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Possible Japanese Candlestick Chart Trades for December 27, 2007

Thu, 27 Dec 2007 18:16:24 EST

Possible Japanese Candlestick Chart Trades for December 27, 2007 - by anderson

Thank you very much for the emails and messages of support and encouragement. You are helping me to fine tune my trading skills. Keep those cards and letters coming!

What do I do on a Dow Down 200 market, with the S&P losing 1.5%? Simple. Keep going, fine tune my stop loss points, look for opportunities, and even (see below) make a trade or two. Even on the worst day of 2007, with the Dow down 400 points, there were still thousands of stocks that went up. Today, the dry bulk shippers were on fire, because of an an investment by DryShips (DRYS - up 6.5%) in a Norweigian bulk shipper. You would have done as well in Paragon (PRGN) or Diana Shipping (DSX), both recent Jim Cramer picks. Full disclosure: I am long DRYS.

Some more of my rules:
1) I am not a day trader. After I buy, I want to hold for at least one day, so I can analyze at least one candle. I buy only if the stock trades consistently (for about a half hour or so) above its previous day's close. This may seem against the idea of buying for the lowest price, but I'd rather see that the stock has legs. If the price never gets there, I don't make the trade. After the buy, I set a stop loss that's below the previous day's low with the idea that if I'm stopped out there must have been a real bad reversal during the day. Hopefully, that's a rare occurrence.

2) I look for stocks that are a bit beaten down, with a tentative price target the most recent high. I'm looking for stocks that can retrace to this level. If the stock starts to lose momentum, I sell.

3) As the stock goes up, I adjust the stop loss point to eventually cross break-even and then lock in profits. I don't sell at the market but rather at a stop loss very close to the market price.

UPDATE ON PRIOR TRADES

URI had some news that could potentially help its stock price. Moody's upgraded their debt because the Cerberus merger failed. Though the market was down 1.5%, URI closed at 18.42, down only 0.5%. I also raised the stop loss point on URI from 17.50 to 18.

TRADES TODAY

I bought BioAvail (BVF) at 13.45, with a stop at 12.50. BVF closed at 13.42, essentially flat - good performance for today. Since UNTD and CROX did not sustain my price target, I did not pull the trigger.

POSSIBLE TRADES FOR DECEMBER 28, 2007

I will be looking at the price action in these three stocks, which generated a favorable candle pattern today, and closed up in spite of Benazir Bhutto's assassination and the durable goods report.

1) UnderArmour (UA) generated a bullish harami, closing at 43.06. I will buy if it sustains a price of 43.15 with a target of 60.

2) Guess (GES) generated a hammer after a downtrend - a bullish signal. It closed at 40.40. My target is 46.

3) NutriSystem (NTRI) generated a bullish engulfing pattern, closing at 28.09. I will buy if it sustains a price of 28.15 with a target of 32.

Three Japanese Candlestick Chart Trades for December 26, 2007

Mon, 24 Dec 2007 21:22:11 EST

Three Japanese Candlestick Chart Trades for December 26, 2007 - by anderson

Based on my candlestick chart analysis, and reinforced with some Western style technical analysis, I am suggesting the following 3 trades for Wednesday, December 26, 2007. Even though the market was open just until 2 pm on light volume, I think these show favorable patterns. I use a 1 month candlestick chart for my analysis.

1) Echostar (DISH). DISH has been in a downtrend, from 43 on December 3, to its close on December 24 at 37.68, on a bullish piercing pattern. The downdraft gives fuel to this bullish sign. My plan is to buy at the market at 37.80 or higher if DISH trades there in the early morning. My target is price 44, its 200 day moving average, but I will sell at the next day market open if a negative daily candle (close price lower than open price) appears before then. If DISH goes above 44 with no negative candles, I will still hold.

2) United Rentals (URI). URI fell sharply, from a high of 34 in mid November, to a low of 18, because the deal with Cerberus fell through. The news that URI will seek a $100 million payout from Cerberus as a penalty for pulling out sent the stock into a bullish reversal (a bullish harami on the candlestick chart). This combination of a nearly 50% pullback with a reversal should send the stock higher, retracing much of the move. URI closed at 18.70 on December 24. I plan to buy at 18.90 or better if the stock reaches this price before 11 am, with a target price around 34, but sell on any negative rectangle at the open the day after it occurs.

3) Focus Media (FMCN). FMCN showed an extremely sharp bullish kicker on December 24. It closed at 58.96. I plan to buy in the early morning if FMCN can sustain a price of 59.10 or more. It traded as high as 66 in November. That's my target price. I'll sell on any negative rectangle, as with the other trades.

I'll report on these trades after the close on December 26, and then later as conditions warrant. I welcome all comments.

Anyone use Japanese candlestick chart analysis?

Fri, 21 Dec 2007 11:18:51 EST

Anyone use Japanese candlestick chart analysis? - by anderson

I've become fascinated by Japanese candlestick chart analysis. It's a great way of seeing who won the fight between the bulls and the bears on any given day (or week, or month, or minute), and then how to spot when a trend (up or down) is starting, continuing, or ending. Here's a link to a free tutorial:

http://www.tradingeducation.com/candlestick_tutorial.asp

Rather than trying to anticipate the next up move, why not react to the move as soon as it starts? Find out when the train is at the station, hop on for the ride, and get off when the ride is over.

What's nice is that you can use this technique on anything that trades continuously in a liquid market - stocks, bonds, currencies, futures, etc. It's just a question of your time frame, risk tolerance, and attention span.

Thought I'd pass this along.
Ira

Bank of America Corporation - Great for long term

Sat, 01 Dec 2007 13:47:04 EST

Bank of America Corporation - Great for long term - by anderson

Bank of America Corporation (NYSE:BAC)

A very good stock to buy for the long term.

Bank of America is one of the world's largest financial institutions, serving individual consumers, small and middle market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk-management products and services. The company provides unmatched convenience in the United States, serving more than 57 million consumer and small business relationships with more than 5,700 retail banking offices, more than 17,000 ATMs and award-winning online banking with more than 23 million active users. Bank of America is the No. 1 overall Small Business Administration (SBA) lender in the United States and the No. 1 SBA lender to minority-owned small businesses. The company serves clients in 175 countries and has relationships with 99 percent of the U.S. Bank of America provides services its customers through three business segments: Global Consumer and Small Business Banking, Global Corporate and Investment Banking, and Global Wealth and Investment Management. At September 30, 2007, the Corporation had $1.6 trillion in assets and approximately 198 thousand full-time equivalent employees.

During the current fiscal major tremors occurred in the financial markets, including leveraged finance, sub prime mortgage, and the commercial paper markets. These conditions created less liquidity, a flight to quality, greater volatility, widening of credit spreads and a lack of price transparency. The Corporation's Capital Markets and Advisory Services business within the Global Corporate and Investment Banking segment operates in these markets through exposures in securities, loans, derivatives and other commitments and hence will continue to be adversely impacted by this market disruption. To overcome these problems a lot more time is required for the markets to return to a more normal environment with tighter credit spreads and greater liquidity.

Kenneth D. Lewis is the Chief Executive Officer and President. He has been with this bank for several years now. Prior to this he worked with NationsBank Corporation.

Barbara J. Desoer is the Chief Operations Officer. California Retail Bank provided employment before Bank of America.

Its top competitors are Citibank, Wachovia and Bank Of Montreal, Cass Information Systems, Royal Bank of Canada, West Coast Bancorp and CPB. For the third quarter net income totaled $3.7 billion, or $0.82 per diluted common share, for the three months ended September 30, 2007, decreases of 32 percent and 31 percent from $5.4 billion, or $1.18 per diluted common share, for the three months ended September 30, 2006. Net income totaled $14.7 billion, or $3.25 per diluted common share, for the nine months ended September 30, 2007, decreases of seven percent and six percent from $15.9 billion, or $3.44 per diluted common share, for the nine months ended September 30, 2006. The provision for credit losses increased $865 million to $2.0 billion and $1.6 billion to $5.1 billion for the three and nine months ended September 30, 2007.

This company and its stock has been performing reasonably well for the last five years. Its tryst with the sub prime mess has affected its profitability albeit for the short term in comparison to its peers. Because of its foray into emerging markets like China and India its business fortunes will change in the coming years. A long time investment in this company is strongly advised.

Altera Corporation - trouble

Thu, 29 Nov 2007 14:06:38 EST

Altera Corporation - trouble - by anderson

S&P500 stock - Altera Corporation (NASDAQ GM: ALTR)

Stay Away

The ICAF report said that the U.S. semiconductor industry is a leader in globalized industrialization with innovators, producers, suppliers, markets, and users of semiconductors spanning the globe. Previously, the U.S. competitive advantage was in the design, construction, packaging, and selling of microchips. That is no longer completely true because the U.S. advantage does not necessarily include production and packaging. The report pointed out that in dealing with globalization, the U.S. semiconductor industry has both short and long term challenges such as basic R&D has been responsible for the remarkable scientific progress that helped to define 20th-century America. At its peak, federally supported R&D expenditures in the mid-1960s provided up to 68% of the industry's revenues. Forty years later, the government is investing in R&D at 26%-a 42% decline. Regarding defense-related investment, the government subsidizes 14% of the total expenditure, also down 42%. Even though non-federal support has increased to ensure an overall growth of about 5.8% per year these last few years, much of that growth has been in other sectors, such as the health industry. The semiconductor industry has taken up the burden for conducting R&D, but in doing so, the emphasis has shifted from basic research and defense research to mainly that of applied research and consumer product development. It is potentially a huge loss for the U.S. to turn away from the basic, or "preemptive," research that created the Global Positioning System and the Internet. A US education system strong in math and science is another challenge. Maintaining a competitive technological edge requires an education system that attracts, develops, produces, and educates skilled engineers and scientists. U.S. universities produce "barely enough" engineers, with the majority of advanced engineering degrees (42% masters and 52% doctoral) going to foreign students who now are tending to return to their own countries due to improving opportunities and lack of H-1B visas. Concurrently, universities in China produce six times the number of engineers than the US. The challenge will be to grow the U.S. engineering talent pool while also ensuring attractive job opportunities in this new globalized economy. Put more succinctly, the semiconductor industry is U.S. manufacturing's star performer. On the strength of a 17 percent annual growth rate, its output climbed from 1.5 percent of manufacturing gross domestic product to 6.5 percent. It provides the core of the $425 billion U.S. electronics industry.

Altera Corporation is the pioneer of programmable logic solutions, enabling system and semiconductor companies to rapidly and cost effectively innovate, differentiate, and win in their markets. After inventing the technology in 1983, Altera continues to be at the forefront of programmable logic innovation. Today, Altera offers FPGAs, CPLDs, and structured ASICs in combination with software tools, intellectual property, and customer support to provide high-value programmable solutions to approximately 14,000 customers worldwide. With annual revenues in 2006 of US$1.29 billion, Altera is headquartered in San Jose, California, and employs approximately 2,600 people in 19 countries. Forging the next evolution in electronic design, Altera reprogrammable solutions deliver fast time to market and an advantage over costly, high-risk ASIC development and inflexible ASSPs and digital signal processors. Altera offers value to a much broader market than was previously addressed by programmable logic products. By maintaining strong, long-standing partnerships with industry-leading technology suppliers, such as foundry partner Taiwan Semiconductor Manufacturing Company (TSMC), Altera customers are assured of quality and on-time delivery. Altera enhances its own place-and-route design software with tools from best-in-class EDA vendors. With the assistance of a world-class distribution network, Altera services customers around the world. This highly successful business model allows Altera to focus on its core competency: the development and deployment of leading-edge programmable technology that provides maximum value to customers.

John P. Daane is the Chief Executive Officer . Prior to joining Altera he spent 15 years at LSI Logic Corporation, a semiconductor manufacturer, most recently as executive vice president, communications products group. In this role, he was responsible for ASIC technology development and the computer, consumer, and communications divisions.

Misha Burich is the Senior Vice President, Research and Development. Prior to joining Altera, he served as a vice president of R&D at various electronic design automation (EDA) companies, including Cadence Design Systems, Mentor Graphics, Silicon Compiler Systems, and Silicon Design Labs, which he co-founded in 1984. Dr. Burich began his career at Bell Laboratories Research in 1978.

Lattice Semiconductor Corporation, LSI corporation Xilinx Inc. are its main competitors amongst others. Altera's revenue has seen a steady increase year on year. In 2004 it reported $1.02 billion, in 2005 it reported $1.12 billion, In 2005 it reported $1.29 billion and this year it so far earned $940.38 million and expectation are high about the revenue surpassing last year's revenue. The year on year EPS has not shown any spectacular improvement. In 2004 total EPS was $0.80, in 2005 total EPS was again $0.80 and in 2006 total EPS was $0.90, this year the EPS so far is $0.60 and expected to remain flat. Its profit margin is 25.80 %.Twelve months trailing P/E is at 20.80 and in comparison the industry is at 42.80.

If you are looking for a good long returns then I can suggest don't buy this stock. In the semiconductor business this is the one stock not performing well compare to its rivals. And also its growth relied on US growth. But for the next few years US economy will be under recession. So it's better not to go for long on this counter.

American Express Company AXP - not so fast

Wed, 28 Nov 2007 10:07:08 EST

American Express Company AXP - not so fast - by anderson

S&P500 stock - American Express Company (NYSE: AXP)

This is Consumer Finance - Wait and Watch

Personal loan to consumers is a big business totaling $40 billion in annual revenues. About 6000 companies are involved in disbursing loans in the US. These companies make money by lending unsecured cash loans. These are loans without any collateral security. Over the years income is on the rise and so is the demand for luxuries and this is the reason for the demand in consumer loans. The profitability of lending companies depends on the correct assessment of repayment and effective collections. Personal contact is very important in this business and small companies can compete better. All companies have access to cheaper sources of funds and this money is then lent at exorbitant interest rates.

Consumer finance loans are similar to that offered by banks and credit unions do, but operate in the now feared sub prime portion of the market. Sub prime borrowers are those without a good credit history or have a history of delinquent. These sects of consumers often have low income and a higher debt-to-income ratio. Automobile financing, revolving credit facility in the credit card; furniture, jewelry and appliances financing and unsecured cash loans.

American Express Company, together with its subsidiaries, operates as a payments, network, and travel company worldwide. It offers individual consumer charge cards, revolving credit cards, and co brand cards; and merchant acquisition and processing, and proprietary payments services. The company also issues travelers checks; various prepaid products, including re loadable and non reloadable prepaid cards; incentive prepaid products, such as gift checks, points-based incentive cards, and incentive funds card; and prepaid gift cards. The company, through American Express Bank, offers various investment management, trust, estate planning, and banking services; saving and investment products and various correspondent banking products such as international payments processing, trade-related payments and financing, cash management, loans, extensions of credit, and investment products, as well as distributes mutual funds and provides treasury and capital market products. The company serves consumers, small businesses, mid-market companies, and banking institutions.

Expense management services is the other segment that this company specialises in. 100,000 firms are serviced through its corporate card program, corporate purchasing solutions, electronic invoicing and payment services, and business travel services. Its travel services include travel reservation advice and booking transaction processing; travel expense management policy consultation; supplier negotiation and consultation; management information reporting, data analysis and benchmarking; and foreign exchange services.

It has its finger in the publishing industry as well. It publishes luxury lifestyle magazines; travel and business resources; general interest, cooking, wine, financial, and time management books; and international magazine editions.

Kenneth I. Chenault is the Chairman and Chief Executive Officer. He was the Chief Executive Officer in International Business Machines Corporation. He is also a Member, the World Trade Center Memorial Foundation. Trustee, NYU Hospitals Center and the New York University School of Medicine Foundation. He has distinguished himself as one of the leading Chief Executive Officers in business today, most recently through his tremendous contributions to American Express' consistent performance. He helped American Express cut costs, revamp its rewards program, spin off its brokerage unit, and become one of the top performing companies in the finance sector, noting its nearly 35 percent return on equity in 2006.

Their main competitors are Capital One Financial, Citigroup, J P Morgan Chase, U.S. Bancorp, Bank of America, Expedia, CompuCredit. Over the past several years, American Express has delivered industry-leading growth by focusing on the global payments marketplace. They have invested in innovative new products and capabilities that has helped them to gain share in a highly competitive marketplace. They have also organized their business around customer-focused groups which will position them for growth and broaden their executive leadership team.

The company has invested in the equity capital of portfolio companies that are purchased through an American Capital-sponsored buyout. They plan to acquire minority equity interests in the companies from which they have provided debt financing with the goal of enhancing their overall return. As of December 31, 2006, they had a fully-diluted weighted average ownership interest of 41% in our private finance portfolio companies with a total equity investment at fair value of over $2.8 billion

Their investments include senior and mezzanine (subordinated) debt and equity. Their ability to fund the entire capital structure is an advantage in completing many middle market transactions. Currently, they will invest up to $800 million in a single middle market transaction in North America. Their largest investment at cost as of May 25, 2007, excluding investment funds, was $417 million. Their largest investment in an investment fund at cost as of May 25, 2007, was $896 million. As of December 31, 2006, their average investment size, at fair value, was $43 million, or 0.5% of total assets.

American Express Company is selling its international banking subsidiary, American Express Bank Ltd. (AEB), to Standard Chartered PLC. The value is estimated to be $1.1 billion. The sale is subject to regulatory approvals and will be completed in the first quarter of 2008. This value is expected to be realized through dividends from the subsidiary to American Express and by a subsequent payment from Standard Chartered when the business is transferred to them 18 months after the completion of the sale of AEB.

A sound company with a very strong focus and a diversified business. Profit margin for the company is around 14%. Revenues earned so far are $29.78 billion. Earnings per share are 3.4. The growth estimates for the industry is negative but American express company is expected 17% by the time it completes the full fiscal year. Though there are concerns in this economy and companies like this one might find it difficult to grow at scorching pace. This is the same market where we are witness to great upheavals led by the banking and financial stocks. The greed to make more by lending to consumers at a higher rate with low security is not the way to go in the future. But something tells me that the appetite borrow more and consume more and more in the economy will help the sector to tide over this. Though I'm wary I will still watch out for this company, never know at some point I might be able to buy this really cheap. What do you say?

BB&T Corporation a good buy

Sun, 25 Nov 2007 14:52:16 EST

BB&T Corporation a good buy - by anderson

S&P500 stock - BB&T Corporation (NYSE:BBT)

A stable company and a good buy at current levels.

BB&T Corporation is one of the top financial holding companies in the United states. BB&T Corp. has $121.4 billion in assets and more than 1,400 offices in 11 states and Washington, D.C and is the nation's 11th largest financial holding company. Its businesses are categorised as Lending activities, Investment activities and Funding activities.

Funding Activities: Deposits are the primary source of funds for lending and investing activities. Scheduled payments, as well as prepayments, and maturities from portfolios of loans and investment securities also provide a stable source of funds. Federal Home Loan Bank (FHLB) advances, other secured borrowings, Federal funds purchased and other short-term borrowed funds, as well as longer term debt issued through the capital markets, all provide supplemental liquidity sources.

Lending Activities: It loans money to commercial, consumer, mortgage and for specialized lending activity. BB&T's loan portfolio is 50% commercial and 50% retail. BB&T lends to a diverse customer base that is substantially located within its primary market area.

Investment Activities: It invests in securities as allowed under bank regulations. These securities include obligations of the United States Treasury, United States Government agencies, United States Government-sponsored entities, bank eligible obligations of any state or political subdivision, privately issued mortgage-backed securities, structured notes, bank eligible corporate obligations, including corporate debentures, commercial paper, negotiable certificates of deposit, bankers acceptances, mutual funds and limited types of equity securities. BB&T's full-service brokerage and investment banking subsidiary, engages in the underwriting, trading and sales of equity and debt securities.

With more than $97 billion in assets, BB&T Corp. is the nation's 11th largest financial holding company. National consulting firm Forrester Research Inc. in 2003 named BB&T Corp. as the top financial services company in the nation based on "customer advocacy".

BBT&T's size gives it the strength and resources to offer a wide range of products and services, meeting practically any customer need. BB&T'S Tennessee region made corporate history in 2006 - winning the Winston-Salem, N.C.-based financial holding company's top two corporate awards in the same year. Twenty-two percent loan growth and a 19 percent increase in deposits helped the Tennessee region win the President's Award, which recognizes client service quality, profitability and growth. The Tennessee region also won the Most Improved Award - the first time any of the bank's 33 regions won both awards in the same year. In recognition of the region's accomplishments, each of BB&T Tennessee's 520 employees received bank stock. The bank also held a banquet for region employees Thursday at the Knoxville Convention Center. BB&T Tennessee benefited from a strong regional economy, which created a substantial increase in demand for banking services.Some of the Tennessee region's performance numbers were higher than the corporate-wide numbers.

Given the strength of the regional economy BB&T Tennessee will continue to grow at a scorching pace.The region has total assets of more than $2.6 billion and 71 branches in East Tennessee, the Nashville area, and parts of Virginia and Georgia. BB&T has a unique strength in this area as one of the U.S. Small Business Administration's top-ranked small business-friendly companies year after year.

Over the long haul, this company has posted results that are about average for its industry. Note that the company's net profit margins--another key profitability measure--have been average compared with other companies in its industry. Apart from core banking activities, it has a well established footprint in the Insurance and capital markets domain.

BB&T Insurance Services has partnerships with a number of insurance carriers that target the trucking industry. These partnerships allow them to strategically design an insurance program for virtually any fleet. BB&T Equipment Finance offers a full array of commercial equipment finance and lease options, specializing in commercial equipment and vehicle financing services to businesses of all sizes. BB&T Capital Markets is dedicated to delivering world-class corporate banking, investment banking, and capital markets solutions to commercial clients, corporate clients, and government entities.

John A. Allison IV is the Chairman and Chief Executive Officer of BB&T Corporation. Allison began his service with BB&T in 1971 and has managed a variety of responsibilities throughout the bank. He became President of BB&T in 1987. Mr. Allison served as Chairman and Chief Executive Officer of Branch Banking and Trust Company, Wilson, N.C. Mr. Allison served as Chairman and Chief Executive Officer ... of BB&T Financial Corporation. He has been a Director of BB&T Corporation since February 28, 1995, and serves as a Member of Executive and Trust Committee. He served as Director of BB&T Financial Corporation since 1986. He is the member of the boards of directors of The Financial Clearing House, Independent College Fund and the Global TransPark Foundation. Mr. Allison is the Member of American Bankers Association and The Financial Services Roundtable. He is the Board of Visitors of Wake Forest University Baptist Medical Center, Fuqua School of Business at Duke University and Kenan-Flagler Business School at UNC-Chapel Hill. Mr. Allison studied BS in Business Administration from University of North Carolina at Chapel Hill in 1971, MBA from Duke University, Durham, NC in 1974, graduated at Stonier Graduate School of Banking at Rutgers University, Newark, NJ in 1981, Honorary Doctor of Letters, East Carolina University, Greenville, NC in 1995, Mount Olive College, Mount Olive, NC in 2002 and Clemson University, Clemson, SC in 2005.

Christoper L.Henson is BB&T Corporation's chief financial officer. He began his banking career in 1985 when he entered BB&T's Management Development program. He has served as city executive in Wilson and Greensboro, N.C., president of BB&T's Hampton Roads Region, and president of BB&T's Atlanta Region, as well as Georgia State President.

Kelly S. King is the chief operating officer. He joined BB&T's Management Development Program in 1972. He served as manager for the Central and Metropolitan regions, Raleigh city executive, Charlotte business services manager, Statesville consumer loan department manager, Statesville marketing officer, and banking manager for BB&T's branch network from 1988 to 2004. Mr. King also serves as a member of the Board of Directors of Branch Banking and Trust Company.

GB&T Bancshares,Regions Financing Tr I, First Security Group, SunTrust Banks, Shore Bancshares, WGNB, Wachovia are its top competitors. BB&T currently has the No. 4 market share in Horry County's Myrtle Beach. The nation's 13th fastest growing metropolitan statistical area expanded by more than 35 percent over the past decade alone. Housing starts in Horry County have surged past national numbers, including a robust 65 percent increase in new residential construction permits from 2001 to 2004, the most recent figures available. Its world renowned golf, shopping and family entertainment in the coastal mecca draws 13 million visitors a year, according to the Myrtle Beach Chamber of Commerce. BB&T would continue to have the third highest market share in South Carolina and the third highest in North Carolina. BB&T acquired Main Street Banks of metropolitan Atlanta in June and First Citizens Bancorp of Cleveland, Tenn., in August

BBT's forward earnings yield of 10.42% is the annual return it would generate if its profits remained fixed and it paid out all of its earnings as dividends. This is normal compared with the earnings yields of other stocks in its industry, but it is extremely healthy in absolute terms. For this company to generate decent returns for investors, it will probably only have to realize moderate growth in earnings or a higher valuation by the market. It is, however, important to be reasonably confident about the quality of this stock's earnings. Sometimes a company in distress has a high yield because its stock price has dropped sharply. One way to verify earnings quality is to look at other valuation measures such as the price/cash flow ratio, which should not be dramatically higher than the stock's forward price/earnings ratio.

Most stocks in the super regional banks industry have seen steadily growing revenue and earnings over the past three years. BBT has also seen steady revenue growth over the past three years. Like its peers, this stock's earnings per share have grown steadily over the past three years, though they fell last year. Note that this stock's sustainable growth rate is quite a bit higher than the rate at which its earnings per share have grown. That means that the company is generating enough capital internally to finance future growth (assuming that the pace of growth doesn't pick up markedly) without raising additional capital from outside sources.

Contrary to the difficulties faced by many large banks in the third quarter, BB&T's BBT results highlight the strength of its conservative regional banking strategy. BB&T is performing in line with full-year estimates, and the company is maintaining a fair value estimate. On the PE ratio scenario its okay. One can hold this this stock for at least 5+ years to expect good returns.

Any comments?

IPO - Aegerion Pharmaceuticals, Inc

Sun, 25 Nov 2007 10:55:59 EST

IPO - Aegerion Pharmaceuticals, Inc - by anderson

Cholesterol- beware!!

Heart attacks, strokes and other cardiovascular caused 900,000 deaths in the United States. The American Heart Association classifies this problem as number one amongst men and women in the western society. Atherosclerosis is a disease wherein arteries harden due to cholesterol-containing lipoproteins in the blood vessels. If lipids and lipoproteins are present on a high level then the individual is prone to cardiovascular diseases. Cholesterol is produced in the liver. It also gets extracted from ingested foods through the intestines and then transported by the blood to various organs in lipoproteins. These are low-density lipoprotein or LDL and high-density lipoprotein, or HDL. Cholesterol carried in low-density lipoprotein particles ends up in artery walls of the heart. This lipoproien is referred to as "bad" cholesterol. 18 clinical trials on 119,000 patients confirm that LDL causes heart problems. Hence physicians always focus on lowering levels of LDL. Statins are most commonly used class of drugs to lower lipoproteins. Statins reduce cholesterol by blocking an enzyme in the liver that produces cholesterol. 30,000 patients are diagnosed with a genetic problem medically known as refractory hypercholesterolemia which always severe. This means these patients have high cholesterol levels that are resistant to currently available treatment. This is area of medical treatment that Aegerion wants to address. 52 million patients in the United States alone eligible for therapy and hence lipid-lowering therapeutics earn $30 billion every year.

Aegerion Pharmaceuticals is developing compounds to lower these tough lipids on a stand-alone basis and in combination with existing therapies. Patients who suffer from rare and serious diseases such as the genetic disorders homozygous familial hypercholesterolemia now have a reason to smile. Aegerion has named its product AEGR-733 and AEGR-427. These are microsomal triglyceride transfer protein inhibitors. which limit secretion of lipids from intestine and liver.

AEGR-733 is being developed as an oral, once-a-day treatment for patients with severe refractory hypercholesterolemia and for very high to moderately high risk of experiencing a cardiovascular event individuals. Bristol-Meyers Squibb Company developed AEGR-733, which was then known as BMS-201038, in 1990. In 2003 Bristol donated certain patent rights and other rights related to this product candidate to The Trustees of the University of Pennsylvania, or UPenn. In 2006 Aegerion entered into a patent license agreement with UPenn for the right to develop and commercialize this product candidate to treat certain specified patient populations. In October 2007, the FDA granted AEGR-733 orphan drug status for the treatment.

AEGR-427 is being developed for patients with severe hypertriglyceridemia and patients with hyperlipidemia. This again is an oral, once-a-day treatment. In addition to lowering LDL, this candidate is supposed to have a greater effect in the intestine and for lowering dietary triglycerides and causing weight loss. If this company succeeds in developing this candidate then this might be its blockbuster drug.

Pfizer Inc, Surface Logix, Inc, Japan Tobacco, Inc., Schering-Plough Corporation, Merck & Co.,Abbott Laboratories, Microbia, Inc., Sanofi-Aventis, Takeda Pharmaceutical Company Limited are Aegerion's biggest competitors. All these companies have their own version of the treatment in different stages of development.

Gerald Wisler is the President, Chief Executive Officer. He is a a co-founder of Aegerion as well. He was the President in Cardiovascular & Metabolic Brand Management at Novartis Pharmaceuticals Corporation. He also worked with Merck and Co., Inc where he encouraged the joint venture with Schering-Plough for the development and commercialization of Zetia and Vytorin.

William H. Lewis is the other co-founder and Chief Financial Officer. He worked with a hedge fund unit, Wells Fargo Securities and Robertson Stephens & Company prior to Aegerion

William J. Sasiela, Ph.D is the Chief Medical Officer. She was with Parke-Davis for a long time before joining Aegerion.

Thomas G. Burger is the Vice President, Business Development. Daiichi Pharmaceutical Corp, Sankyo Pharmaceuticals, Genta, Inc., AAI Inc. and Nikko Securities employed ho before he joined Aegerion.

The company is raising money from the market for repayment of debt and to fund the continued clinical development. At the moment it has filed a draft prospectus and hence the number of shares and pricing is yet to be announce the pricing. But i found the entire business exciting enough to provide a forewarning of the upcoming block buster company and eagerly waiting for launch of the IPO to shore up the shares. In spite of the uncertainties surrounding the company i have a gut feeling a decade long wait will be worth every penny that is invested.

IPO - Syngence Corporation

Sun, 25 Nov 2007 10:52:46 EST

IPO - Syngence Corporation - by anderson

Legal eagle-a fantastic stock for the future

The market for search and content management is huge; the thirst of such solutions is like a bottomless pit. United States litigation economy flourishes on the law suits that get filed every day. Tort firms were the trailblazers. Corporations, government are not far behind. Law firms spend $5 billion on litigation support tools and content management technology. Forrester Research, EDDix and Oracle Corporation gleefully rub their hands and say this amount will double by 2010. Forrester Research adds on the sidelines that $600 million was spent on internal compliance this year and this will gradually move north to touch $1.3 billion. The programs devoted to these kinds of search techniques is called enterprise content management. Oracle Corporation estimated that the technology which enables these kind of programs is a $3.6 billion market and growing at a rate of 13 percent each year.

Document production and discovery in litigation is the core activity for all law suits filed. Major companies have paid massive penalties because standards for the quality of data to be produced for discovery within the stipulated time was pathetic. Phillip Morris USA paid $2.75 million for non-compliance with eDiscovery requests, Morgan Stanley paid $15 million for failing to provide certain emails, and UBS AG suffered an adverse judgment for $29 million (Couldn't resist elucidating the networked minds!!). Congress amended the Federal Rules of Civil Procedure by adding new rules that reduce the time allowed for companies to produce documents for discovery. It imposed new standards for the quality and bigger penalties for non compliance.

The discovery in litigation means producing millions of pages of documents by any corporation upon being subpoenaed. The moment a company recieves the subpoena, Its lawyer needs to organise and comprehend the information contained in all documents potentially subject to the subpoena. This is very critical and any inadequate search can be catastrophic.

Search to me has always been synonymous to Google, Yahoo and MSN. So i wondered what value does Syngence add to the overcrowded search engine technology? Then it dawned on me that the Internet search delivers results ranked on popularity and not necessarily by relevance to the search terms. Litigation and enterprise applications need to ensure that no relevant documents be missed. Syngence provides solutions to address this with its product labelled Synthetix linguistic pattern matching technology. Users can search with plain language sentences or expressions without complex logic operators. The algorithm allows the users to select lengthy passages as search expressions, delivers results from millions of pages, retrieves results without additional storage and computing power, does not require repetition of multiple variations of a query, omits extraneous information without hampering the relevance of the search and checks for duplicated documents.

All its customers are law firms, corporate legal departments and governmental agencies. They are provided with processing services and are billed according to the volume of data. Data is first processed and then Syngence's interface analyzes and searches the the full text content based on the search criteria. Syngence also licenses its solutions to Encore Legal Solutions and Pitney Bowes who provide litigation support services to law firms on a national level.

Randall D. Miles, 51, is the President, Chief Executive Officer and Director. He was with LION Inc. as its chairman and chief executive officer for four years. Davidson & Co benefited by his work prior to this.

Chris V. Johnson, 45, is the Vice-President and Chief Financial Officer. He is a certified public accountant and worked with LION, Inc. and Bluejack Systems LLC before joining Syngence.

Edward Horton, 48, is the Executive Vice President-Sales. LAWTRAC Development Corporation held his fancy before he quit to join Syngence.

Douglas J. Matzke, 52, is the Chief Technology Officer. He was the Senior Research Scientist for Lawrence Technologies LLC before his current role.

Attenex Corp., Equivio, Ltd., Engenium Search from Kroll Ontrack, Inc., and Stratify, Inc. are Syngence's biggest competitors. These companies use Boolean search, content search and concept search and clustering technologies. But Syndence's technology is superior in terms of reliability and accuracy.

Syngence is planning to 2,000,000 and has not yet decided on the price. But it plans to price it below $6. The company needs the money it raises to clear certain outstanding debt and for capital expenditures. I say keep an eye on the developments of this IPO, this is a red hot stock with a red hot business. The use of its patented search technology is vast. This company has the potential to be a disruptor in the existing search and related markets.

Any alternative view on this one?

Autozone, Inc. - A stock to buy

Thu, 22 Nov 2007 16:51:40 EST

Autozone, Inc. - A stock to buy - by anderson

S&P 500 stock - Autozone, Inc. (NYSE: AZO)

A stock to buy

4,000 stores in the US, Puerto Rico and Mexico, that's AutoZone's spread and reach to get a well deserved label as the nation's leading retailer and a leading distributor of automotive replacement parts and accessories. AutoZone stores sell hard parts maintenance items, accessories and other merchandise under brand names and private labels. It also gives tools on loan. There are strong reasons for me to look at buying this stock now.

Auto parts industry is part of the Retail Trade sector in the US. New and used automotive parts for automobiles and trucks comprise this industry. This industry does not retail tires, retail automotive parts via electronic home shopping, mail-order or direct sale or provide automotive repair services. This industry comprises of establishments known as auto supply stores primarily engaged in retailing new, used, and/or rebuilt automotive parts and accessories, automotive supply stores that are primarily engaged in both retailing automotive parts and accessories and repairing automobiles and establishments primarily engaged in retailing and installing automotive accessories.The industry is divided between wholesalers, retailers and used part retailer.The wholesale and retail auto parts industry includes approximately 45,000 companies with combined annual revenue of $135 billion. 50 largest wholesalers hold over 50 percent of the wholesale segment. The retail segment is a bit less concentrated, with the top 50 companies holding about 40 percent of the segment. The used parts segment is highly fragmented.

AutoZone,Genuine Parts, Advance Auto Parts, CSK Auto, and Pep Boys, are the top companies all with annual sales over $1 billion. These firms operate both wholesale distribution centers and retail stores. All these companies sell parts and other products used to maintain and repair cars and trucks in the so-called auto aftermarket. Products are sold both to consumers who work on their own cars, the do-it-yourselfers (DIY); and to commercial installers like auto repair shops, gas stations, fleet operators, and car dealer service.

Autozone sells Hard parts which include A/C compressors; alternators; batteries and accessories; brake drums, rotors, shoes, and pads; carburetors; clutches; CV axles; engines; fuel pumps; mufflers; shock absorbers and struts; starters; and water pumps.

Maintenance items include antifreeze and windshield washer fluid; belts and hoses; chemicals, including brake and power steering fluid, oil, and fuel additives; fuses; lighting; oil and transmission fluids; oil, air, fuel, and transmission filters; oxygen sensors; protectants and cleaners; refrigerant and accessories; sealants and adhesives; spark plugs and wires; wash and wax; and windshield wipers.

AutoZone's accessories and non-automotive product comprises air fresheners, cell phone accessories, drinks and snacks, floor mats, hand cleaners, neon lighting, mirrors, paint and accessories, performance products, seat covers, steering wheel covers, stereos, and tools.

The company also offers commercial sales program that provides commercial credit, and delivery of parts and other products to local, regional, and national repair garages, dealers, and service stations. In addition, it sells the ALLDATA brand automotive diagnostic and repair software, as well as diagnostic and repair information, auto and light truck parts, and accessories on the Web at autozone.com.

Commercial sales program distributes automotive parts and other products to local, regional and national repair garages, dealers and service stations in the United States. Autozone offers credit and delivery to commercial customers. The program operated out of 2,182 stores. Professional technicians are offered a greater range of parts and products and this additional inventory is available for DIY customers as well. AutoZone has a national sales team takes care of national and regional commercial customers.

Valucraft and Duralast are its other leading brands. Loan-A-Tool program allows customers to borrow a specialty tool, such as a steering wheel puller, for which a DIY customer or a repair shop would have little or no use other than for a single job. Customers are also provide other free services, including check engine light readings; battery charging; oil recycling; and testing of starters, alternators, batteries, sensors and actuators.

The company is efficiently managed by William C. Rhodes III. He is the Chairman of the Board, President, Chief Executive Officer. He started his career with Ernst & Young before joining Autozone in 1994. From there on he worked in different capacities before taking charge in the current role.

William T. Giles is the Chief Financial Officer and Executive Vice President, Finance, Information Technology and Store Development. He was an accountant PricewaterhouseCoopers and later worked with Linens ‘n Things for 15 years before joining Autozone.

James A. Shea is the Executive Vice President-Merchandising, Marketing and Supply Chain. His Curriculum Vitae includes a stint with Lechter's Housewares as the president and was also the President and Co-founder of Drop Shop Store .

Top competitors for the company are Advance Auto Parts, Inc, Genuine Parts Company, The Pep Boys - Manny, Moe & Jack, O'Reilly Automotive, Inc., CSK Auto Corporation. Additionally independently owned parts stores, wholesalers and jobbers, repair shops, car washes and auto dealers, in addition to discount and mass merchandise stores, department stores, hardware stores, supermarkets, drugstores, convenience stores and home stores that sell aftermarket vehicle parts and supplies, chemicals, accessories, tools and maintenance parts also compete with AutoZone.

Demand for AutoZone's parts is driven by the age and mileage of vehicles, generally increasing when fewer new cars are sold. The profitability of company depends largely on inventory management and marketing. Small companies can compete effectively by carrying specialized parts or providing extra services such as machining or fast delivery.

AutoZone Inc. reported earnings $595.7 million, or $8.53 per share. Revenue rose 4%b to $6.17 billion. In a recent research note analysts mention that the company's share price has declined by almost 15% in November due to the subprime mortgage crisis, concerns regarding the impact of increased gasoline prices and general market weakness. Analyst believes that AutoZone has the opportunity to buyback shares following this recent decline. The EPS estimate for FY08 has been raised from $1.90 to $1.91, to reflect the company's steady sales and operating margins and robust cash flow generation. This stock will be worth a try.

Assurant, Inc Review

Thu, 22 Nov 2007 16:50:12 EST

Assurant, Inc Review - by anderson

S&P 500 stock - Assurant, Inc (NYSE: AIZ)

Will wait for the SEC investigations reports

Assurant Solutions, Assurant Health, Assurant Employee Benefits and Assurant PreNeed form the core activities of Assurant,Inc. Its services are available in the U.S. and selected international markets. Assurant has $25 billion in assets and $7 billion in annual revenue and is a part of S&P 500 index.

The value of the life insurance market is shown in terms of gross premium incomes from mortality protection and retirement savings plans. The insurance market depends on a variety of economic and non-economic factors and hence future performance is difficult to predict. The U.S. life insurance industry comprises more than 1,200 active companies. Annual premiums for life insurance and annuity products amount to about 5 percent of GNP and total assets to 26 percent of GNP. Life insurance companies buy all kinds of bonds, mortgage loans and mortgage-backed securities, and corporate equities and are regarded as major participants in U.S. capital markets. Insurance regulation is fragmented among state authorities, but coordinated through the National Association of Insurance Commissioners. Regulation emphasizes prudence and solvency. There are no minimum requirements for investing in government bonds or"high-priority"sectors, but tight maximum limits are often imposed on different assets, especially holdings of corporate equities, and on agents'commissions.

Assurant, Inc. took birth on February 5, 2004 and with its first trade on the New York Stock Exchange. The Company provides creditor-placed homeowners insurance, manufactured housing homeowners insurance, debt protection administration, credit insurance, warranties and extended service contracts, individual health and small employer group health insurance, group dental insurance, group disability insurance, group life insurance and pre-funded funeral insurance. Assurant Solutions; Assurant Health; Assurant Employee Benefits; and Assurant PreNeed are the four operating segments. Assurant provides insurance to Corporate and Other segments.

Assurant Solutions is divided into two divisions: Specialty Property and Consumer Protection.

The Specialty Property division focuses on creditor placed homeowners and manufactured housing homeowners insurance products and related services, as well as other insurance related products such as renters' insurance, watercraft and motorcycle property coverages.

In its Consumer Protection division, the Company is a low-cost provider of credit and debt protection administration services. In addition, Assurant offers a variety of warranties and extended service contracts on consumer electronics, cellular phones, personal computers, appliances and vehicles through clients domestically and internationally.

Assurant Health is a writer of individual and short-term major medical health insurance. The Company also provides small employer group health insurance to employer groups of two to fifty employees in size, and health insurance plans to full-time college students.

Assurant Employee Benefits Segment markets employer-sponsored group life, disability and dental insurance and managed care products, to small-to-medium size employer groups with 500 or fewer employees.

Assurant PreNeed is in pre-funded funeral insurance and this insurance solutions has wide acceptance in Canada. This is sold mainly to consumers over the age of 65, with an average issue age of 73 and are distributed through funeral homes. This funeral insurance became part of its portfolio with its acquisiton of AMLIC in 2000 after which Assurant became sole provider of pre-funded funeral insurance.In the US funeral insurance products are sold through two separate channels, its Independent-Canada channel and its AMLIC channel. The Company's pre-funded funeral insurance products provide benefits to cover the costs incurred in connection with pre-arranged funeral contracts

J. Kerry Clayton is currently serving as Interim President and Chief Executive Officer. He has been part of Assurant for a long time as all the previous companies he worked for has been acquired by Assurant.

Michael J. Peninger Executive Vice President; Interim Chief Financial Officer. He started as an actuary in Northwestern National Life and joined Assurant Employee Benefits in 1985.

Both these individuals have spent more than a decade with the company in various capacities and are well poised to handle the business of Assurant. Incidentally the CEO Robert B. Pollock and CFO Philip Bruce Camacho are on administrative leave pending SEC investigations.

CIGNA, Markel, Mutual of Omaha are the top compititors. Compititon is in vogue in each of the businesses but no single competitor competes all of the business lines. Pricing, product features and their distribution strength sets them apart from all competitors. Their market share for Assurant's business is close to two-thirds.

Assurant Inc. reported increased earnings by 24 percent to $187.2 million for the third quarter. Total revenues increased to $2,148.2 million against total revenues of $1,984.1 million for the same period a year ago. For the nine months ended September 30, 2007, the company reported net income was $532.9 million, an increase of 15%. Assurant announced that it has ended the company's current stock buyback program and does not expect to initiate a new program in 2007. In light of its continuing involvement with the SEC Staff's investigation into certain loss mitigation products, Assurant determined that it is prudent to extend the normal quarterly blackout period for company stock transactions, which restricts the company's ability to initiate a new stock repurchase program. Going forward, the company will evaluate any further extension of the company's normal blackout period and the potential to implement a new buyback program. The company experienced significant losses due to the subprime problem as a lot of money was invested to bonds dealing with home loans.

I will wait until the SEC finishes its investigation (and in all likelihood fines AIZ), then buy the stock at a cheaper price it's a cash cow of a company.

Ashland Inc.- A Long Term Buy

Thu, 22 Nov 2007 11:36:19 EST

Ashland Inc.- A Long Term Buy - by anderson

S&P500 Stock - Ashland Inc. (NYSE: ASH)

A Buy for Long term

Ashland Inc is a diversified chemical company that provides quality products, services and solutions to customers around the globe. It operates through four wholly-owned divisions: Distribution, Performance Materials, Valvoline, and Water Technologies. It also provides boiler and cooling water treatments, fuel treatments, welding, refrigeration and sealing products and fire, safety and rescue products for the merchant marine industry.

James J. O'Brien is the chairman and and Chief Executive Officer. His experience in the company spawns 30 years from chemicals to motor oil marketing. J. Marvin Quin is the Sr. Vice President and Chief Financial Officer. He has been with Ashland since 1972 in various capacities. Both incidentally are veterans in Ashland and understand how the company functions and what needs to be done for its growth.

The chemical industry world over always enjoys a love-hate relationship with the society . Driven by many objectives as well as balancing social concerns with profit and R&D investments, the industry often finds itself straddled with key questions bordering on growth and ensuring sustenance in collaboration with the community. The US Chemical Industry is the world's largest producer by a substantial margin with a balance of trade surplus in excess of $15 billion. It is a major player contributing 21% in GDP to the US economy. This growth has led many theorists to conclude that the industry is a "harvester" rather than an "investor" for future growth. The strength of this industry lies in its contribution to the employment scenario wherein it supplants millions of households in its production as well as indirectly in the R&D sector. The industry has implemented measures to attain energy efficiency and has completed major strides in improving the environment.

Distribution: Distributes chemicals, plastics, composite materials and environmental services in North America and thermoplastics in Europe. Performance Materials: Manufactures and supplies specialty chemicals and customized services to the building and construction, packaging and converting, transportation, marine and metal casting industries.

Valvoline: Producer, distributor and marketer of branded automotive and industrial products and services.

Water Technologies: Supplies chemical and non-chemical water treatment solutions for industrial, municipal and commercial facilities. It also provides boiler and cooling water treatments, fuel treatments, welding, refrigeration and sealing products and fire, safety and rescue products for the merchant marine industry.

Revenue distribution is as shown in the picture. Ashland distribution accounts for 52 percent of the revenues. Valvovine rakes in 20 percent. Performance material contributes 18 percent and water technologies accounts for the remaining 10 percent.

The common stock of Ashland has climbed 21.08% in the past 52-weeks, as investors anticipate that the recent sale of the pavement and construction business represents an important strategic step in transforming the Company into a diversified chemical company, better positioned to benefit from continued global economic growth, especially in Europe and China. The company is in good financial health, with about $33.75 per share in cash and a Total-Debt/Equity ratio of only 2.6 percent. The rise in the price of Ashland's stock already reflects an optimistic scenario.

5 year outlook for the company is fundamentally good as its worldwide operations will bring in more revenues with increased sales and new customer acquisition.

MERRION PHARMACEUTICALS - Risky

Tue, 20 Nov 2007 12:46:54 EST

MERRION PHARMACEUTICALS - Risky - by anderson

Potential Disruptor - Risky but I'll take it

Before even thinking of investing, what drew me to Merrion is its intention. The intention to do away with complicated drug dosing like injections and make it simple by delivering oral drugs. Yes, Merrion is a Pharmaceutical firm that makes patentable oral drugs, independently as well as in collaboration with other companies. With Operations in North Carolina and Ireland, Merrion has 35 Issued and in-process US patents for the delivery of a variety of drugs and biologics.

Established in 2004, Merrion has till date developed GIPET & GIRES, path breaking drug delivery platforms (or do we say technologies) to be used in its various products. GIPET (Gastrointestinal Permeation Enhancement Technology) improves the absorption of drugs into the blood stream while GIRES (Gastrointestinal Retention System) helps the stomach to retain drugs. These still await FDA clearance. Therefore, none of the products that employ these platforms have got any regulatory approvals so far resulting in no revenues for Merrion. However, another way of looking at it is that Merrion is in an early stage of development and technologies that can be potential disruptors. Since inception Merrion has incurred operational losses year on year and as of June 30, 2007 the accumulated losses were to the tune of $21.6 (Declared by the company)

Merrion is developing four products simultaneously on GIPET.

MER 101 is an oral bisphosphonate for oncology indications.

MER 104 is being developed for the treatment of prostate cancer but this in clinical testing stage.

MER 103 is for osteoporosis and MER 102 is an oral anticoagulant.Merrion will license these two products to collaborators for advanced clinical development and marketing

Poor absorption of new drug candidates can present a significant obstacle in the successful development of a drug. This limitation has resulted in many new molecules and novel biotechnology products either being rejected as viable drug candidates or formulated for administration by injection due to their poor absorption in the Gastro Intestinal tract. In numerous preclinical and clinical studies, GIPET has demonstrated the ability to increase the absorption of drugs, potentially allowing for oral forms of poorly absorbed drugs that might otherwise require delivery by injection. In addition, drugs which are absorbed primarily in the stomach or the upper part of the small intestine may require formulations and/or technologies that facilitate retention in the stomach for a sustained release over a long period of time. GIRES is a novel sustained release technology designed to extend the period of time a drug is retained in the stomach, which should improve bioavailability and pharmacokinetics. No products incorporating GIPET or GIRES technology have received regulatory approval to date. As a result, the claims regarding their effectiveness have not been accepted by the FDA.

GIPET and GIRES offer significant potential advantages in the regulatory approval process because they can work with already approved drugs, permitting the use of existing product data in a new drug application. The application of Merrion's technologies to existing products could result in new patents on these improved products, which would provide market exclusivity for up to twenty years from the date of patent application.Patients are the primary beneficiaries of all drug companies. It is well recognized that improved patient convenience leads to improved patient compliance. A Harris Interactive online survey conducted in 2005 showed that one in three adults who are prescribed drugs on a regular basis say they are often non compliant with their treatment regimens. The application of technologies improves existing medications by reducing the amount of oral drug needed or the frequency of dosing, improving drug tolerability, reducing side effects and reducing the costs of drug administration when compared to injectable drugs.

"We seek to develop pharmaceutical products both independently and in collaboration with established pharmaceutical companies. Our goal is to develop a portfolio of products that can be marketed by an internal specialty sales force to targeted physician groups, and through collaborators for broader markets. Additionally, we have research agreements with Gloucester Pharmaceuticals, Inc., Hunter-Fleming Limited, Novo Nordisk, and sanofi-aventis Deutschland GmbH to explore the potential for the application of our technologies to certain of their products in therapeutic areas which include oncology, diabetes and neurogenerative diseases, and are seeking additional opportunities to leverage our technologies. While we do not expect the revenues from these or future research agreements to be material to our business, we anticipate that some of these relationships may progress to development or licensing agreements that will generate revenue from development, licensing, milestone and/or royalty fees." States the company.

The company acquired core intellectual property from Elan Corporation, plc in 2004 for an upfront fee of $2.5 million and a 10 percent royalty on the revenues earned.The acquired intellectual property included 21 United States patents and patent applications owned by Elan and an additional 14 patents and patent applications sub-licensed by Elan. Merrion also acquired multiple foreign filings associated with these patents. It further expanded the patent portfolio with five additional patent applications based on their own research and development efforts.

The company wants to use the money it raises from the IPO to fund clinical development, preclinical testing and other research and development activities for future product candidates. Drug discovery and development in the pharmaceutical industry is characterized by significant risks and uncertainties inherent in the research, clinical development and regulatory approval process. But the company intends to license, acquire, invest in complementary businesses, products and technologies provided this does not hamper its in house product development. The money raised will be sufficient to fund operations for 21 months from the date of IPO. After this Merrion expects to generate revenues from development, license agreements. But on a cautious note, the company prefers not to commit itself to the time lines. Now if the company fails to this then future funds for operations will be raised through debt.

The biotechnology and pharmaceutical industries are characterized by rapidly advancing technologies, intense competition and a strong emphasis on proprietary products. Competition comes from many different sources, including commercial pharmaceutical and biotechnology enterprises, academic institutions, government agencies and private and public research institutions.
GIPET, which is designed to improve the delivery of poorly permeable compounds to the bloodstream after oral administration, is based on the application of penetration enhancing technologies that improve the absorption of such drugs in the GI tract. Although there are only a handful of companies developing directly competing technologies, there are several companies pursuing technologies which address this issue, such as BioDelivery Systems International, Emisphere Technologies, Inc., Eurand, pSivida and Xenoport.But GIPET technology is sufficiently differentiated from these alternative technologies and approaches.

GIRES, which is designed to prolong the gastric residence time of a drug, is based on a proprietary system consisting of a controlled-release dosage form inside an inflatable semi-permeable pouch, which is placed in a hard gelatin capsule for oral administration. While there is no direct competition for GIRES technology, there are a number of similar drug delivery techniques that have been employed previously, such as those from Depomed, Inc., Flamel, Scolr, Spherics and Intec Pharma. GIRES technology is differentiated from these competitors by virtue of its longer duration of action and independence from food effects.

There are no competing oral drugs to MER 101 for the treatment of bone metastases. Currently, the market is dominated by Zometa, the leading intravenous product. Generic pamidronate and Bondronat marketed by Roche, which is not available in the United States, also have a small share of the market for the treatment of bone metastases. Technically there are no drugs in development that would compete directly with MER 101. MER 103 will compete with oral bisphosphonates in the treatment and prevention of osteoporosis. Oral bisphosphonates, such as Fosamax, Actonel (Procter & Gamble and sanofi-aventis) and Boniva (Roche and GlaxoSmithKline), are currently the leading drugs in the treatment and prevention of osteoporosis. However, all currently marketed oral bisphosphonates require a complex and inconvenient regimen surrounding their administration. Recent Phase II results have demonstrated that MER 103 eliminates this dosing regimen.

MER 104 is intended to replace leuprolide, a GnRH agonist used in the treatment of prostate cancer. There are several other new GnRH antagonists in development by pharmaceutical companies in North America and Europe. Tevarelix being developed by Ardana and ozarelix being developed by Spectrum Pharmaceuticals are in Phase II clinical development for benign prostatic hypertrophy and prostate cancer. Both products are administered by subcutaneous injection. There is only one non-peptide GnRH antagonist, under development by Neurocrine Biosciences, that competes with MER 104 as an oral medication. This compound, NBI-56418, is in Phase II for endometriosis.

MER 102 is an oral version of the injectable Factor Xa antagonist fondaparinux, marketed by GlaxoSmithKline as Arixtra. The patent for this product has expired. Market exclusivity for the original indication in the United States ended in December, 2006. Rivaroxaban is an oral Factor Xa antagonist in Phase III clinical trials, jointly developed by Bayer and Ortho-McNeil.

There are also a number of companies working to develop new drugs and other therapies for these diseases that are undergoing clinical trials. Merrion also faces competition from existing drugs of third parties and drugs that are under development by third parties as to any products that successfully develop from existing or future research programs. Finally, other drug delivery methods such as transdermal or inhalation therapies may be developed that target drugs or indications our products address. The key competitive factors affecting the success of all of the drug candidates are likely to be their efficacy, safety profile, price and convenience. Competition is in the form of giants who have significant access to financial resources and talent through research and development, manufacturing, preclinical testing, clinical trials, regulatory approvals and marketing reach. Nimble companies from different countries trying get a break in the US markets also pose a long term threat. Similarly if competitors develop low cost products which are commercialised and claim t be more safer, more effective, and less expensive, then Merrion's revenues might get hit.Third parties compete in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies and technology licenses complementary or advantageous to the business.

Merrion's collaborators are largely responsible for commercialization of these products. These same collaborators might be conducting multiple product development efforts within the same disease areas that are the subjects of their agreements with Merrion. Any of the drug candidates therefore may be subject to competition with a drug candidate under development by a collaborator.

All in all the company has embarked on an exciting phase of business in the pharmaceutical industry. Speedy approvals will bring a lot of relief to patients who at the moment suffer because of no tolerance and any day oral drugs are better any day when compared to injectible drugs. But a conservative view shows a bleak future for the company in a 10 year horizon because firstly Merrion is heavily dependant on its collaborators and secondly FDA approvals take a long time. Though the technology it is developing is needed in the market, it does not have exclusivity and there are no block busters in the pipeline.

Careful about El Paso Pipeline Partners

Mon, 19 Nov 2007 13:39:52 EST

Careful about El Paso Pipeline Partners - by anderson

El Paso Pipeline Partners

The name El Paso sounds more like a Mexican delicacy, in reality its a Delaware limited partnership formed by El Paso Corporation, more of a subsidiary. It owns and operates natural gas transportation pipelines, storage and other midstream assets. Wyoming Interstate Company, Ltd., or WIC, a wholly-owned interstate pipeline transportation business primarily located in Wyoming and Colorado and 10% general partner interests in two interstate pipeline transportation businesses: Colorado Interstate Gas Company, or CIG, which is located in the U.S. Rocky Mountains, and Southern Natural Gas Company, or SNG, which is located in the southeastern United States form its assets. 12,300 miles of pipeline and associated storage facilities form the interstate pipeline businesses. It owns underground working natural gas storage capacity is 89 Bcf. El Paso is the largest operator of interstate natural gas pipelines in North America. As of June 30, 2007, El Paso owned 43,000 miles of interstate pipeline and 233 Bcf of working natural gas storage capacity that connect many of the major domestic natural gas producing basins to the major domestic consuming markets. BCF is abbreviation for billion cubic feet. This is how quantity of gas is measured. El Paso Pipeline Partners' customers include local distribution companies, industrial users, electricity generators, and natural gas marketing and trading companies. El Paso Corporation will retain about 70% of the company post-IPO.

Gas pipeline is a tricky business to be in. If money is spent to build pipeline first and then wait for the gas to be transported, it will turn out be a losing proposition. But El Paso Pipeline Partners has an answer to this through the 3 major assets it has.

1. For WIC, Gas comes from Piceance, Uinta, Powder River and Green River Basins to the Cheyenne Hub. WIC will deliver this natural gas to downstream market areas through interconnections with other pipeline systems. Full recovery of cost of project is estimated.

2. CIG owns and operates 4000 miles of pipeline. Gas is delivered from U.S. Rocky Mountains and the Anadarko Basin. It delivers gas directly to utilities serving residential and commercial users along the Front Range market of Colorado, which includes Denver, and Wyoming and indirectly to users through multiple interconnections. El Paso Pipeline Partners owns 10% of this company.

3. SNG consists of 7,600 miles of pipeline. Gas comes from basins in Texas, Louisiana, Mississippi, Alabama and the Gulf of Mexico to market areas in Louisiana, Mississippi, Alabama, Florida, Georgia, South Carolina and Tennessee, including the metropolitan areas of Atlanta and Birmingham. The SNG system is also connected to El Paso's Elba Island LNG terminal near Savannah, Georgia, which supplies approximately 17% of the natural gas transported on the SNG system.

The other factors influencing the trickiness of the business are listed below.

1. If Bin Laden's Talibs set fire to the pipelines in an act of terrorism then the damage caused is immeasurable. Talib in afghan means student and Taliban is plural.

2. Hurricanes, tornadoes, floods, fires

3. Pipeline blockages

4. Leakage of natural gas

5. Operator error

6. Risks related to underwater pipelines in the Gulf of Mexico, which are susceptible to damage from shifting as a result of water currents and mudslides as well as damage from vessels

7. Changes in natural gas prices.

and the list goes on. But the money that this business generates is mouthwatering mitigating the risks to a certain extent.

El Paso Pipeline Partners proposes to sell 25,000,000 of its common stock with a price band in the range of $19- $21. It hopes to raise an estimated amount of $500,000,000. Major part of the money raised will be used to reimburse the El Paso Corporation's investment before the listing. For the time being the company is headed in the right direction and in the foreseeable future will make lots of money for all its shareholders unless as newton says, some external factor stops it. El Paso Corporation will always have its friendly hand around the company's shoulder. So investors need not think twice to remain invested in the company for decades to come.