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Thursday, August 27, 2009

Major News from China that will drive SKBI Momentum

Huge news from China that impacts SKBI. SKBI could do $3+ EPS this year and has only 3.5m shares outstanding. Now a major momentum theme is developing in the sector SKBI is in. I believe this stock will see major momentum on swine flu and animal disease threats.

BEIJING, Aug. 25 (Xinhua) -- Chinese lawmakers warned Tuesday of a "grave hidden peril" of epidemic animal disease because of inadequate monitoring facilities and a complex international environment.

Even though the government has set up a compulsory vaccination system, requiring immunization of animals against diseases harmful to people's health and the husbandry industry, the possibility of outbreaks of disease still existed, the lawmakers said in a report presented at the 10th session of the Standing Committee of the 11th National People's Congress (NPC).

The problems of excessive veterinary drug residues and banned food additives in livestock products were not fully under control in certain areas, the report said.

The lawmakers suggested the government subsidize treatment of animal carcasses that had died from disease or unknown causes to contain animal epidemics.

They also said there should be relevant authorities to standardize use of veterinary drugs, strengthen and improve monitoring of the production and distribution of livestock products.

The lawmakers also proposed nationwide inspections for excessive veterinary drug residues and banned food additives be put in place in the near future.

As the world's largest producer of poultry, livestock and aquatic food products, China has a lot to lose from outbreaks of animal diseases. It is estimated they cost China 40 billion yuan annually.

In 2007, China's top legislature adopted an amendment to the law on prevention of epidemic animal disease, which ordered all animal owners to comply with compulsory vaccination policies, especially owners of poultry and livestock bred in rural backyards, and pets in urban houses.

Tuesday was the second day of the legislature's four-day meeting, which is usually held every two months.



Read Article

Sunday, August 23, 2009

MELA - Speculative Second Half 2009 Stock

MELA had a very interesting article in Barrons this weekend. The success of this stock will depend on FDA approval, which is due by the end of the year. It is an all or nothing trade (FDA approval stock could go up 50%, FDA denial stock would tank), but one worth researching. Here is the article.

Taking Aim at Skin Cancer By NEIL A. MARTIN

If approved by the FDA, the handheld MelaFind device made by Electro-Optical Sciences will revolutionize the way patients are screened for skin cancer. Look for earlier detection and fewer unnecessary biopsies. Video: Taking Aim at Skin Cancer


ONE OF THE MOST CRITICAL decisions a dermatologist can make is whether a mark on a patient's skin might be melanoma, the deadliest form of skin cancer. Until now, doctors have been forced to rely largely on their own vision, sometimes aided by a dermascope -- a hand-held magnifying glass with a light to illuminate the skin area -- to decide whether a spot or wart merits a biopsy. It involves a lot of guesswork -- and untold numbers of unnecessary biopsies.

"Skin cancer is approaching epidemic proportions," says Dr. Joseph V. Gulfo, chief executive of EOS. He thinks the company's new tool will boost the rate of early detections and reduce unnecessary biopsies.

A small Irvington, N.Y.-based medical device maker may have a better approach. Electro-Optical Sciences (ticker: MELA) has developed a computer-assisted device, currently under expedited review by the Food and Drug Administration, that could revolutionize the way doctors screen patients for cancer, and transform the Nasdaq-listed firm into a powerhouse in medical devices. If all goes according to plan, its shares could surge at least 50%.

The device, called MelaFind, consists of a hand-held imaging "gun" that emits 10 different wavelengths of light to capture images of suspect pigmented skin lesions. Because MelaFind can see where the clinician cannot -- up to 2.5 millimeters below the skin's surface -- it is expected to help catch melanomas much earlier, without the need for as many biopsies, which is good news for most patients fearful about body scarring from the procedure.


Right now, for every 30 or 50 biopsies they order up, most doctors find just one case of melanoma. The hope for MelaFind is that it will more frequently rule out melanoma before a biopsy is performed, thanks to a database of some 9,000 pigmented skin lesions. Dermatologists say it could reduce to about seven the number of biopsies performed for finding one case of melanoma.

"There will still always be the need for the experience and judgment of the dermatologist," says Doris Day, Assistant Professor of Dermatology at the NYU Langone Medical Center. "But this is a very welcomed and useful additional tool in helping us identify melanomas with greater accuracy."


MelaFind comes none too soon. Melanoma is the deadliest form of skin cancer, responsible for killing one person an hour and accounting for 80% of all skin cancer deaths. It is also the fastest growing, with over 150,000 new cases reported annually in the U.S., partly the result of excessive sun-worshiping. Hundreds of thousands of other patients visit doctors out of fear that a mole or wart might be melanoma, experts say.

"Skin cancer is approaching epidemic proportions," asserts Joseph V. Gulfo, EOS's chief executive. "Early detection is the key to survival. But medical tools to help doctors detect the malignancy have been lacking, at least until now. We believe we have found the answer in MelaFind."

THE ACCURACY OF MELAFIND'S analysis was borne out by a pivotal Phase 3 study last February. Conducted at seven locations across the U.S., the study included 1,831 pigmented skin lesions from 1,383 patients, making it the largest prospective study conducted in melanoma detection. MelaFind's specificity, or ability to accurately rule out the disease, was 2.5 times greater than that of dermatologists. The company's volatile common shares skyrocketed 80%, from $3.53 to $6.36, the day the results were announced. They've lately been trading at $7.68.

"The device has the potential to save lives like nothing we have seen in this field," says Day, who has no connection to Electro-Optical Sciences. "With the incidence of melanoma on the rise, the machine may be that much more important for the everyday practice of dermatology."


The company has already won some big fans on Wall Street. "Once the general public catches on about the ease, simplicity and accuracy of the instrument and the added benefit of avoiding unnecessary biopsies, EOS' business will shift to a higher gear," says Jeb Besser, portfolio manager with Manchester Management, a Boston hedge fund that has held EOS' shares since it went public in 2005.

Roth Capital Partners analyst Matt Dolan figures sales of the devices could hit $10 million the first year, then climb to $40 million.


Nasdaq-listed Electro-Optical Sciences is taking some of the guesswork out of the way doctors detect melanoma. Barron's Neil Martin reports.

Still, with FDA approval still pending, the stock is clearly speculative. The company now has no product on the market, no revenues and no earnings. It has had to rely on dilutive equity financings, including a $15 million deal a month ago. It now has about $21 million of cash, enough to last more than a year, given its current quarterly cash-burn rate of about $4-million-to-$5 million.

"When dealing with the FDA, there is never a sure thing, but this is probably as close to that as you are going to get," says analyst Dalton Chandler with Needham Securities. "In addition to expedited review, which means a decision within 180 days, the company has additional clinical data that look compelling and will be presented to a panel of dermatological experts in a special FDA panel meeting, probably sometime this fall.

The Bottom Line:

If MelaFind passes FDA muster, medical device maker ESO could see its share price go from near $8 to $12.
"Best bet is formal approval by the end of the year or early 2010," say Chandler. He rates MELA a Buy with a price target of $12.

See the Article

Tuesday, August 18, 2009

Why I think SKBI will do $3 EPS in 2009 and $3+ in 2010

SKBI reported earnings last Friday. 40% Revenue Growth and $0.73 EPS (excluding one time non-cash charge) See Press Release

- SKBI's business is strongest in Q3 and Q4, with Q1 and Q2 being the weakest quarters. In 2008, (after adding back $1.1m of non-recurring financing expenses to the first half of the year), 72% of SKBI's annual revenues and 76% of annual net income were earned in the last six months of 2008. A similar trend occurred in 2007.
See flow of earnings
2008 Quarterly #'s

- SKBI has grown revenue 40% year over year (YOY) in the first six months of 2009.

- SKBI Non-GAAP (excluded non-cash warrant charge and IPO costs) Net Income was $2.4m for the first six months of 2009. The comparable Net Income was $490k for the first six months of 2008. However, this included $1.1m of non-recurring financing charges so the true comparable for the first six months of 2008 is $1.6m. SKBI has grown net income 50% YOY so far in 2009.

- SKBI's Net income for the second half of 2008 was $5.1m (as mentioned 76% of 2008 total non-GAAP net income)

2009 EPS Analysis

- If SKBI grows Net Income for the last six months of the year 50% (like the first six months) they would end up with $10m of net income ($5.1m last 6 mo. of 2008 X 50% + $2.4m first 6 mo of 2009). GAAP weighted average shares outstanding for 2009 will be approximately 2.669m (1.869m were outstanding the first 6 months of 2009 and 3.469m will be outstanding the last 6 months of 2009). 2009 EPS under this scenario would be approximately $3.75.

- If SKBI grows Net Income for the last six months of the year only 25% they would end up with $8.8m of net income ($5.1m last 6 mo. of 2008 X 25% + $2.4m first 6 mo of 2009. GAAP weighted average shares outstanding for 2009 will be approximately 2.669m (1.869m were outstanding the first 6 months of 2009 and 3.469m will be outstanding the last 6 months of 2009). 2009 EPS under this scenario would be approximately $3.30.

- If SKBI Net Income is flat for the last six months of the year they would end up with $7.5m of net income ($5.1m last 6 mo. of 2008 + $2.4m first 6 mo of 2009). GAAP weighted average shares outstanding for 2009 will be approximately 2.669m (1.869m were outstanding the first 6 months of 2009 and 3.469m will be outstanding the last 6 months of 2009). 2009 EPS under this scenario would be approximately $2.81.


2010 EPS Analysis

SKBI will have approximately 3.469m shares outstanding for 2010. Let's consider the three scenarios I presented above.

- If SKBI grows second half 2009 Net Income by 50% (compared to 50% for first half 2009), they would end up with net income of $10m. Applying this 2009 net income to 2010 outstanding shares that would equal $2.89 EPS. To achieve $3 EPS in 2010 ($3 X 3.469m shares outstanding) they would need $10.4m of net income. They would need to grow net income by only $0.4m or 4% YOY.

- If SKBI grows second half 2009 Net Income by 25% (compared to 50% for first half 2009), they would end up with net income of $8.8m. Applying this 2009 net income to 2010 outstanding shares that would equal $2.54 EPS. To achieve $3 EPS in 2010 ($3 X 3.469m shares outstanding) they would need $10.4m of net income. They would need to grow net income by only $1.6m or 18% YOY.

- If SKBI second half 2009 Net Income is flat (compared to 50% growth for first half 2009), they would end up with net income of $7.5m. Applying this 2009 net income to 2010 outstanding shares that would equal $2.16 EPS. To achieve $3 EPS in 2010 ($3 X 3.469m shares outstanding) they would need $10.4m of net income. They would need to grow net income by only $2.9m or 39% YOY.

They will have significant capacity coming online in 2010 that could significantly add to net income:

Business Outlook

"We are in the process of completing our vaccine manufacturing facility and expanding our existing micro-organism facilities, which are expected to be completed later this year," stated Mr. Lu. "Once completed, the vaccine facility is expected to increase our vaccine production capacity by 2,300%, from 250 million units to 6 billion units, with a will have a projected increase in revenue of $14 million and related gross margins of 60-70% in 2010. Our micro-organism facility expansion is anticipated to increase our micro-organism and feed additives production capacity by 48.7% and add $2.7 million in revenue with a gross margin of 70% in 2010."

By my estimates, I believe SKBI will achieve around or above $3 EPS in 2009 and $3+ in 2010 and therefore is significantly undervalued with a P/E of 4-5.

Monday, August 10, 2009

Skystar Bio-Pharmaceuticals to Report Second Quarter 2009 Financial Results

Skystar Bio-Pharmaceuticals to Report Second Quarter 2009 Financial Results and Host Conference Call on Friday, August 14, 2009

Press Release
Source: Skystar Bio-Pharmaceutical Company
On Monday August 10, 2009, 7:00 am EDT


XI'AN, CHINA--(Marketwire - 08/10/09) - Skystar Bio-Pharmaceutical Company (NASDAQ:SKBI - News) ("Skystar" or the "Company"), a China-based producer and distributor of veterinary medicines, vaccines, micro-organisms and feed additives, today announced that it will report its financial results for the second quarter of 2009, on Friday, August 14, 2009 at 8:00 a.m. Eastern time.

To participate in the conference call, please dial 877-941-2321 or 480-629-9714 from the US. Participants dialing in from China can access the call toll free by dialing 10800-152-1142. Investors may also access a live audio webcast of this conference call under "Events/Presentation" on the Investors Relations section of the Company's website at http://www.ir-site.com/skystar/events.asp.

A replay of the webcast will be available approximately two hours after the conclusion of the call. The webcast replay will remain available for 90 days. An audio replay will also be available approximately two hours after the conclusion of the call and will be made available until Friday, August 28, 2009. The audio replay can be accessed by dialing 800-406-7325 or 303-590-3030 and entering passcode 4138197# from the US. For toll free access to the replay from China please dial 852-2287-4304 and enter reservation number 109110#.

About Skystar Bio-Pharmaceutical Company

Skystar is a China-based developer and distributor of veterinary healthcare and medical care products. Skystar has four product lines (veterinary medicines, micro-organisms, vaccines and feed additives) and over 170 products, with over 40 additional products in the developmental stage. Skystar has formed strategic sales distribution networks covering 29 provinces throughout China. For additional information, please visit http://www.skystarbio-pharmaceutical.com.

To be added to the Company's email distribution for future news releases, please send your request to skystar@tpg-ir.com.

Tuesday, August 4, 2009

13 Stock Ideas Blogged in 2009. Average Gain 96% in 33 Days

13 super-trades.com Stock Ideas Blogged in 2009. Average Gain 96% - Average Trading Days From Mention to Peak 33 Days
Range of Gains 45% to 153% - Range of Trading Days From Mention to Peak 2 days to 125 days

FIT 153% Gain Called at $3.50 on May 7th. Hit $8.87, 56 days later on July 23rd. Read Blog Post

LZR 140% Gain Called at $5.40 on December 23,2008. Hit $11.14, 125 days later on June 15th. Read Blog Post

RINO 129% Gain Called at $7.65 on June 16th. Hit $17.50, 37 days later on Aug 5th. Read Blog Post

UTA 124% Gain Called at $7.60 on May 29th Hit $17, 48 days later on August 4th. Read Blog Post

VIFL 122% Gain Called at $1.35 on March 26th Hit $3, 15 days later on April 13th. Read Blog Post

MRM 109% Gain Called at $6.40 on May 19th Hit $13.38, 16 days later on June 9th. Read Blog Post

SKBO.OB (now SKBI) 104% Gain Called at $11.00 on June 5th Hit $22.49, 18 days later on June 29th. Read Blog Post

DIT 92% Gain Called at $32 on April 22nd. Hit $61.46, 80 days later on July 27th. Read Blog Post

AIM 77% Gain Called at $4.20 on June 15th Hit $7.44, 2 days later on June 16th. Read Blog Post
,
SMCG 67% Gain Called at $1.35 on May 21st Hit $2.27, 11 days later on June 4th. Read Blog Post

EVK 62% Gain Called at $1.85 on June 2nd Hit $3, 4 days later on June 5th. Read Blog Post

JVA 58% Gain Called at $3.15 on May 6th Hit $4.84, 20 days later on June 2nd. Read Blog Post

NIV 45% Gain Called at $3.80 on March 17th Hit $5.50, 2 days later on March 18th. Read Blog Post

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Welcome to super-trades.com, blog home of Superman. Purpose of this blog is for me to discuss my trades and stock ideas (As well as opinions and rants on stock market related issues). I will mention the date and price I enter. As far as exits, I always try to take half off when I have some profit and if I believe in the stock, let the rest run further. I always also use mental stop limits, at which time I would exit and minimize any losses. I do not like to give price targets unless I can support them by P/E in some way or by comparison to another stock. I just post stock trades and ideas that I believe will go higher (or lower for shorts) and the reason I believe that. Individuals should have their own strategies for managing profits and losses. My stock picks tend to NOT be daytrades at all and many take time to move. I am not an investment advisor and this blog should not be considered or followed as investment advice.