Tag - ARTC

It's almost draft day for small cap up-and-comers - and I've got four contenders that could make the cut this Friday. If they do, there's a good chance these companies could see shares pop.

Yesterday I alerted you to this Friday's Russell Reconstitution, and mentioned the profit opportunity. If you missed yesterday’s issue, you can click here to get caught up. But to quickly recap: once a year the Russell indexes add and subtract companies, and the event is happening this Friday. So I’ve been doing my homework to find companies that might get listed on the Russell 2000 small cap index.

Now let’s get down to business and look at some of these potential Russell 2000 additions.

I sifted through company after company that met the criteria to be included in this year’s rebalance. And I've picked out a few that I’m excited about. These companies, in most cases, have never been listed on a major index - or even a minor index for that matter - so getting listed could have a substantial positive impact on their stock prices this Friday.

The company's I’ve picked have shown strong results recently and should hold up well even if they don’t get the coveted call from 'coach' Russell on Friday.

If they do get that call, their stocks could be looking at a very nice June indeed.

After starting the day pointing to a lower open, the DJIA closed up just slightly by 0.02% at 8,764.49 after bank shares helped to offset bad news from McDonald's (NYSE:MCD) and Apple (Nasdaq:AAPL).

The S&P 500 close down just 1/10th of one per cent at 939.14 and the Nasdaq close down just 0.38% to 1,842.40. The Russell 2000, the bellwether index for the 2,000 largest small cap stocks shed 5.57 points for a loss of 1.05% to close at 524.79.

Small cap leaders for today included Park Bancorp (Nasdaq:PFED) up 46.27%; ArtiCure (Nasdaq:ARTC) up 35.48%; and MFRI Inc. (Nasdaq:MFRI) up 32.24%.

Another more well-known small cap gainer today was SLM Corp. (NYSE:SLM), known to those with student loans as Sallie Mae, with a gain of 19.97% after TV personality Jim Cramer called SLM a "speculative stock of the year". We'll see if SLM suffers the "Cramer effect" endured by so many other stocks over the years.

Small cap decliners were lead by two technology firms: Edgewater Technology (Nasdaq:EDGW) down 14.48% and VeriSign (Nasdaq:VRSN) down 14.19%.

*****I don't like to accuse people of lying. Those are fighting words. But after last night's 60 Minutes interview with Fed Chief Ben Bernanke I am compelled to say that I don't think he's telling the truth about America's banks.

The interviewer asked point blank if Bernanke believed our banks are solvent. Bernanke responded with an unblinking, unflinching "yes."

Of course he used the recently performed "stress tests" as his measuring stick. And that's where the problems begin…

*****The stress tests were supposed to assess each bank's viability if economic conditions worsen from where they are now. So you would expect for inputs into the formulas to reflect an even more dire economy - unemployment at 12% instead of 9%, mortgage default rates of 7% instead of 4%, that kind of thing.

Unfortunately, the stress tests didn't do that. The unemployment rate used in the tests was reported to be 8%. We passed that a month ago. The stress tests used a loss rate for subprime mortgages of 21% to 28%. But 40% of subprime mortgages are currently over 30 days late. And they could hit 55% according to one industry expert, a far cry from 21%...

So when the Fed required banks to raise an additional $75 billion to strengthen their capital base, it wasn't so the banks could stay afloat if things get worse, it was so they could survive right now.

Seems to me, the economy could easily get worse. Then what? The Fed will require the banks to raise more money?

*****In early March it was Citigroup (NYSE:C) that really got this rally going. You may recall Citi CEO Vikram Pandit announcing gleefully that Citi was going to turn a profit for the first quarter. There's been much rejoicing ever since.

At the time, I speculated that Citi was, um, full of it. I surmised their profits were based on mortgage modifications, credit card debt modifications and such. In other words, I believed at the time that Citi wasn't feeling the positive effects of new lending business, but rather, was creating revenue by re-casting existing loans. In other words, I thought it was basically an accounting trick.

(Of course, just because I was skeptical didn't stop me from squeezing substantial gains from stocks as they rallied. All of my advisory services, SmallCapInvestor PRO, Top Stock Insights, TradeMaster Daily Stock Alerts and Recovery Portfolio thoroughly beat the market so far this year.)

*****Good ol' Bloomberg. They ran an article on Friday that not only confirmed my suspicions about banks accounting practices, but now, I'm considering a bank or two, which would have been inconceivable just a week ago.

The change came on April 2nd, just three weeks into the rally. The Financial Accounting Standards Board changed the rules. Banks now have greater freedom to value assets how they choose. And what's more, banks can recognize losses on some assets without counting the write-downs against earnings. And you'll recall it was the write-downs that were a big issue for banks starting at the end of last summer.

Banks are also helped when the value of its own debt falls. So when the bonds they've sold go in the tank, the banks can actually record the difference between the issues price and the current price as income, because they could theoretically buy the debt back at a lower price. Of course, no banks are doing this, but it's estimated that Citi generated $2.7 billion in pre-tax revenue from its own impaired debt. (Think about it, your assets go down and you book it as a profit? Try that with your home and a friendly I.R.S. man will pay you a visit.)

One of my colleagues, Martin Weiss, estimates that without these and other accounting rule changes, Citi would actually have lost $2.5 billion for the 1st Quarter.

And it's not just Citi. Bloomberg also reports that Wells Fargo (NYSE:WFC) boosted its capital base by $2.8 billion by simply re-valuing $40 billion of bonds.

Joseph Stiglitz, economist at Columbia University, believes the government is trying to buy the banks time to earn their way out of this mess. Clearly, he doesn't believe Bernanke is telling the truth. But it's worse.

If banks' ability to hide losses is enhanced, and nothing is really done about the losses on the books that remain, banks will remain unwilling to do much lending, which will keep them from increasing earnings and also impair the economic recovery.

*****Jason Cimpl, technical analyst at TradeMaster Daily Stock Alerts, took 5% gains on the iShares China ETF (NYSE:FXI). This is one of the investments he covered in the video I gave you last week. You'll recall I promised to tell you when he sold…

You can find out more about TradeMaster Daily Stock Alerts HERE.

That's it for today.

P.S. If you're interested in discovering profits from more China opportunities, be sure to request your own copy of my new report, "Going for Growth: 3 Top Chinese Stocks to Buy NOW". It's available HERE.

Small-cap stocks opened flat, but pushed lower amid concerns about banking stocks, which rekindles fears of the credit crunch. In addition, tech stocks were soft, which played into the selling tone.  Some of today’s small-cap gainers were CryptoLogic (Nasdaq:CRYP), Clarcor Inc. (NYSE:CLC) and Nuance (Nasdaq:NUAN).

Other Market Watch highlights today included:

• Crude oil prices tumbled some $0.90 a barrel ahead of the U.S. stock market open, which was a reversal in trend from modest gains seen in European trading.  
• Compared to 2006, foreclosure filings were up 225%.  
• RealtyTrac reported that foreclosures soared 41% in December versus year-ago levels and for the year foreclosure filings were up 81%.
• Technology shares were in retreat mode overnight, but opened up much better than feared.

Small Cap Gainers:

• CryptoLogic up 22% in pre-market after reporting that Q4 trading is in line with expectations. See (Nasdaq:CRYP).
• Clarcor Inc. is up 9%, getting an earnings-related lift. See (NYSE:CLC).  
• Warburg Pincus to purchase $175 million in Nuance common stock; Nuance shares climb over 8% in pre-market. See (Nasdaq:NUAN).  
• American Science and Engineering up 5% in pre-market after receiving $67.1 million U.S. government order for ZBV military trailers. See (Nasdaq:ASEI). 

Small Cap Losers:

• ArthroCare Corp. gapped lower and tumbled nearly 37% amid news that the surgical product maker will be de-listed from the Nasdaq exchange. See (Nasdaq:ARTC). 
• Trimble cuts Q4 revenue outlook; shares fall 15% in pre-market. See (Nasdaq:TRMB).
• Cynsosure Inc. gapped lower and fell 13% as the maker of medical treatment systems for aesthetic procedures released preliminary results. See (Nasdaq:CYNO).   
• Red Robin Gourmet Burgers Inc. is down 12% and has been sinking fast the last several sessions. See (Nasdaq:RRGB).

Small-cap stocks opened flat, but pushed lower amid concerns about banking stocks, which rekindles fears of the credit crunch. In addition, tech stocks were soft, which played into the selling tone. At 10:01 a.m. ET, the Russell 2000 (NYSE:IWM) was down 3.49, or 0.77%, at 449.68.

The weekly claims report came in at 524,000, which was fairly close to the projection of 520,000. Last week’s figure was revised upward sharply, but that was not a big surprise as most viewed last week’s number as an oddity. Elsewhere on the data front, the New York Manufacturing Survey came in at minus 22, which was slightly better than the forecast of minus 25, but which is still an awful number historically. The PPI report came in at minus 1.9%, very close to the projection of minus 2%, but no one is really worried about inflation right now anyhow. The Philly Fed survey was reported at minus 24.3%, which was better than the minus 35 forecast, but like the NY number, still weak historically.

In overseas action, European stocks were on track to decline for a seventh consecutive session, as investors were disappointed that central bank officials only slashed 50 basis points off the benchmark interest rate. The health of banks is a big concern here in the United States and also in Europe.

Speaking of banks, JP Morgan Chase and Co. (NYSE:JPM) reported better-than-expected quarterly results after the close Wednesday afternoon, but the bloom quickly fell off the rose for banks as Bank of America Corp. (NYSE:BAC) said they will need additional funds to absorb the Merrill Lynch acquisition. Shortly after the open, JPM was up 3.2%, while BAC was down 9.3%. Citigroup Inc. (NYSE:C) continued to reel, sinking some 9% shortly after the open.

Technology shares were in retreat mode overnight, but opened up much better than feared. Apple Inc. (Nasdaq:AAPL) was leading the bearish way amid reports that CEO Steve Jobs will take a medical leave of absence. AAPL shares were down 4.1% early this morning.

RealtyTrac reported that foreclosures soared 41% in December versus year-ago levels and for the year foreclosure filings were up 81% as homeowners struggled . . .

Cypress Bioscience Inc. (Nasdaq:CYPB), DryShips Inc. (Nasdaq:DRYS) and Rambus Inc. (Nasdaq:RMBS) are among the most actively traded companies in Thursday's trading among companies with market capitalizations under $1 billion.

Also included among the results: Palm Inc (Nasdaq:PALM), American Science & Engineering Inc (Nasdaq:ASEI), Force Protection Inc. (Nasdaq:FRPT), Arthrocare Corp. (Nasdaq:ARTC), AeroVironment Inc. (Nasdaq:AVAV) and Aladdin Knowledge Systems Ltd. (Nasdaq:ALDN).

Although today usually marks one of the quietest trading weeks of the year, stocks ended overwhelmingly lower at closing, pulled down by shares of retailer, tech, automotive and energy companies. Some of today’s small-cap gainers are MAP Pharmaceuticals (Nasdaq:MAPP), Palm (Nasdaq:PALM) and Colony Bankcorp (Nasdaq:CBAN).

Other Market Watch highlights today included:

• Automakers were finding out that the glow from Friday’s $13.4 billion dollar White House bailout had a short shelf-life among investors.
• Credit Suisse analysts lowered its rating on GM to “underperform” and cut their price target to $1.
• Despite the soft tone in equities, Treasury markets were relatively tame and actually were lower into the final hour of trading.
• Risk appetite on the equity side of things was also an issue today, with small caps noticeably underperforming large caps most of the day.
• Crude oil prices tumbled again today, pulled down by worries not just about the demand picture from the United States, but also from China.
• Crude oil prices lost almost 6% in U.S. trading, slipping back below $40 a barrel on the close. 

Small Cap Gainers:

• MAP Pharmaceuticals (Nasdaq:MAPP) closed up over 20% after announcing a worldwide collaboration with AstraZeneca to develop and commercialize a new drug.
• Palm (Nasdaq:PALM) gets $100 million investement, shares rallied . . .

Small-cap stocks started out what is traditionally one of the quietest weeks of the year in the stock market with a jolting decline as concerns about corporate profits and the slumping economy took a toll on retailer, tech stocks, automakers and energy shares. However, a late bounce off the worst levels of the day took some of the sting out of the decline. The Russell 2000 (NYSE:IWM) closed down 11.19, or 2.30%, at 475.07.

Risk appetite on the equity side of things was also an issue today, with small caps noticeably underperforming large caps most of the day. Part of that might have been an adjustment off the nice rise last Friday and Tuesday for small-cap fare. Still, despite the soft tone in equities, Treasury markets were relatively tame and actually were lower into the final hour of trading, which suggests investors weren’t fleeing stocks for safe-havens, they were just worried about stocks in general.

A big part of that worry was likely tied to expectations for this year’s shopping season to be dismal. Last weekend was supposed to spark a final rush of last-minute holiday shopping, but dreadful weather in many locations probably kept shoppers huddled up indoors instead of at the stores. The International Council of Shopping Centers is anticipating holiday sales to drop as much as 1%, the largest decline since at least 1969, when the group started tracking data.

The U.S. economy is heavily dependent on consumer spending, but with the economy in recession all year and unemployment climbing to the highest levels in a generation, even steep discounts at the stores haven’t been able to save holiday cheer for retailers. The S&P Retail Index tumbled more than 4% today. As for small-cap shops on the move today, Charming Shoppes Inc. (Nasdaq:CHRS) collapsed 20%, basically giving back most of Friday’s dramatic surge. That theme of giving back . . .

DryShips Inc. (Nasdaq:DRYS), Green Mountain Coffee Roasters Inc. (Nasdaq:GMCR) and USANA Health Sciences Inc. (Nasdaq:USNA) are among the most actively traded companies in Monday's trading among companies with market capitalizations under $1 billion.

Also included among the results: Arthrocare Corp. (Nasdaq:ARTC), Eagle Bulk Shipping Inc. (Nasdaq:EGLE), American Capital Agency Corp. (Nasdaq:AGNC), Fuel Systems Solutions Inc. (Nasdaq:FSYS), Accuray Inc. (Nasdaq:ARAY) and Gencor Industries Inc. (Nasdaq:GENC).

Arthrocare Corp (Nasdaq:ARTC), WNS Holdings Ltd (Nasdaq:WNS) and CFS Bancorp Inc (Nasdaq:CITZ) are among the new 52-week lows in Friday's trading among companies with market capitalizations under $1 billion.

Also included among the results: PDL BioPharma Inc. (Nasdaq:PDLI), Take Two Interactive Software Inc. (Nasdaq:TTWO), Approach Resources Inc .(Nasdaq:AREX), Gladstone Commerical REIT (Nasdaq:GOOD), Bancorp Rhode Island Inc. (Nasdaq:BARI) and Tennant Co. (Nasdaq:TNC).

Here are the new 52-week lows among small caps:

Arthrocare Corp (Nasdaq:ARTC), Eagle Bulk Shipping Inc (Nasdaq:EGLE) and PDL BioPharma Inc (Nasdaq:PDLI) are among the biggest percentage losers in Friday's trading among companies with market capitalizations under $1 billion.

Also included among the results: Ceradyne Inc (Nasdaq:CRDN), Safe Bulkers Inc (Nasdaq:SB), Citi Trends Inc (Nasdaq:CTRN), Home Inns & Hotels Management Inc (Nasdaq:HMIN), CNB Financial Corp (Nasdaq:CCNE) and Genco Shipping & Trading Ltd (Nasdaq:GNK).

DryShips Inc. (Nasdaq:DRYS), Provident Bankshares Corp. (Nasdaq:PBKS) and Arthrocare Corp. (Nasdaq:ARTC) are among the most actively traded companies in Friday's trading among companies with market capitalizations under $1 billion.

Also included among the results: Take Two Interactive Software Inc (Nasdaq:TTWO), Eagle Bulk Shipping Inc (Nasdaq:EGLE), Clean Energy Fuels Corp (Nasdaq:CLNE), Ciena Corp (Nasdaq:CIEN), TBS International Ltd (Nasdaq:TBSI) and Ceradyne Inc (Nasdaq:CRDN).

ArthroCare Corporation (Nasdaq:ARTC) is down 10% today to a 52-week low on below-average volume. The medical device company continued its multi-day decline after announcing on Thursday the U.S. Securities and Exchange Commission began an informal inquiry into the company’s financial practices. On Monday, ArthroCare announced it was restating its earnings for 2006, 2007 and the first quarter of 2008. Shares of Austin-based ArthroCare are down $2.29 today at $21.29. The stock is down more than 55% since January.

ArthroCare Corporation (Nasdaq:ARTC) is down 9% today after two law firms said they are investigating alleged fraud in the company’s revenues. On Monday, Austin, Texas-based ArthroCare announced it would restate its financial reports for 2007 and 2008. Today, the Rosen Law Firm said it has begun investigating allegations that ArthroCare violated federal securities laws through the improper reporting of revenues, MarketWatch reported. Also today, Klafter & Olsen LLP said it was investigating allegations that could turn into a class action complaint on behalf of investors.

In today’s trading, the medical device company is down $2.36 at $20.85 at 1:25 p.m. ET. Trading volume is more than three times the average at 3.6 million shares. The stock is down more 57% since January.

Stewart Enterprises Inc (Nasdaq:STEI), Arthrocare Corp (Nasdaq:ARTC) and Volterra Semiconductor Corp (Nasdaq:VLTR) are among the most actively traded companies in Tuesday's trading among companies with market capitalizations under $1 billion.

Also included among the results: Industrial Distribution Group Inc (Nasdaq:IDGR), SemGroup Energy Partners LP (Nasdaq:SGLP), Solarfun Power Holdings Co Ltd (Nasdaq:SOLF), CKX Inc (Nasdaq:CKXE), Ceragon Networks Ltd (Nasdaq:CRNT) and Crocs Inc (Nasdaq:CROX).

Here are the most actively traded companies among small caps:

Arthrocare Corp (Nasdaq:ARTC), United Community Bancorp (Nasdaq:UCBA) and Northern States Financial Corp (Nasdaq:NSFC) are among the new 52-week lows in Monday's trading among companies with market capitalizations under $1 billion.

Also included among the results: Courier Corp (Nasdaq:CRRC), ValueClick Inc (Nasdaq:VCLK), iStar Financial Inc (Nasdaq:SFI), Tejon Ranch Corp (Nasdaq:TRC), Apex Bioventures Acquisition Units (Nasdaq:PEX.U) and Lincoln Bancorp (Nasdaq:LNCB).

Here are the new 52-week lows among small caps:

Small-cap stocks edged higher Monday, bucking a downdraft in other large-cap index products as more good news in the banking arena surfaced. In addition, movement into smaller energy and commodity stocks provided a lift to the Russell 2000 (NYSE:IWM). The small-cap benchmark gained 4.55, or 0.66%, to 697.63.

Large-cap indices also were pulled down by a slump in pharmaceuticals, with Merck and Co. (NYSE:MRK) and Schering-Plough (NYSE:SGP) taking a dive ahead of earnings on news that the cholesterol drug Vitorin didn’t deliver the goods in a heart study. The slide in pharma shares came despite a jump in Genentech Inc. (NYSE:DNA) shares on news of a buyout offer from Swiss firm Roche Holdings.

In today’s action, large-cap stocks also appeared to be more troubled by a bounce in crude oil prices than did small-cap shares. Crude oil prices rose $2.16 dollars a barrel, or 1.6% to $131 as the market braced for the first storm event of the year. Tropical Storm Dolly could reach hurricane status Tuesday as it moves into the Gulf of Mexico, but for now the storm track seems unlikely to create a major supply disruption out of Gulf production.

Energy markets also likely were underpinned by a soft tone in the U.S. dollar to start the week. The greenback slipped about 0.5% against the euro and about 0.2% versus the yen, which provided a lift to some commodities markets, including gold and copper. The iPath GSCI Total Return commodities index was up about 1.5% on the day.

Once again, the bullish side of things was dominated by a surprise earnings report in the banking sector. Last week, Wells Fargo & Co. (NYSE:WFC), JP Morgan (NYSE:JPM) and Citigroup (NYSE:C) all beat the Street’s forecast and today saw Bank of America (NYSE:BAC) top expectations. The recent spate of good news on the banking front has helped to shore up negative sentiment toward . . .

Arthrocare Corp (Nasdaq:ARTC), Charlotte Russe Holding Inc (Nasdaq:CHIC) and City Bank (Nasdaq:CTBK) are among the biggest percentage losers in Monday's trading among companies with market capitalizations under $1 billion.

Also included among the results: Franklin Street Properties Corp (Nasdaq:FSP), Astec Industries Inc (Nasdaq:ASTE), Pinnacle Financial Partners Inc (Nasdaq:PNFP), Royal Bank Pennsyl Inc (Nasdaq:RBPAA), Newcastle Invest Corp(Nasdaq:NCT) and GTSI Corp (Nasdaq:GTSI).

Here are the biggest percentage losers among small caps:

Medical device manufacturer ArthroCare Corporation (Nasdaq:ARTC) is down 42% after the company said ahead of the opening it would restate its financial results for 2006, 2007 and the most recent first quarter. The restatement will reflect lower revenues including a $4 million reduction in 2006, a $20 million reduction in 2007 and $2 million reduction in 2008 first quarter. The Austin-based company sank to a 52 week low of $23.91 at 11:02 a.m. ET, down $16.12. Trading volume was more than triple the average number of shares.

Small-cap stocks pushed slightly higher on the open, lifted by positive earnings news on the banking front and by fresh M&A developments. At 10:03 a.m. ET, the Russell 2000 (NYSE:IWM) was up 2.59, or 0.37% at 695.68.

The leading indicators report, which came out at 10:00 a.m. ET, was in line with the forecast for a dip of 0.1% and had almost no immediate impact on the market. Overall, this is a very light week for economic data, but it will be a huge week for earnings results.

In what has become an ongoing trend, a major U.S. bank has posted better-than-expected earnings. This time around, the good news was from Bank of America (NYSE:BAC), as the nation’s largest retail bank topped the Street earnings forecast and jumped 7% shortly after the open. The earnings surprise follows on the heels of better-than-expected results last week from Wells Fargo & Co (NYSE:WFC), JP Morgan (NYSE:JPM) and Citigroup (NYSE:C).

Within the financial spectrum, government-sponsored mortgage lenders Fannie Mae (NYSE:FNM) and Freddie Mac (NYSE:FRE) were solidly higher this morning in the wake of weekend comments from Treasury Secretary Henry Paulson, who said that he expects Congress to quickly pass his bail-out program for GSEs. Paulson also said that 99% of the nation’s banks were healthy, but that the U.S. economy could be in a period of slow growth for “a while.”

Traders will keep a close watch on crude oil price movement this morning as the market for black gold was on the rise into the stock market opening, up about $1.50 dollars a barrel near $130.50. The energy market was walking a tightrope between soft demand concerns vs. holding a weather premium as Tropical Storm Dolly . . .

Arthrocare Corp (Nasdaq:ARTC), UAL Corp (Nasdaq:UAUA) and Ceragon Networks Ltd (Nasdaq:CRNT) are among the most actively traded companies in Monday's trading among companies with market capitalizations under $1 billion.

Also included among the results: SemGroup Energy Partners LP (Nasdaq:SGLP), Blue Phoenix Solutions (Nasdaq:BPHX), Solarfun Power Holdings Co Ltd (Nasdaq:SOLF), Canadian Solar Inc (Nasdaq:CSIQ), IMAX CORPORATION (Nasdaq:IMAX) and Crocs Inc (Nasdaq:CROX).

Here are the most actively traded companies among small caps:

RAM Energy Resources Inc (Nasdaq:RAME), Iconix Brand Group Inc (Nasdaq:ICON) and Jos A Bank Clothiers Inc (Nasdaq:JOSB) are among the most actively traded companies in Tuesday's trading among companies with market capitalizations under $1 billion.

Also included among the results: American Commercial Lines Inc (Nasdaq:ACLI), Interwoven Inc (Nasdaq:IWOV), Salix Pharmaceuticals Ltd (Nasdaq:SLXP), Arthrocare Corp (Nasdaq:ARTC), RealNetworks Inc (Nasdaq:RNWK) and Finish Line Inc (Nasdaq:FINL).

Here are the most actively traded companies among small caps: