Tag - SVA

The major indices were essentially flat for the day, which is to say, they performed better than yesterday. The Dow Industrials finished with a 30 point loss, the Nasdaq posted an 1 point loss, and the S&P 500 finished with a 3 point loss. The small cap benchmark, the Russell 2000 finished with a 1 point decline.

The top small cap gainer was Vista Gold (AMEX:VGZ), up 32%. MDS Inc. (NYSE:MDZ) which posted a 29% gain after it announced one of its divisions has been sold. Acquisition news also took biotech Sepracor (Nasdaq:SEPR) up 26%. Rounding out the top gainers was K V Pharma Class A Shares (KV-A) up 32%, and The Medicines Company (Nasdaq:MDCO), up 28%.

In spite of the recent weakness in the stock market, the sudden surge in Merger & Acquisition activity should be considered bullish.

On the losing side of the small cap market today was Imperial Industries (Nasdaq:IPII), which lost 27%. Imperial makes building supplies, which should explain the weakness.

Shipping company DHT Maritime (NYSE:DHT) lost 21% after posting weak earnings. Tech company SeaChange International (Nasdaq:SEAC) lost 16% on poor earnings.

In light of the recent worry about China's real estate market, it should be no surprise to see China Housing & Land (Nasdaq:CHLN) on the loser list with a 15% loss.

Finally, in typical "buy the rumor, sell the news" action, biotech Sinovac (AMEX:SVA) fell 17% after it signed a supply agreement for its swine flu vaccine with a South Korean company. Terms of the deal weren't disclosed, which no doubt disappointed investors.

Now for other market news…

*****That was quite a sell-off yesterday. We haven't seen a drop that big since the early days of July. Volume was pretty heavy, too. And no sector was spared.

Briefing.com reports that 95% of the S&P 500 was in the red by the close. Financials seemed to have borne the brunt of the decline. The Financial Select Sector SPDR (XLF) was down 5.3%. But if you were holding an inverse ETF like the UltraShort Financial ProShares (SKF) like TradeMaster Daily Stock Alert members were the day wasn't so bad.

The most troublesome aspect of yesterday's sell-off is that it came amidst some pretty good news. The ISM Manufacturing Survey came in much better than expected and pending home sales for July was also much better than expected. Plus, the Wall Street Journal is reporting that the IMF has raised global growth estimates for 2010 again to just below3%.

Of course, oil prices responded to the manufacturing data by posting an early 2% gain. Unfortunately, that turned into a 2.7% loss as the day went on.

*****Cash for Clunker Stocks dominated yesterday's action. Bank of America lost 6%, Citigroup (NYSE:C) was down 9% and AIG (NYSE:AIG) lost 21%. Even more startling, Citi accounted for 20% of the volume on the NYSE.

Such concentrated selling in the financials sector shouldn't be that surprising. Even the bulls have been scratching their heads at the gains AIG and Citi have been making. It remains to be seen if investors can let some of the air out of these stocks without taking the whole market down.

*****Oil is rebounding a bit today. Inventories fell 3.2 million barrels last week.

British Petroleum (NYSE:BP) announced a major find in the Gulf of Mexico. Some are saying it could be more than 3 billion barrels. Along with the massive find by Brazil from a couple weeks ago, we might start to wonder if new supply might affect prices.

Until tomorrow,

Ian Wyatt
Editor
Small Cap Investor Daily

P.S. My book The Small-Cap Investor: Secrets to Winning Big with Small-Cap Stocks is coming out on September 14 - visit www.smallcapbook.com to learn more. You can also follow me on http://twitter.com/ianwyatt 

Ian Wyatt is the Chief Investment Strategist of SmallCapInvestor.com and author of The Small-Cap Investor: Secrets to Winning Big with Small-Cap Stocks. You can learn more about his book and receive small-cap stock picks at www.smallcapbook.com.

"One Chinese sector being relatively ignored by Wall Street is the biotech industry," notes Keith Fitz-Gerald. In The New China Trader, he looks to a biotech speculation -- Sinovac (ASE:SVA).

The government knows that the wheels could fall off the bike rather quickly if average Chinese citizens begin to see a dramatic reversal in their health and happiness.

"As a result the Chinese Central Government's is participating in a large-scale effort to improve public health.

"That leads us to our recommendation for Sinovac, a fully integrated, profitable China-based biopharmaceutical company that focuses on the research, development, manufacturing and commercialization of vaccines that protect against human infectious diseases.

"Their portfolio of regulatory-approved products consists of vaccines against the hepatitis A, hepatitis B and influenza viruses.

"In 2002, they launched their first product, Healive, which was the first inactivated hepatitis A vaccine developed, produced and marketed in China.

"In 2005, they received regulatory approvals in China for the production of Bilive, a combination hepatitis A and B vaccine, and Anflu, a split virus influenza vaccine.

"In April 2008, they received regulatory approvals in China for the production of their whole viron pandemic influenza vaccine.

"SVA is not a shot-in-the-dark biotech company that hasn't earned any money yet. The firm's recent filings indicate annual increase in sales on 38.62% which is in line with the type of increase that history suggests precede a very solid price gains.

"Looking at additional numbers reflects solid management as well, as is evidenced by a very healthy operating margin 33.51% and ROE of 20.1%.

"A quick glance at the amount of shares outstanding reflects that 14.02% . . .

While it's well known that international corporate giants are funneling big bucks into research institutes in China, lesser known is the Chinese government's efforts to make the nation a world leader in medicine, science and technology. Examples of its push to beef up innovation can be seen at state-run research labs such as the China Academy of Sciences, a broad collection of R&D facilities currently undergoing significant reforms and expansion that officials hope will become a major high-tech incubator. The Academy already has a leadership role in the field of biotech.

One of the Academy's partners in China's race to innovate in the biotechnology industry is Sinovac Biotech Ltd. (AMEX:SVA). Sinovac researchers have worked closely with government scientists to tackle illnesses (such as the outbreak of bird flu in Hong Kong). The company does business under its majority-owned subsidiary, Sinovac Beijing, and its wholly owned subsidiary, Tangshan Yian. A leading domestic vaccine producer, the biopharmaceutical company is engaged in the research, development and commercialization of agents that protect against human infectious diseases including hepatitis, influenza and SARS.

Sinovac's portfolio of State Food and Drug Administration-approved products consists of Healive, a vaccine against hepatitis A virus; Bilive, which is used to prevent infection from hepatitis A and B; and Anflu, a seasonal influenza virus vaccine. Four pipeline drugs are also in development. They include two vaccine candidates for the H5N1 strain of bird flu (pandemic influenza) as well as a vaccine for the Japanese encephalitis virus, and another for SARS (Severe Acute Respiratory Syndrome), a potentially deadly virus with flu-like symptoms that attacks the lungs.

Compared with Big Pharma drugs designed to battle cancer, high blood pressure, depression and high levels of bad cholesterol, pharmaceuticals such as those produced by Sinvac maintain a decidedly lower profile. But the vaccine maker doesn't seem to mind, especially given growing concerns about the threats posed by hepatitis, Avian flu, SARS and drug-resistant new viruses.

After all, in the aftermath of the 7.9 magnitude earthquake that rocked China on May 12, business was a good for Sinovac, as provincial CDCs stocked up on vaccines to inoculate children against possible outbreaks of hepatitis A and B. Immediately after the disaster, China's Ministry of Health purchased $2.86 million worth . . .

Shares of Sinovac Biotech Ltd. (Amex: SVA) are gaining ground in pre-market trading after the China-based biopharmaceutical company said that it received approval from the China State Food and Drug Administration to move forward on trials for its pandemic influenza vaccines.

Specifically, Sinovac received approval from the China State Food and Drug Administration to begin Phase Ib and II trials of its pandemic influenza (H5N1) whole viron inactivated vaccine and Phase I and II trials of its pandemic influenza (H5N1) split vaccine.

Shares of Sinovac (SVA) gained $0.50, or 9.17%, to $5.95 ahead of the opening. Biotech Shares of Sinovac Biotech have been trading in the range of $2.25 to $8.33 for the past 52 weeks.