ASTM) issued a press release after the markets closed yesterday (02012.07.30) concerning the conversion of warrants into common stock.

"We are extremely pleased with the results of the exchange, which has improved the company's capital structure, removed most of these complex and dilutive warrants, and reduced the number of fully diluted Aastrom shares by more than six percent. We are now in a much better position to continue to attract high-quality, long-term investors to Aastrom who will no longer have to be concerned about the potential future impact of these warrants," said Tim Mayleben, Aastrom's president and chief executive officer.

The warrant count is not zero. From the press release: "There now remain 308,100 December 2010 warrants outstanding with an exercise price of $3.22 and an expiration date of December 15, 2015."

I don't know anything about WBB Securities, but they like ASTM.

02011.02.09... initiated coverage: Sell
02011.12.06... upgraded rating to: Hold
02012.04.16... upgraded rating to: Speculative Buy
02012.06.04... upgraded rating to: Buy
02012.07.24... upgraded rating to: Strong Buy

ASTM closed yesterday (02012.07.30) at $1.96. 52-week range: $1.75 - $2.91.

High Short-Interest-Ratio GDT::Portfolio Stocks

Numerous GDT::Portfolio stocks have high SIRs (Short-Interest-Ratios) on 02012.07.30.

Stewart Enterprises (STEI): 29.00 SIR at $6.80
Illumina (ILMN): 24.80 SIR at $42.30
Altair Nanotechnologies (ALTI): 17.30 SIR at $0.47
Aastrom Biosciences (ASTM): 14.00 SIR at $2.00
Kratos Defense & Security Solutions (KTOS): 13.40 SIR at $5.70
iRobot (IRBT): 12.50 SIR at $24.63
Level 3 Communications (LVLT): 11.90 SIR at $18.70
Geeknet (GKNT): 9.70 SIR at $19.73

Facebook Reports 2Q'12 Results

Facebook (FB) reported 2Q'12 results yesterday (02012.07.26) after the market closed and today (02012.07.27) FB shares opened $23.21, down 13.5%.

Reuters headline from this morning: Facebook shares down on lack of financial outlook.

Hmm... I consider this good news. In a nutshell, Facebook might be taking a long-term view of their business.

TheStreet.com headline from this morning: Facebook Proves It Stinks to Be a Long-Term Investor.

I agree! It has sucked being a long-term investor here in the 21st century.

Forbes.com headline from this morning: Six Reasons Facebook is a $7 Stock

This morning I placed an order to add to our FB holdings. The buy price is $21.99, so it won't surprise me if today's intra-day low is $22.00. [Why $21.99? Multiply Pi by seven and round to the nearest penny.]

FYI... Facebook ended 2Q'12 with $10.2 billion in "cash".

Investor.FB.com::Facebook Reports Second Quarter 2012 Results

StemCells Volume Has Been Interesting

StemCells Inc. (STEM) has had heavy volume during the last seven trading days. By heavy I mean the following: There are 25.3M STEM shares (~22.6M float), yet during the last seven trading days STEM volume has totaled ~66M. STEM closed yesterday (02012.07.26) at $2.05. 52-week range: $0.59 - $4.00. During the last eight trading days STEM has ranged from a low of $0.87 to a high of $2.31.

[02012.07.27] ~3.5M STEM shares traded yesterday (02012.07.26). That's approximately 15% of the float. STEM closed at $1.78, down 15+% for the day. Prior the market opening today (02012.07.27), StemCells Inc. announced the following.

"The California Institute for Regenerative Medicine has approved an award to the Company [StemCells Inc.] and its collaborators for up to $20 mln under CIRM's Disease Team Therapy Development Award program. The award is to fund preclinical development of co's proprietary HuCNS-SC product candidate as a potential treatment for cervical spinal cord injury."

My guess is today will be yet another high volume day.

Illumina; iRobot; Level 3 Communications

Illumina (ILMN) was upgraded to Outperform from Sell at CLSA today (02012.07.25). I don't know anything about CLSA, but an upgrade is an upgrade. ILMN closed yesterday (02012.07.24) at $41.52. 52-week range: $25.57 - $63.69. Illumina reported 2Q'12 results yesterday and here is one observation from the press release: "We are very pleased with our operational execution for the first half of 2012 and the resulting financial performance," said Jay Flatley, Illumina’s President and Chief Executive Officer. "While some uncertainty exists with respect to academic and research funding in the second half of the year, our outlook is generally as we anticipated. Accordingly, we are re-affirming our 2012 revenue guidance and increasing our non-GAAP earnings per fully diluted share guidance to between $1.50 - $1.60 (previously $1.40 - $1.50)."

iRobot (IRBT) reported 2Q'12 results after the market closed yesterday (02012.07.24). IRBT hit a new 52-week low of $19.09 yesterday before closing at $19.49. 52-week range: $19.09 - $38.33. In a nutshell: Home robot business doing great. Military robot business struggling. iRobot is expanding its Healthcare robot business.

Level 3 Communications (LVLT) reported 2Q'12 results prior the market opening today (02012.07.25). LVLT closed yesterday (02012.07.24) at $20.42. 52-week range: $16.51 - $36.00. From the press release: "We continue to expect to generate positive Free Cash Flow for the second through fourth quarters of 2012, in the aggregate."

Yahoo!; StemCells; Nanosphere; Google

I took almost two weeks off from the stock market and today (02012.07.24) I've been reviewing what's going on with GDT::Portfolio stocks.

Yahoo! (YHOO) issued an important press release on Monday (02012.07.16): Yahoo! Appoints Marissa Mayer Chief Executive Officer. I found this announcement a pleasant surprise. Mayer was employee number 20 at Google. On the next day (02012.07.17) Yahoo! reported 2Q'12 results and here are two notes: (1) "Cash, cash equivalents, and investments in marketable debt securities were $2,401 million at June 30, 2012 compared to $2,530 million at December 31, 2011, a decrease of $129 million." (2) "During the second quarter of 2012, Yahoo! repurchased 30 million shares for $456 million."

StemCells (STEM) had quite a day last Tuesday (02012.07.17). STEM closed the previous day at $0.87 and on Tuesday it closed at $1.80. Trading volume was 16.9 million. Yesterday (02012.07.23), STEM hit an intra-day high of $2.26 before closing at $1.89. Trading volume remains heavy. Here's the why... StemCells, Inc. Announces Its Human Neural Stem Cells Restore Memory in Models of Alzheimer's Disease

Nanosphere (NSPH) director Mark Slezak added to his NSPH holdings buying one million shares (indirectly) at $2.40 per share on Wednesday (02012.07.18).

Google (GOOG) reported 2Q'12 results on Thursday, 02012.07.19, and they were good. My take: $3.48 billion free cash flow; $43.1 "cash"; 54,604/34,311 Googlers (includes 20,000+ from Motorola Mobile); $774 million in capital expenditures; 19% effective tax rate. GOOG closed up 2% on the release of the 2Q'12 results.

Nanosphere Gets Another 'Buy' Rating

I've sort of ignored the market this week.

On Monday, 02012.07.09, I sold some Nanosphere (NSPH) at $3.50. It was a limit order that I didn't expect to hit, but it did. I found out today that also on Monday Nanosphere was "upgraded to Buy from Neutral at Roth Capital."

NSPH closed last week (02012.07.06) at $3.19. It opened this week (02012.07.09) at $3.40 and it spiked to $3.57 before closing at $3.41. The next day (02012.07.10) it closed at $3.12 and yesterday (02012.07.11) it closed at $3.00.

Stewart Enterprises Gets a 'Buy' Rating

Stewart Enterprises (STEI) has been in the GDT::Portfolio since 11 September 02003 (i.e. almost nine years). Stewart Enterprises is in the death care industry. The following are two headlines seen on 3 July 02012.

+ Cemetery Stock Stewart Enterprises Back From the Dead (Minyanville)
+ Stewart Enterprises initiated with a Buy at UBS (theflyonthewall.com)

With respect to the Minyanville headline: I didn't know that Stewart Enterprises had been "dead."

STEI closed on 02012.07.03 at $7.40. 52-week range: $4.92 - $7.88.

There are approximately 86,720,000 STEI shares. The following is data mined from Yahoo! Finance.

+ % of Shares Held by All Insider and 5% Owners: 27%
+ % of Shares Held by Institutional & Mutual Fund Owners: 72%
+ % of Float Held by Institutional & Mutual Fund Owners: 99%

STEI short-interest-ratio is at ~29.2.

Sold Some Cray (CRAY)

I sold 4.5% of our CRAY holdings today (02012.07.03) at $12.59. Interestingly, the limit order was to sell CRAY at $12.57 (i.e. $4pi), but the trade took place at $12.59 (which was also a new 52-week high).

Nanosphere Gets a 'Buy' Rating

Nanosphere (NSPH) hit a new 52-week high of $2.59 yesterday (02012.07.02) before closing at $2.52. Trading volume was 2.08 million versus trailing-3-month average of 0.33 million. Today (02012.07.03), Nanosphere was upgraded to "buy" from "hold" by Jefferies. The "buy" rating comes when NSPH is 183% above its 52-week low.

Spire At Risk of Being Delisted

On 30 December 2011, Spire received a notice from NASDAQ "advising" the company that is was violating the Minimum Bid Price Rule (penny stock) and the Minimum Pulic Market Value Rule ($15 million). The company had until 26 June 2012 to remedy the rule violations.

On 27 June 2012, received a notice from NASDAQ saying they are violation of the "minimum value" rules again.

SPIR closed on 02012.06.29 at $0.60 (well below a buck) giving Spire Corp. a market value of ~$5.09 million (well below $15 million).

SPIR has a grocery store-like PSR (Price Sales Ratio) of 0.1.

There are ~8.56 million shares outstanding with ~26.31% closely held giving SPIR a thin float of ~6.23 million.

SPIR 52-week range on 02012.07.01: $0.38 - $2.66.

Spire reported 1Q'12 results on 02012.05.10 (i.e. almost two months ago).

"We anticipate the softness in the solar industry to continue for a while longer. However, the bottom in equipment spending is expected to occur sometime toward the end of 2012, as manufacturers begin capital improvement programs including equipment updates and expansion. Market researchers predict a return to double digit growth sometime in 2013 that would extend for at least the next several fiscal years. We are positioned to capitalize on this projected growth with the recent introduction of our newest simulator, the Spi-Sun SimulatorTM 5600SLP and new Spi-AssemblerTM 8000. We are also combining our solar product lines by offering systems capabilities to our manufacturing line customers."

Spire is in a tough spot because implementing a reverse stock split does not do anything to change the company's market value.

LookSmart Worth More Than a Buck Per Share

LookSmart (LOOK) has an investor group interested in buying the company for a buck per share. LOOK closed Friday (02012.06.29) at $0.73. I agree with others who believe LookSmart still has ~$1.20 per share in cash. I also agree with a SeekingAlpha.com posting this morning (02012.07.02) that LookSmart is worth more than its cash per share. It's probably wrong to admit it, but I'm starting to feel better about our LOOK investment.

[update::02012.07.02] LOOK closed at $0.89, up ~22% for the day. Intra-day high was $0.95. Volume was almost 10-times the trailing-3-month average.

GDT::Portfolio End of 2Q'12 Review

The GDT::Portfolio at the end of 2Q'12.

Top 10 (Tier One)

(1) Cray [supercomputing]; (2) Geeknet [ecommerce]; (3) Google [Informatics]; (4) iRobot [robotics]; (5) Red Hat [open source]; (6) Yahoo! [Informatics]; (7) Hanger [healthcare]; (8) US Airways [transportation]; (9) Illumina [genomics]; (10) Bruker [scientific equipment].

Red Hat, Hanger, and US Airways should be in Tier Three. Yahoo! should be mid-Tier Two.

Tier Two

(11) Nanosphere [molecular diagnostics]; (12) Level 3 Communications [Internet pipe]; (13) Stewart Enterprises [deathcare]; (14) Amazon.com [ecommerce]/Informatics]; (15) Aastrom Biosciences [stem cells]; (16) Trimble Navigation [positioning systems]; (17) iParty [retail]; (18) Comcast [communications/media]; (19) LookSmart [Informatics; (20) Axion Power [batteries]

Stewart Enterprises, Amazon.com, Comcast, and Trimble Navigation should be Tier Three stocks. Nanosphere and Aastrom Biosciences need to be in Tier One.

Tier Three

(21) Spire [solar]; (22) Kratos Defense & Security Solutions [government security systems]; (23) Mace Security [security products]; (24) NeuroMetrix [diabetes diagnostics]; (25) Facebook [Informatics]; (26) AT&T [telecommunications]; (27) Altair Nanotechnologies [batteries]; (28) StemCells [stem cells]; (29) Lucent-Alcatel [telecommunications]; (30) Digital Angel [RFID]; (31) Isotechnika [biopharmaceuticals]

Spire needs to be in the Top 10. Altair Nanotechnologies, StemCells, and NeuroMetrix should be in the Top 15. Digital Angel is going to be removed from the portfolio before this year is over.