Travel Timetable : AMP Seminars and Books

 Sept. 26

I will be away for time to visit with clients – you can be reading the AMP Books and planning your portfolio moves.

If you’d like the AMP Seminars in your city write to me at  info@jackbassteam.com

I will have new postings on my return October 15th and return all email at that time.

Learn more / earn more for your portfolio :

AMP Gold and Precious Metals Portfolio: The Gold Investor’s Handbook by Jack A Bass (Sep 18, 2012)

Available Now at AMAZON.COM ( go to : books )

Your Investment Library Will Decide Your Investment Success

 
Stock Market Magic: Building Your Apprentice Millionaire Portfolio 2012: All you need to succeed in today's stock market

Available at http://www.amazon.com

Stock Market Magic:

Building

Your

Apprentice

Millionaire

Portfolio 2012:

 

All you need to succeed in today’s stock market [Paperback]

Jack A. Bass (Author)

5.0 out of 5 stars  See all reviews (2 customer reviews) | Like 1678

Optimer Pharmaceuticals, Inc. Buy Target $ 22

English: This photograph depicts Clostridium d...

English: This photograph depicts Clostridium difficile colonies after 48hrs growth on a blood agar plate; Magnified 4.8X. C. difficile, an anaerobic gram-positive rod, is the most frequently identified cause of antibiotic-associated diarrhea (AAC). It accounts for approximately 15-25% of all episodes of AAC. (Photo credit: Wikipedia)

 

Sept. 26

Optimer Pharmaceuticals, Inc.

OPTR : NASDAQ : US$14.06

COMPANY DESCRIPTION:

Optimer Pharmaceuticals is a global biopharmaceutical company that focuses on developing and  commercializing innovative hospital specialty products. Optimer developed and commercialized Dificid (fidaxomicin), an antibiotic for the treatment of Clostridium difficile-associated diarrhea (CDAD). The company has also received marketing authorization for fidaxomicin tablets in Canada, and in the European Union under the trade name Dificlir.

Reiterate BUY, $22 target on expectation of steady revenue growth driven by unmet need and Dificid’s superior efficacy in Clostridium difficileassociated diarrhea (CDAD). We feel there is still unmet need given relapse rates associated with other Tx, rising incidence of CDAD, and growing severity of the disease. We think the pharmaco-economics of Dificid Tx will drive uptake over time, despite premium pricing.

Our $22 target is based on a DCF of Dificid/Dificlir sales and royalties.

Investment highlights   

Flat sales are expected on seasonality. Due to lower rate of infections, antibiotic use, and hospitalizations, CDAD is less prevalent in the summer, thus we are not surprised by recent swings in weekly TRx and NRx. Despite seasonality, Rx’s have rebounded from (and not repeated) June weakness with 8% and 13% m/m growth in July and August . 

Expact a strong sales pattern in the fall season, and the Oct. start of NTAP program. As use of antibiotics increases during cold & flu season, the incidence of CDAD rises (Fig. 2). Combined with NTAP approval to 1) reduce cost burden and 2) increase awareness of Dificid given CMS endorsement of the drug and its superiority, we expect steady, robust growth in Dificid Rx in the coming months.

 But on weakness – Q3 miss; could be good entry point with strong fall IMS data to drive upside. OPTR is down ~8% in Sept. and we think IMS data trends will improve in H2/12 to 1) drive appreciation into Q3 results and 2) limit/shorten any weakness at the quarter .

 

 

Google : Buy : Target Price now $ 850

Image representing Google as depicted in Crunc...

Image via CrunchBase

Sept.26

Google

GOOG : NASDAQ : US$749.16

Summary

 Google stock can continue its recent momentum on the basis of 1) better CPC trends creating an upward bias to revenue estimates in future periods, 2) continued dissipation of MMI-related apprehension and 3) multiple expansion. We slightly tweak our EPS-neutral MMI estimates and raise our price target to $850.

Key Points

CPC tends can continue momentum  or expansion. Our CPC tracker indicates that overall CPCs expanded slightly sequentially in both July and August, driven by higher desktop CPC, moderating shift to mobile, and flat mobile CPCs. 

Investors believe  that it is likely EPS-neutral at worst, and potentially accretive after sizeable recent expense reductions. We tweak our MMI estimates accordingly.

 Apple’s will continue attempts to come between iOS users and Google’s search engine. This impacts long-term potential but not near-term estimates, and we argue that GOOG gets little credit for its mobile opportunity anyway.

  Valuation

We are raising our price target from $700 to $850. Our EPS estimates are unchanged, but we have rolled our PT over to 2013 estimates and

raised our target multiple from 16x to 18x, discounted back one year.

AREVA : France Signs for Uranium , UR – Energy Waits for Permits

English: Internationally recognized symbol. De...

 

Sept. 25

Cameco  (CCO : TSX : $20.52)

Denison Mines  (DML : TSX : $1.50)

Paladin Energy  (PDN : TSX : $1.37)

Uranium One  (UUU : TSX : $2.41)

 

Global uranium miner and nuclear reactor maker AREVA announced that it has signed contracts to supply more than 30,000 tonnes of natural uranium to France’s power group EDF from 2014 to 2035, in what will be one of its largest ever uranium deliveries, the companies said. Highlighting that these contracts further consolidate AREVA’s position as a key partner to the world’s leading supplier of nuclear power, and secure EDF’s natural uranium supply over the very long-term.

Commenting on the deal, Henri Proglio, Chairman and CEO of EDF, stated, “These agreements are part of the implementation of the strategic partnership established with AREVA at the start of the year. They represent an essential contribution to the EDF Group‘s security of supply and demonstrate the unity of the French nuclear sector.”

Ur-Energy (URE : TSX : $0.99)

Decision imminent? 

In the last couple trading days, volume has picked up significantly in shares of Ur-Energy. The company has been patiently waiting multiple years to receive the final permit needed before commencing construction at its Lost Creek uranium project in Wyoming.

In late August, Ur-Energy shares jumped after the company announced that it had received its Lost Creek Final Environmental Impact Statement (EIS) from the U.S. Bureau of Land Management (BLM). The Final EIS is not a decision document and the company stated that the Record of Decision (final hurdle!) is expected to be signed shortly after the Final EIS availability period closes thirty 30 days from receiving the Final EIS (August 17).

Also of note, a couple weeks  ago it was reported by a local Wyoming news service that the Wyoming Business Council had voted to support Ur-Energy’s request for $34 million in State-funded bonds. One Bay Street analyst commenting at the time, noted that the funds from the bonds “will be used for the construction of the Lost Creek mine and should provide adequate funding to bring the project into production.” The analyst further added, “If Ur-Energy receives the bonds as anticipated, this will alleviate most of our balance sheet concerns.”

 Related articles

GEVO Target $ 6.00

Isobutanol

Isobutanol (Photo credit: Wikipedia)

 

Sept. 25

Gevo

GEVO : NASDAQ : US$3.31

COMPANY DESCRIPTION:

Gevo seeks to produce isobutanol, a key building block in the production of valuable chemicals and fuels, from a variety of cellulosic and non-cellulosic carbohydrate sources containing fermentable sugars.

As is typical with the commercial ramp of new production technologies, process refinements and optimization efforts take time to fully implement. While the Street could be disappointed with management’s more cautious approach (production targets pushed to ’13), we stay positively focused on the longer-term risk/reward.

Our target goes to $6.00 on higher execution risk and push-out of profitability estimates.

Investment highlights

Not a total surprise, Gevo announced plans to temporarily shift Luverne production back to ethanol (preserving cash) while further optimizing

the isobutanol process (using lessons learned from recent start-up).

Prior targets for year-end (monthly run-rate of ~500K-1.2M gallons) thus get pushed to ’13 as related adjustments for sterilization and process control get implemented. As a reminder, positive EBITDA for Luverne is targeted at ~750K-1M gallons.

Our Street-low estimates adjust accordingly, while we expect to gain additional clarity following this Friday’s plant tour. Specifically, our 2012 estimates tweak to $31.9M/$(2.05) from $29.3M/$(2.03), while 2013E goes to $29.4M/$(1.58) from $53.0M/$(1.37) and 2014E to $77.4M/$(0.85) from $101.5M/ $(0.74).

Valuation

We derive our $6 target (from $8) by applying a 3x EV/sales multiple to our 2014 revenue estimate of $77M, discounted back two years at 20%.

Risks

Execution against milestones, commodity cost + price volatility, future fundraising, Butamax litigation

Bullish Trends Emerge in the Energy Sector

English: United States President Barack Obama ...

English: United States President Barack Obama signs into law the American Recovery and Reinvestment Act of 2009 as Vice President Joe Biden looks on. (Photo credit: Wikipedia)

By Guest Editor Eve Harding

Sept. 25

Judging by the recent trading volumes observed in energy stocks, a bullish sentiment seems to have captivated traders and investors. This sector has faced some challenges in the last couple of years, particularly with regard to tension in the Middle East, disappointing news from solar power outfits, and oil prices that have not fully recovered from their record levels in 2008. Still, 2012 has been a good year for energy traders, and recent developments in this sector point to a bullish future for investors.

The first two weeks of September were very positive for investors following benchmark indicators such as China‘s CSI 300 Energy Index, as well as the NYSE Arca Oil Index. One of the highlights took place on Friday, September 21st with Chevron (NYSE:CVX). The bullish sentiment has been keen on this stock, and a brief run-up of crude oil prices helped the California-based company reach its all-time high of $118.53, before ticking down to close at $117.80. 

Prior to Chevron’s strong performance on Friday, the NYSE Arca Oil Index had experienced a drop after two weeks of solid gains, particularly after the announcement by the United States Federal Reserve Board of that nation’s intention to engage in a third round of quantitative easing. Chairman Ben Bernanke‘s announcement was well-received by energy regulators in China, who approved their own version of a stimulus focused directly on massive infrastructure projects. These two interventions by two major central banks are expected to boost the prices of raw materials, commodities and energy around the world. 

Just like the NYSE Arca Oil Index, the CSI Energy 300 posted gains in September, although the Arca Oil Index ended the third week of September lower due to earlier missteps by other oil service companies. This setback is a reminder to energy traders that the sector is still very vulnerable in terms of volatility, but the overall sentiment remains bullish.

Two Oil Stocks to Watch

Chevron is getting high marks from various analysts. Its record high on Friday was fueled by a report issued by J.P. Morgan Equity Research the day before. According to J.P. Morgan, Chevron’s performance merits a price target of $123 per share, a full $3 higher than previously estimated. Other analysts from Oppenheimer and Barclays essentially echoed the sentiment by J.P. Morgan.

Investors interested in Chevron may also want to consider Superior Energy Services (NYSE:SPN), an affordable providers of services to the oil and gas drilling industries. Recent share prices for Superior Energy have hovered around $24, but analysts from Williams Financial Group recently issued a price target of $30 based on recent acquisitions that will put the company in line with larger global competitors in the long-term. 

An Active Exchange-Traded Fund (ETF) to Watch

The First Trust North American Energy Infrastructure ETF (NAR:EMLP) has been the most popular energy ETF this year according to a recent report published in Barron’s. Investors who are bullish on this ETF share some strong beliefs in a recovery of the American economy that will be fueled by the energy sector. This is not such a far-fetched position, considering the factors the U.S. needs for such a recovery to take place:

  • Global demand for fuel should increase or otherwise stabilize.
  • Oil service companies will have easy access to capital.
  • The American energy infrastructure will continue to grow.
  • Interests rates will remain low.

Of all the factors above, investors can take solace in the fact that the U.S. Federal Reserve has strong motivations for doing everything possible to keep interest rates low. That is one of the major motivations behind QE3, and that will make it easier for energy companies to borrow funds to finance their projects. Global demand for fuel cannot be seen as a guarantee, but the administration of President Barack Obama announced in August that seven energy infrastructure projects would be expedited in the U.S. These projects, however, are of the clean energy variety. 

In the end, the long-term bullish trend on the energy sector may end up shifting its focus to other energy sources as stock brokers and investors continue to look for an edge. Oil is the most significant factor in the current bullish equation, but investors should keep in mind that China has a lot riding on coal production, while the U.S. is significantly stepping up domestic production of shale gas.

Caterpillar Cuts 2015 Outlook

English: Fortescue Metals Group - GE CW44 DASH...

English: Fortescue Metals Group – GE CW44 DASH 9 locomotives, Unit 012 leading, on a loaded 220 wagon, 2.6km long, 31,784 ton, iron ore train. Location Pilbara region, Western Australia. May 2008. (Photo credit: Wikipedia)

 Sept. 25

Caterpillar Cuts 2015 Outlook as Mining Spending Falls

Caterpillar Inc. (CAT), the world’s biggest construction and mining equipment maker, cut its forecast for 2015 earnings after commodity producers reduced capital expenditure.

Caterpillar said profit will be $12 to $18 a share, compared with a previous projection of $15 to $20. While a global recession remains possible, Caterpillar is forecasting moderate and “anemic” growth through 2015, Chairman and Chief Executive Officer Doug Oberhelman said today in a presentation to analysts at the MINExpo industry conference in Las Vegas. Construction activity in emerging markets will probably show modest improvements, he said.

“We’ve seen a slowing in economic growth that was more than we expected,” he said. “We think ‘13 could look like 2012 in terms of worldwide economic growth.’’

Oberhelman has bet on a continuation of growth in commodity demand by buying mining-equipment maker Bucyrus International Inc. for $8.6 billion last year and agreeing in November to acquire ERA Mining Machinery Ltd. in China. His plans are coming under pressure as mining companies cut capital expenditures after economic expansion slowed in China, the world’s largest user of coal and metals.

Shares Drop

Global mining capital expenditures will drop 14 percent through 2014 from a peak of $136 billion this year, JPMorgan Chase & Co. said in a Sept. 21 report. BHP Billiton Ltd., the world’s biggest mining company, last month delayed an estimated $68 billion of projects. Australian iron-ore producer Fortescue Metals Group Ltd. on Sept. 4 cut its full-year spending forecast by 26 percent to $4.6 billion.

Caterpillar fell 2.2 percent to $88.87 at 6:30 p.m. after the close of regular trading in New York. The shares are almost unchanged for this year while the Dow Jones Industrial Average, of which Caterpillar is a member, has advanced 11 percent

Natural Gas Storage Numbers – Forecast

natural gas-powered old truck

natural gas-powered old truck (Photo credit: nickherber)

Sept. 24

Bragging Rights

If you look at the back of the two recent Apprentice Millionaire books –  ” THE AMP Portfolio ”  and        “The  AMP Gold and Precious Metals Portfolio  ” you can read that in recent years I have been consistent about my call for a fall in natural gas prices – and a rise in the price of gold.

Natural Gas

We are going into the fall…no demand for airconditioning –  no demand yet for heating, and gas should weaken and sell off.

The big question is, how cold a winter will we have?

Pathway Asset Management put these facts in, when trying to figure out what next for the price of natural gas.

They write, “Working gas in storage was 3,496 Bcf as of Friday, September 14, 2012, according to EIA estimates.

This represents a net increase of 67 Bcf from the previous week. Stocks were 320 Bcf higher than last year at this time and 278 Bcf above the 5-year average of 3,218 Bcf.

By Regions:

In the East Region, stocks were 76 Bcf above the 5-year average following net injections of 44 Bcf. Stocks in the Producing Region were 150 Bcf above the 5-year average of 974 Bcf after a net injection of 20 Bcf. Stocks in the West Region were 52 Bcf above the 5-year average after a net addition of 3 Bcf.

At 3,496 Bcf, total working gas is above the 5-year historical range.”

Juniors and Chesapeake shareholders alike are praying for a cold winter – because today they are selling natural gas at less than the cost of production . Large players like CHK in fact are obligated to keep their drilling program up or lose their leases . Exxon / XTO  (as we wrote ) has enough discipline to walk away .

For the well capitalized ” players” there are bargains to be found on the stock exchange beyond that of any drilling program. For the less fortunate there is prayer.Pick the winners from our portfolio selections in ” The Apprentice Millionaire Portfolio “

 
Stock Market Magic: Building Your Apprentice Millionaire Portfolio 2012: All you need to succeed in today's stock market

Available at http://www.amazon.com

Stock Market Magic:

Building

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Watson Pharmaceuticals Taget $100

Actavis

Actavis (Photo credit: Wikipedia)

Watson Pharmaceuticals  Sept. 24

WPI NYSE

COMPANY DESCRIPTION:

Watson Pharmaceuticals (WPI) is an integrated global pharmaceutical and drug company that develops, produces and markets generic, brand and biological pharmaceutical products, specifically focused on urology and women’s health.

Call volume on WPI has been heavy and we expect focus to remain high given the event heavy path into year-end. We’ve taken a deeper look at our model and upcoming catalysts, and consistent with  “A thematic look at specialty pharma positioning amidst macro uncertainty,” 

AMP continue to like the name into year-end.

The 2013-2015 pro forma EPS estimates unchanged, reflecting a 22% CAGR and 3-5% above consensus but with now greater confidence in upside. We take a closer look at what can take WPI higher with EPS sensitivity around potential upside using 2014 as a baseline year.

(1) Higher Actavis accretion than reflected in Street numbers. Based on lower financing costs, lower tax rate and incremental synergies (all believe likely) we’ve identified ~ $0.75 in 2014E EPS potential upside (8% p/f) with much of it likely to spill into Street p/f EPS over the next couple months.

(2) Upside optionality on “core” products. We continue to get questions on Gx Concerta and Lidoderm. Rather than risk, we see potential upside of ~$1.00 in 2014E EPS (10% p/f) relative to our (and likely Street’s) more conservative competitive assumptions, adding further comfort.

(3) Several catalysts over the coming months. In addition to important product updates, look for (1) debt pricing (~ early Oct), (2) Actavis closing and potential accretion update (~ H1 Nov) and (3) initial 2013 guidance that could come via analyst day in early Jan per prior years.

(4) Valuation that still leaves a low hurdle despite upward EPS bias. Our $100 target reflects ~10.5x P/E and ~9x EV/EBITDA our 2014 p/f forecasts implying WPI would trade at a pre-deal P/E level despite improved positioning and growth. No change to our 2012E-2015E annual EPS though we have moved $0.08 from Q3/2012 to Q4/2012 to reflect removal of Gx Actos exclusivity against a stronger core generic Q4.

KB Homes : California Dreamin’

 

Brancifort Creek development

Brancifort Creek development (Photo credit: Richard Masoner / Cyclelicious)

KB Home (KBH : NYSE : US$15.31)

Sept. 24

 

Shares of KB Home got a lift after the homebuilder posted a surprise Q3 profit and said that its backlog rose to a four-year high on the back of better pricing and demand in the housing market.

Earnings came in at $0.04 per share on  revenue of $424.5 million while analysts were expecting a loss of $0.16 on revenue of $430.0 million. In addition to the positive earnings, the company said its revenue backlog as of August 31 had increased 33% year-over-year to $744.7 million.

CEO Jeffrey Mezger commented, “It is clear that the recovery in housing is gaining momentum across the country as inventory levels are declining and home prices are on the rise.” He went on to say that KB is seeing “dramatic improvement” in California, its largest market, where foreclosures had acted as a headwind in recent quarters. Net orders rose 3% to 1,900 homes while average selling prices increased 8% to $245,100, marking the ninth consecutive quarter of year-over-year price increases.

Prior to the release of the results, KB had the fourth-largest short position of S&P 1500 stocks with 44.41% of its float shorted as of August 31.

 

 

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