Among the biggest winners in Wednesday's early trading are
Neurocrine Biosciences (Nasdaq:
NBIX
)
,
Sunoco (NYSE:
SUN
)
and
Ener1 (NYSE:
HEV
)
.
|
Top Percentage Gainers -- Wednesday, June 16,
2010
|
|
Company Name (Ticker)
|
Intra-Day Price
|
Intra-Day
% Gain
|
52-Week High
|
52-Week Low
|
| Neurocrine Biosciences (Nasdaq:
NBIX
) |
$5.37 |
+14.7%
|
$5.60 |
$1.94 |
| Energ1 (NYSE:
HEV
) |
$3.66 |
+7.2%
|
$7.90 |
$2.75 |
| Sunoco (NYSE:
SUN
) |
$34.19 |
+6.5%
|
$34.97 |
$21.45 |
|
*Table includes companies with minimum market
capitalizations of $200 million and three month trading
volumes of at least 100,000 shares. All percentage returns
are listed as of 11:00AM Eastern Standard Time . Click on
ticker symbols for up-to-the-minute price quotes and
percentage gain data.
|
A Key Endorsement
Small biotech firms have two goals: prove that their drugs are
effective and safe, and find a large partner to help bring the
drugs to market.
Neurocrine Biosciences (Nasdaq:
NBIX
)
has met both of those goals in just three weeks. We
told you on May 25
that the company's drug that boosts fertility of otherwise
infertile women showed very strong results in Phase II clinical
testing. We concluded our assessment by noting that, "A large
partnership
agreement stands as the next near-term catalyst. Shares should be
bought in advance of such an agreement."
That window has just closed.
Abbott Labs (NYSE:
ABT
)
has announced a wide-ranging partnership that will net Neurocrine
$75 million now, and up to $500 million more down the road.
Neurocrine still must complete Phase III trials, which is often the
hardest hurdle to pass. But if successful, this drug should find a
fairly large potential market, as no competing approaches exist.
The Abbott imprimatur is pushing shares up +10% today.
Action to Take -->
The near-term gains have been made in the stock, and you couldn't
be faulted for taking profits if you followed our advice. As time
passes, shares may pull back in the face of market weakness, which
would create a better entry point.
------------------------------------
Sunoco Unlocks Value
Over the last few decades, a wide range of conglomerates sought to
break themselves into smaller pieces as they realized that
investors failed to fully grasp the value of disparate businesses.
This was known as "the
conglomerate
discount."
Sunoco (NYSE:
SUN
)
has belatedly realized that breaking up is the path to a higher
stock price. Shares have fallen sharply from their 2006 peak of
$95. But they're up +8% in Wednesday trading to a two-year high as
Sunoco announced plans to spin off its coking business. Coke is a
high-grade form of coal used to generate intense heat at
steel-making plants.
The coking business was one of the few bright spots on Sunoco's
income statement
. It's oil refinery and gas station businesses have been in the
midst of a tough slog, though management notes that operation are
improving their as well.
Action to Take -->
Sunoco will be increasingly reliant on its oil refinery activities.
And that industry has been characterized by very low profit margins
thanks to weakening demand for gasoline. As cars and trucks are
expected to get even more efficient in coming years, demand for
gasoline is unlikely to sharply rebound, making this a fairly
unappealing investment.
------------------------------------
Good Call, Bad Timing
In
late May, we suggested
that investors had been too harsh in dumping shares of advanced
battery makers
A123 Systems (Nasdaq:
AONE
)
and
Ener1 (NYSE:
HEV
)
.
Shares slumped further from there, but have bounced back nicely
this week. Shares of Ener1 are up nearly +5% to $3.60 on Wednesday
after a +12% gain on Tuesday. Analysts at Needham & Co.
initiated coverage of the stock on Monday with a $6 price target,
noting that "the company is positioned to become a major supplier
of lithium-ion (li-ion) battery systems into a growing passenger
vehicle market."
Ener1 already has key relationships with Norwegian electric car
maker THINK, Volvo and China's largest battery manufacturer. As
production volumes ramp up to support those relationships,
Needham's Michael Lew thinks other auto makers will sign on as
customers as well.
Action to Take -->
These stocks have taken quite a drubbing and remain close to their
52-week lows. Their outlooks are quite bright, and if you stay
focused on the long-term, you may see considerable upside as the
electric and hybrid car markets take off.
-- David Sterman
Staff Writer
StreetAuthority
Disclosure: David Sterman owns shares of Neither StreetAuthority
and LCC nor the editor hold positions in any securities mentioned
in this report..