Friday, January 31, 2014

Mid-Afternoon Market Update: Markets Turn Back as Momentum Stocks Drop

Toward the end of trading Monday, the Dow traded down 0.02 percent to 16,061.22 while the NASDAQ gained 0.01 percent to 3,991.52. The S&P also fell, dropping 0.19 percent to 1,801.77.

Top Headline
Wal-Mart Stores (NYSE: WMT) announced the retirement of its president and chief executive Mike Duke.

Wal-Mart appointed Doug McMillon, head of international operations, as its new president and CEO, effective February 1.

Equities Trading UP
Giant Interactive Group (NYSE: GA) shot up 12.29 percent to $11.36 after the company received a non-binding proposal to acquire the company for $11.75 per share.

Shares of Orexigen Therapeutics (NASDAQ: OREX) got a boost, shooting up 8.63 percent to $6.17 after the company announced successful results of the interim analysis of the Light Study.

8x8 (NASDAQ: EGHT) was also up, gaining 6.59 percent to $10.11 after Bank of America initiated coverage on the stock with a Buy rating and a $13.00 price target.

Equities Trading DOWN
Shares of The ADT (NYSE: ADT) were down 5.93 percent to $41.41 after the company announced the repurchase of 10.24 million shares held by Corvex at $44.01 per share.

Celldex Therapeutics (NASDAQ: CLDX) shares tumbled 9.36 percent to $25.66 after the company reported positive Phase 2 rindopepimut data in patients with recurrent glioblastoma.

Yelp (NASDAQ: YELP) was also down, falling 6.64 percent to $58.24 as the market sold off a wide array of momentum stocks on Monday's session.

Commodities
In commodity news, oil traded down 0.71 percent to $94.17, while gold traded up 0.43 percent to $1,249.60.

Silver traded up 0.90 percent Monday to $20.062, while copper rose 0.48 percent to $3.23.

Eurozone
European shares were mostly higher today. The Spanish Ibex Index rose 0.06 percent, while Italy's FTSE MIB Index declined 0.34 percent. Meanwhile, the German DAX surged 0.89 percent and the French CAC 40 jumped 0.55 percent while U.K. shares rose 0.34 percent.

Economics
The pending home sales index declined 0.6% to 102.1 in October.

The Dallas Fed general business activity index fell to 1.90 in November, versus a prior reading of 3.60. However, economists were expecting a reading of 5.00.

The Treasury is set to auction 2-year notes.

Posted-In: Earnings News Guidance Eurozone Commodities Forex Global Econ #s Economics Hot Intraday Update Markets Movers Tech

(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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Thursday, January 30, 2014

Boeing’s 2014 Outlook Disappoints; Shares Fall Almost 6%

Boeing (BA) couldn't have wished for a better 2013. Its outlook for 2014, however, has disappointed investors.

Early Wednesday, the aerospace giant easily beat fourth-quarter forecasted earnings growth amid continued strong demand for its jet liners, but tempered its forecast for 2014, despite another planed record year for commercial aircraft productions.

Investors did not react well, sending Boeing falling 5.8% to $129.

Boeing delivered a record 648 commercial aircraft in 2013 and expects to beat that in 2014 with 715 to 725 deliveries, driven by increasing production of single-aisle 737s and long-range 787 Dreamliners. But year-end defense orders were down to $70 billion from $71 billion a year earlier, with a dip expected in profit margins in 2014.

Boeing’s sees earnings per share of $7 to $7.20 in 2014, which misses the $7.57 expected by analysts surveyed by Thomson Reuters. Revenue is forecast to climb to $87.5 billion to $90.5 billion in 2014. But that too missed expectations of $92.72 billion.

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Analysts cautioned Boeing’s initial forecasts tend to be more conservative at the beginning of the year. Sterne Agee analyst Peter Arment suggested buying the shares. He wrote:

We view BA’s 2014 EPS/cash-flow guidance to be initially conservative given the year is just commencing and coupled with BA’s typical cadence of increasing mileposts as the year progresses. Investors should continue to add to BA at current level.

Boeing's stock gained 84% in 2013 beating the average Aerospace & Defense company by more than 20 percentage points, thanks to a huge rush of orders from emerging economies, a dividend hike and other catalysts that also helped boost Airbus (EADSY). The stock was named a top pick by Citigroup's Jason Gursky.

Monday, January 27, 2014

Netflix: The Rally That Just Keeps on Going

The rally in Netflix Inc.(NFLX) shares continues to prove the naysayers wrong.

Shares are up a whopping 246% this year, tops in the S&P 500. Strong subscriber growth and an effort to pump more money into original programming, such as “House of Cards” and “Orange Is the New Black,” has been well received by both consumers and investors.

And for one prominent shareholder — billionaire investor Carl Icahn — the gains keep streaming in.

Mr. Icahn purchased more than 5.5 million shares last year at a price of around $58 a share. With shares up more than 4% to $322.50 on Tuesday, another record high, his position is now worth around $1.77 billion.

In an interview on CNBC on Tuesday afternoon, Mr. Icahn said he has yet to sell a single Netflix share amid the huge rally, although he offered a hint of caution about the stock’s future.

“It’s not the no-brainer that it was when we first bought it,” he said.

It doesn’t take a complicated quant model to agree with that assessment. Check the chart below, which offers a look at Netflix’s monster rally over the past year.

FactSet

By conventional metrics, Netflix’s stock looks extremely expensive, with a ratio of price-to-estimated earnings over the next 12 months of 206, according to FactSet. By comparison, the S&P 500 has a forward P/E of 14.3.

Investors are valuing the company based on its growth potential and don’t seem concerned the company isn’t generating huge profits.

And yet, the rally continues to defy logic.

MKM Partners analyst Rob Sanderson boosted his price target on Netflix to $370 from $285 on Tuesday. “We think investors have growing confidence in the size of opportunity, strength of position and that management knows what they’re doing,” Mr. Sanderson says.

The worry with Netflix, of course, is how quickly Wall Street turned against Netflix once before. Shares previously traded above $300 in the summer of 2011. As the five-year chart below shows, the company’s ill-fated decision two years ago to raise prices and separate  its movie-streaming business and its DVD-by-mail service prompted the stock to fall to the low $50s in September 2012.

FactSet

“We do not see a price increase anytime soon. We think management will keep price low to drive mass penetration before looking to pricing power/pricing tiers,” Mr Sanderson says.

To all MoneyBeat readers, how much further can Netflix shares rally? Is this stock going to $400? Do we hear $500? Or is this rally setting up for a sharp tumble? Drop your thoughts in the comments section below and let us know what you think!

Unable to display this media on your device.

Sunday, January 26, 2014

The Deal: Jones Group, or Buyers, May Entertain Sale of Its Parts

NEW YORK (The Deal) -- If it doesn't get attractive offers to sell the whole company, apparel maker Jones Group Inc. (JNY) will likely still choose to sell off parts of the company, according to industry sources.

The New York-based apparel company is working with financial adviser Citigroup Inc. on a strategic review. Though the company would prefer a straightforward sale, the parts may be worth somewhat more than the whole, sources said.

Sycamore Partners and Kohlberg Kravis Roberts (KKR) were reported by The Wall Street Journal to be considering teaming up to make a bid for Jones.

But were they to enter a bid, the private equity firms could also be considering what they might jettison down the road at Jones to help shore up the company's troubled operations. And those parts had better have a lot of value as separate entities, since Jones is already trading at a valuation that is a high multiple of EBITDA. Jones' EBITDA was $230 for 2012, with EBITDA for 2013 estimated to come in at nearly $260 million, according to Bloomberg data. Total debt of $950 million as of July 6, added to a current market cap of $1.12 billion, equates to an enterprise value of nearly $2.1 billion. That's a valuation multiple of about 9.1 times trailing EBITDA and about 8.1 times forward EBITDA. It is, however, 10.5 times EBITDA of nearly $200 million generated for the last 12 months as of July 6. Even a slight premium to its current valuation would make it one of the more expensive deals in the sector this year. Granted, multiples for mature retailers have reached into the double-digits, as in the case of Saks (SKS), which Hudson's Bay Co. bought in July for $2.9 billion. Saks was rewarded with a multiple of 11.2 times forward EBITDA and 10.7 times trailing EBITDA, but the luxury department store retailer is sitting on about $1.5 billion in real estate. Leonard Green & Partners and TPG Capital's 2010 $2.86 billion deal for J.Crew Group valued that retailer at 10 to 12 times EBITDA. Dutch, parent of brands Joie, Current/Elliott and Equipment, sold a stake in the business to private equity firm TA Associates on Jan. 10. The deal valued the company at $500 million to $600 million, or around 10 times to 12 times EBITDA, which was roughly in the vicinity of $50 million, according to sources.

And at $1.1 billion, Apax Partners' deal to acquire rue21 (RUE) this year for nearly 10.9 times the $101 million in EBITDA it generated for its fiscal year ended Feb. 2 was one of the richest, proof that lucrative deals for mature brands are possible.

In contemplating a high multiple, Sycamore could be hoping to leverage the experience of its grizzled retail veteran Stefan Kaluzny to ring operations savings out of the troubled clothing conglomerate, and sell off underperforming parts of it in the process, while holding on to its higher-margin footwear and accessories businesses of brands such as Stuart Weitzman, Kurt Geiger and Nine West.

Or perhaps Sycamore and KKR will simply split the spoils, with Sycamore taking the apparel brands, an area in which it has the most experience, and KKR owning the footwear and accessories business.

Holding onto the most valuable brands and selling the underperformers would be a similar play to Sun Capital Partners' 2007 $762 million acquisition of St. Louis-based apparel conglomerate Kellwood in July, the jewel of Kellwood's portfolio, contemporary clothing brand Vince, filed for an IPO. At the same time, Sun Capital divested itself of BLK DNM, Baby Phat, Phat Farm, Zobha and Adam, while focusing on its high-growth businesses, including women's contemporary apparel brand Rebecca Taylor, women's luxury wear brand David Meister and women's urban wear brand XOXO. Remaining brands in Kellwood's portfolio that could have a sale tag on them include women's apparel brands Sag Harbour, Jax, Briggs New York, Rewind, Democracy, My Michelle, Sangria, and Jolt. Likewise, Jones Group divestitures, whether they come before or after a leveraged buyout, could include its Jones New York dress and suit business, as well as its denim business, not to mention its Anne Klein apparel brand, according to people familiar with the situation. In 2011, Jones Group was near a deal to sell its denim business to Delta Galil Industries for about $350 million, but after sales at the division dropped by double digits, Israel-based Delta Galil canceled the transaction in January 2012. The pressure to sell brands came from activist investor Barington Capital Group. According to news reports, however, Jones Group chose instead to put the whole company on the block. Prior to Barington's moves on the company, Jones Group was attempting over the last few years to improve earnings by acquiring footwear and accessories brands. Those deals included the acquisitions of footwear and accessories businesses Stuart Weitzman Holdings LLC and Kurt Geiger Ltd., both complementary to its Nine West footwear brand. Written by Richard Collings.

Friday, January 24, 2014

Microsoft's Tablet Strategy Pays Off


Disclosure: I own MSFT stock

Microsoft Corporation seems to be getting its business strategy right, as evidenced by a recent earnings report.

Yesterday, the company announced revenue of $24.52 billion for the quarter ending December 31, 2013. Gross margin, operating income, net income, and diluted earnings per share for the quarter were $16.24 billion, $7.97 billion, $6.56 billion, and $0.78 per share, respectively.

Markets liked the numbers — sending Microsoft's stock higher in early Friday morning trade — a bright spot in a down day for Wall Street.

One notable area of improvement has been the company's tablet segment. Surface revenue more than doubled sequentially, from $400 million in the first quarter to $893 million in the second quarter. "We delivered record revenue as demand for our business offerings remains high and we made strong progress in our Devices and Consumer segment," said Amy Hood, chief financial officer at Microsoft. "These results reflect our focus on execution, cost discipline, and long-term shareholder value as we continue to drive the strategic transformation of the company."

 

Microsoft Surface RT Launch Party

Microsoft Surface RT Launch Party (Photo credit: vernieman)

As we wrote in a previous piece, for years Microsoft tried unsuccessfully to make a foray into the tablet market, dominated by Apple. In the last year the company has had some success making its presence felt in this market, and IDC has predicted better days ahead for the software leader.

Windows-based tablets market share has risen from less than 1% in 2012 to 3.4% in 2013, and is expected to reach 10.2% in 2017.

What made the difference? What did Microsoft do right this time around?

A two-fold strategy, in our opinion.

The first was development of Surface 2, which gets the hardware-software bundle right at a competitive price. With its Windows operating systems, Office Suite and keyboard, the Surface 2 has bridged the gap between laptop and tablet, appealing to users who seek the full functionality of a laptop rather than a smartphone in a tablet.

The second strategy is a partnership with Best Buy.

Last June Microsoft MSFT +0.94% and Best Buy BBY -0.92% entered a partnership whereby Microsoft has placed Windows Stores at Best Buy. Sales of Microsoft's Surface 32GB topped the list of items sold at Best Buy on Black Friday, according to iPad Insight.

The sales picture was quite different at Walmart, where Apple AAPL -0.33%'s iPad Mini 16GB topped the list, and Target TGT +0.09%, where Apple's iPad Air 16GB topped the list.

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To be fair, data from one season isn't sufficient to confirm a trend. Nonetheless, Surface's superior performance in Best Buy stores demonstrates that electronic gadgets are not commodities that can be purchased merely anywhere, especially as these products become more sophisticated.

Besides, getting into retail can be a very profitable enterprise for gadget makers, as the history of Apple stores confirms.

Microsoft's Windows Stores occupy between 1,500 square feet to 2,200 square feet of Best Buy floor space, allowing consumers to compare and purchase a broad range of the company's products and accessories — including Windows-based tablets and PCs, Windows Phones, Microsoft Office, Xbox, and so on.

The bottom line: Though Microsoft doesn't provide unit sales for its Surface, its Tablet strategy is beginning to pay-off. Will it catch up with market pioneer and leader Apple? It remains to be seen.

 

Thursday, January 23, 2014

Famous Products Invented for the Military

While most people think private enterprise is responsible for innovation, a great deal of the technology Americans rely on comes from another well-known source: the U.S. military.

Over the years, the military, and the private enterprises developing products for the military, have created some of the most important products we use today. Some of the inventions have been less groundbreaking than others, such as Silly Putty and Aviator sunglasses. But some military research also directly led to significant innovations such as the microwave oven and the GPS.

Click here to see the eight famous products

The military contracted out most of these inventions to private companies. One exception is the modern GPS network. It was designed in the 1970s by researchers in both the Navy and Air Force and was built in the late ’70s and ’80s. The technology, initially designed as a guidance and tracking system for planes, boats and missiles, is today used in everything from commercial aircraft to personal navigation systems.

Private companies developed most of the products on this list, often answering the military’s call during wartime. During World War II, a Johnson & Johnson division created what would eventually become duct tape, originally to seal containers and quickly repair equipment in the field. The Jeep was an all-terrain scout vehicle built by a company called Willy's-Overland. The Jeep was widely used by the military in World War II and the Korean War and eventually also became a very popular domestic auto brand.

In many cases, the final use of the product completely differs from its intended military function. What eventually became feminine hygiene products under the Kotex brand was originally medical gauze developed for the military during World War I. Silly Putty was invented as a possible substitute for rubber. While it failed in this regard, it became a popular toy.

The military also played a part in developing even greater technologies. ARPANET, considered by many to be a precursor to the modern Internet, was a military program designed to share documents securely between facilities. In the 1940s and ’50s, the military even played a role in the development of the modern computer.

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24/7 Wall St. reviewed products that were either developed for military use by the military or contractors, or those which were created as the result of military research. We excluded products where the military or contractors only played a part in the development of the product, as was the case with the computer.

These are the famous products invented for the military.

Tuesday, January 21, 2014

Travelers Companies Inc Q4 Earnings Rise; Beats Estimates (TRV)

Insurance company Travelers Companies Inc (TRV) reported higher fourth quarter and full year results on Tuesday, which came in well above analysts’ estimates.

TRV’s Earnings in Brief

TRV reported Q4 earnings of $988 million, or $2.70 per share, up from just $304 million, or 78 cents per share, a year ago. Excluding special items, earnings were $981 million, or $2.68 per share,  up from $278 million, or 72 cents per share, last year. Analysts expected to see earnings of $2.10 per share. Total revenue for the quarter was  $6.74 billion, up from $6.48 billion last year. Analysts expected to see revenue of $5.45 billion. For FY2013, the company reported earnings of $3.67 billion, or $9.74 per share, up from 2.47 billion, or $6.30 per share, in 2012. Revenue for the year was $26.19 billion from $22.19 billion in 2012. On average, analysts expected to see earnings of $8.91 per share and revenue of $22.56 billion.

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CEO Commentary

Chairman and CEO Jay Fishman commented on the company’s Q4 results: ”Fourth quarter operating income of almost a billion dollars provided a very strong finish to an excellent 2013. We are encouraged by the strength of our 2013 results, and we remain committed to taking the steps necessary to continue to improve returns consistent with our long-held goal of producing mid-teens operating return on equity over time.”

TRV’s Dividend

TRV’s board announced that it will pay its next quarterly dividend of 50 cents on March 31 to shareholders of record on March 10.  This dividend remains unchanged from the company’s previous quarterly dividend. TRV will likely announce a dividend increase in April. 

 Stock Performance 

Travelers Companies shares were mostly flat during pre-market trading Tuesday.

Sunday, January 19, 2014

10 Best Medical Stocks To Watch For 2014

You would think that the medical-device sector would be rife with big gainers thanks to an aging population, but it's not quite as simple as that. Just as we saw when we examined the biotechnology sector last week, there are pros and cons to investing in medical devices.

The pros and cons of medical devices
On the positive side, medical devices should make a logistically smart play for an aging population. As technologies and manufacturing processes improve -- and health-care insurance becomes a mandate because of the full implementation of the Patient Protection and Affordable Care Act, known loosely as Obamacare, in 2014 -- the demand for medical devices ranging from implantables to simply disposable-use products in hospitals is bound to increase.

Conversely, medical-device companies walk a fine line when it comes to product efficacy sometimes and must now deal with a 2.3% medical-device excise tax that comes straight off their total revenue to help pay for the Medicaid expansion under the PPACA. St. Jude Medical, for instance, has dealt with two recalls in the past three years because of the long-term durability of its implantable products. In 2010, it recalled its defibrillator leads known as Riata, and in February, it recalled its Amplatzer TorqVue FX Delivery System for fear of fracturing in the device over time. On top of this, St. Jude will fork over 2.3% of its revenue because of the medical-device excise tax.

10 Best Medical Stocks To Watch For 2014: Rexahn Pharmaceuticals Inc (RNN)

Rexahn Pharmaceuticals, Inc. (Rexahn) is a development-stage biopharmaceutical company. The Company focuses on the development of cures for cancer to patients worldwide. The Company�� pipeline features one drug candidate in Phase II clinical trials. The Company also has several other drug candidates in pre-clinical development. In addition, the Company has two renal cell carcinoma (CNS) candidates, Serdaxin, CNS Disorders drug for depression and neurodegenerative diseases and Zoraxel, which is a erectile dysfunction (ED) and sexual dysfunction drug that are in clinical stages and the Company is are exploring options for further development . The Company�� drug candidate, Archexin is an anticancer Akt inhibitor.

Archexin

Archexin is potent inhibitor of the Akt protein kinase (Akt) in cancer cells. Archexin has FDA orphan drug designations for five cancers (RCC, glioblastoma, and cancers of the ovary, stomach and pancreas). Multiple indications for other solid tumors can also be pursued. Archexin inhibit both activated and inactivated forms of Akt, and to reverse the drug resistance observed with the protein kinase inhibitors. Archexin is an antisense oligonucleotide (ASO) compound that is complementary to Akt mRNA, and selective for inhibiting mRNA expression and production of Akt protein. As of December 31, 2011, Archexin was in Phase II clinical trials for the treatment of pancreatic cancer with enrollment completed in September, 2011.

Serdaxin

Serdaxin is an extended release formulation of clavulanic acid, which is an ingredient present in antibiotics approved by the FDA. The Company had been developing Serdaxin for the treatment of depression and neurodegenerative disorders. From January to September, 2011, the Company conducted a randomized, double-blind, placebo-controlled study compared two doses of Serdaxin, 0.5 milligram and 5 milligram, to placebo over an eight-week treatment period for major depressive disorder (MDD) patients. As of Dec! ember 31, 2011, the Company had not made a determination of Serdaxin�� future paths or resource allocations to further develop Serdaxin to treat MDD.

Zoraxel

Zoraxel is an orally administered, on-demand tablet to treat sexual dysfunction. Zoraxel is a dual enhancer of neurotransmitters in the brain that play a key role in sexual activity phases of motivation and arousal, erection and release, and may be the ED drug to affect all three of these phases of sexual activity. As of December 31, 2011, the Company was evaluating how to proceed with the Phase IIb study of Zoraxel.

The Company�� Pre-clinical Pipeline Drug Candidates includes RX-1792, which is a small molecule anticancer EGFR inhibitor; RX-5902, which is a small molecule anticancer ribonucleic acid (RNA) helicase regulator; RX-3117, which is a Small molecule anticancer deoxyribonucleic acid (DNA) synthesis Inhibitor; RX-8243, which is a small molecule anticancer aurora kinase inhibitor; RX-0201-Nano, which is a nanoliposomal anticancer Akt inhibitor; RX-0047-Nano, which is an nanoliposomal anticancer HIF-1 alpha inhibitor and RX-21101, which is a nano-polymer Anticancer.

Advisors' Opinion:
  • [By James E. Brumley]

    With just a quick glance at a chart of Rexahn Pharmaceuticals, Inc. (NYSEMKT:RNN), it would be easy to conclude it's nothing but a volatile mess. When you take a step back and look at a long-term weekly chart of RNN, however, it starts to become clear that this small cap biopharma name is on the verge of a monster-sized breakout. First things first, however.

  • [By James E. Brumley]

    If you were lucky enough to step into Rexahn Pharmaceuticals, Inc. (NYSEMKT:RNN) when your truly suggested it was a budding buy back on December 23rd, then congratulations - you're now up a little more than 60% (assuming you bought into RNN after the break above a key resistance line on the 27th). Now get out. Instead, use your profits from the Rexahn to take on a stake in GTx, Inc. (NASDAQ:GTXI). No, GTXI may not look like much at first, but when you take a step back and look at a chart of GTx, Inc. through a longer-term lens, the upside potential becomes clear.

10 Best Medical Stocks To Watch For 2014: Cell Therapeutics Inc (CTIC.A)

Cell Therapeutics, Inc. (CTI), incorporated in 1991, develops, acquires and commercializes treatments for cancer. The Company�� research, development, acquisition and in-licensing activities concentrate on identifying and developing new ways to treat cancer. As of December 31, 2011, CTI focused its efforts on Pixuvri (pixantrone dimaleate) (Pixuvri), OPAXIO (paclitaxel poliglumex) (OPAXIO), tosedostat, brostallicin and bisplatinates. As of December 31, 2011, it developed Pixuvri, an anthracycline derivative for the treatment of hematologic malignancies and solid tumors. Another late-stage drug candidate of the Company, OPAXIO, is being studied as a potential maintenance therapy for women with advanced stage ovarian cancer, who achieve a complete remission following first-line therapy with paclitaxel and carboplatin. As of December 31, 2011, it also developed tosedostat in collaboration with Chroma Therapeutics, Ltd. (Chroma). On May 31, 2012, CTI completed its acquisi tion gaining worldwide rights to S*BIO Pte Ltd.'s (S*BIO) pacritinib.

Pixuvri

As of December 31, 2011, the Company developed Pixuvri, an aza-anthracenedione derivative, for the treatment of non-Hodgkin�� lymphoma (NHL), and various other hematologic malignancies, and solid tumors. Pixuvri was studied in the Company�� EXTEND, or PIX301, clinical trial, which was a phase III single-agent trial of Pixuvri for patients with relapsed, refractory aggressive NHL who received two or more prior therapies and who were sensitive to treatment with anthracyclines. On September 28, 2011, CTI announced that a second independent radiology assessment of response and progression endpoint data from its PIX301 clinical trial of Pixuvri was achieved with statistical significance. The results of the EXTEND trial met its primary endpoint and showed that patients randomized to treatment with Pixuvri achieved a significantly higher rate of confirmed and unconfirmed co mplete response compared to patients treated with standard! c! hemotherapy had a significantly increased overall response rate and experienced a statistically significant improvement in median progression free survival. Pixuvri had predictable and manageable toxicities when administered at the proposed dose and schedule in the EXTEND clinical trial in heavily pre-treated patients. In March 2011, the Company initiated the PIX-R trial to study Pixuvri in combination with rituximab in patients with relapsed/refractory diffuse large B-cell lymphoma (DLBCL). Pixuvri has also been studied in patients with HER2-negative metastatic breast cancer who have tumor progression after at least two, but not more than three, prior chemotherapy regimens. In the second quarter of 2010, the NCCTG opened this phase II study for enrollment. The study is closed to accrual and results are expected to be reported by the NCCTG later in 2012.

OPAXIO

OPAXIO is the Company�� biologically-enhanced chemotherapeutic agent that links pacli taxel to a biodegradable polyglutamate polymer, resulting in a new chemical entity. As of December 31, 2011, the Company focused its development of OPAXIO on ovarian, brain, esophageal, head and neck cancer. OPAXIO was designed to improve the delivery of paclitaxel to tumor tissue while protecting normal tissue from toxic side effects. In November 2010, results were presented by the Brown University Oncology Group from a phase II trial of OPAXIO combined with temozolomide (TMZ), and radiotherapy in patients with newly-diagnosed, high-grade gliomas, a type of brain cancer. The trial demonstrated a high rate of complete and partial responses and a high rate of six month progression free survival (PFS). Based on these results, the Brown University Oncology Group has initiated a randomized, multicenter, phase II study of OPAXIO and standard radiotherapy versus TMZ and radiotherapy for newly diagnosed patients with glioblastoma with an active gene termed MGMT that reduces respons iveness to TMZ. A phase I/II study of OPAXIO combined ! with r! a! diothera! py and cisplatin was initiated by SUNY Upstate Medical University, in patients with locally advanced head and neck cancer.

Tosedostat

In March 2011, the Company entered into a co-development and license agreement with Chroma Therapeutics, Ltd. (Chroma), providing the Company with marketing and co-development rights to Chroma�� drug candidate, tosedostat, in North, Central and South America. Tosedostat is an oral, aminopeptidase inhibitor that has demonstrated anti-tumor responses in blood related cancers and solid tumors in phase I-II clinical trials. Interim results from the phase II OPAL study of tosedostat in elderly patients with relapsed or refractory acute myeloid leukemia (AML) showed that once-daily, oral doses of tosedostat had predictable and manageable toxicities and results demonstrated response rates, including a high-response rate among patients who received prior hypomethylating agents, which are used to treat myelodysplastic synd rome (MDS), a precursor of AML.

Brostallicin

As of December 31, 2011, the Company developed brostallicin through its wholly owned subsidiary, Systems Medicine LLC, which holds rights to use, develop, import and export brostallicin. Brostallicin is a synthetic deoxyribonucleic acid (DNA) minor groove binding agent that has demonstrated anti-tumor activity and a favorable safety profile in clinical trials, in which more than 230 patients have been treated as of December 31, 2011. The Company uses a genomic-based platform to guide the development of brostallicin. A phase II study of brostallicin in relapsed, refractory soft tissue sarcoma met its predefined activity and safety hurdles and resulted in a first-line phase II clinical trial study that was conducted by the European Organization for Research and Treatment of Cancer (EORTC).

The Company competes with Bristol-Myers Squibb Company, Sanofi-Aventis, Pfizer, Roche Group, Genentech, Inc., Astellas Pharma, Eli Lilly and Company, Cel! gene, Tel! ik! , Inc., T! EVA Pharmaceuticals Industries Ltd. and PharmaMar.

Top 10 Dividend Stocks To Invest In Right Now: Oxford BioMedica PLC (OXB)

Oxford BioMedica plc is a biopharmaceutical company developing gene-based medicines and therapeutic vaccines. The Company�� LentiVector platform products include ProSavin, RetinoStat, StarGen, UshStat, EncorStat, Glaucoma-GT and MoNuDin. Its 5T4 Tumour Antigen produces TroVax and Anti-5T4 antibody. The Prime Boost�� product includes Hi-8 Mel. Its GDEPT platform produces MetXia and Anti Angiogenesis platform produces EndoAngio-GT. The Company is developing four LentiVector platform product candidates for the treatment of ocular diseases: RetinoStat for wet age-related macular degeneration (AMD); StarGen for Stargardt disease; UshStat for Usher syndrome type 1B, and EncorStat for corneal graft rejection. TroVax is a therapeutic vaccine that stimulates the immune system to destroy cancerous cells expressing the 5T4 tumour antigen. On February 25, 2011, the Company purchased a freehold property, United Kingdom comprising a manufacturing facility.

10 Best Medical Stocks To Watch For 2014: DiaMedica Inc (DMA.V)

DiaMedica Inc. (DiaMedica) is a development-stage company. The Company is a biopharmaceutical company engaged in the discovery and development of drugs for the treatment of diabetes and related diseases. DiaMedica's compound, DM-199, is a recombinant human protein for the treatment of both Type I and Type II diabetes and their complications. DiaMedica is starting a Phase I/II clinical trial for DM-199. DM-199 is a recombinant human protein, which improves glucose control, protects beta cells through the expansion of a population of antigen-specific immunosuppressive cells (Tregs), and proliferates insulin producing beta cells through the activation of certain growth factors. The Company�� DM-204 is a G-protein-coupled receptor agonist (GPCR) monoclonal antibody to treat Type II diabetes and some of the associated complication's. activating a receptor resulted in insulin sensitivity, insulin secretion and vasodilation.

10 Best Medical Stocks To Watch For 2014: Soligenix Inc (SNGX)

Soligenix, Inc., incorporated on January 16, 1987, is a development-stage biopharmaceutical company. The Company is focused on developing products to treat the side effects of cancer treatment and gastrointestinal diseases, as well as developing several biodefense vaccines and therapeutics. The Company operates in two business segments: BioTherapeutics and BioDefense. As of December 31, 2011, the Company�� products, which were under development, include orBec, SGX201, SGX203, LPM Leuprolide, ThermoVax, RiVax and SGX202. On September 15, 2011 the Company's Phase III clinical trial for orBec in the treatment of gastrointestinal Graft-versus-Host disease (GI GVHD). In addition, the Company is developing oral BDP in other therapeutic indications, such as pediatric Crohn's disease and radiation enteritis.

BioTherapeutics Overview

The Company's BioTherapeutics business segment focuses to develop orBec (oral beclomethasone dipropionate( oral BDP)) and other biotherapeutic products, while the Company's collaboration partner, Sigma-Tau Pharmaceuticals, Inc. (Sigma-Tau) will commercialize orBec and oral BDP in North America and Europe, if approved. orBec represents a first-of-its-kind oral, locally acting therapy tailored to treat the gastrointestinal manifestation of Graft-versus-Host disease (GVHD). orBec is formulated for oral administration as a single product consist of two tablets. SGX201 is a delayed-release formulation of beclomethasone dipropionate (BDP) specifically designed for oral use. SGX203 is a two pill delivery system of a delayed release formulation of BDP specifically designed for oral use that allows for delivery of immediate and delayed release BDP throughout the small bowel and the colon. The Company's Lipid Polymer Micelle (LPM) oral drug delivery system is a platform technology.

Vaccines/BioDefense Overview

The Company's Vaccines/BioDefense business segment includes RiVax, the Company's ricin toxin vaccine, and SGX204, its anthrax v! accine, and SGX202, its gastrointestinal acute radiation syndrome (GI ARS) program. The Company�� Thermostability technology, ThermoVax, is a method of rendering aluminum salt, Alum, adjuvanted vaccines stable at elevated temperatures. SGX204 is the Company�� acquired vaccine based on a recombinant Protective Antigen (rPA) derivative. RiVax is the Company�� vaccine developed to protect against exposure to ricin toxin. SGX202 is an oral immediate and delayed release formulation of the corticosteroid beclomethasone dipropionate (BDP) is being developed for the treatment of GI ARS.

The Company competes with Genzyme, Abgenix, and PDL BioPharma, Inc., Kiadis Pharma, Chiesi Pharmaceuticals, Bill and Melinda Gates Foundation and PATH, Kansas University Macromolecular and Vaccine Stabilization Center, Variation Biotechnologies, Inc, Emergent BioSolutions, Inc, Pharmathene, Dynavax, Panacea Biotech, Paxvax, Elusys Therapeutics, Pfenex, Compass Biotech, Endo Pharmaceuticals, Human Genome Sciences, Elusys Therapeutics, Medarex, Bavarian Nordic, the U.S. Army Medical Research Institute of Infectious Diseases, Cleveland Biolabs, Aeolus Pharmaceuticals, Boulder Biotechnology, RxBio, Inc., Exponential Biotherapies Inc., Osiris Therapeutics, Inc., ImmuneRegen BioSciences, Inc., Neumedicines, Inc., Cellerant Therapeutics, Onconova Therapeutics, Inc., Araim Pharmaceuticals, Inc., EVA Pharmaceuticals, Terapio, Cangene Corporation, Humanetics Corporation, the University of Arkansas Medical Sciences Center, Novartis, Medimmune, and Ariad.

10 Best Medical Stocks To Watch For 2014: StemCells Inc (STEM.W)

StemCells, Inc. (StemCells), incorporated in August 1988, is engaged in the research, development, and commercialization of stem cell therapeutics and related tools and technologies for academia and industry. The Company is focused on developing and commercializing stem and progenitor cells as the basis for therapeutics and therapies, and cells and related tools and technologies to enable stem cell-based research and drug discovery and development. The Company�� primary research and development efforts are focused on identifying and developing stem and progenitor cells as potential therapeutic agents. The Company has two therapeutic product development programs, including its CNS Program, which is developing applications for HuCNS-SC cells, its human neural stem cell product candidate, and its Liver Program, which is characterizing the Company�� human liver cells as a therapeutic product.

CNS Program

The Company in its CNS Program, is in clinical development with its HuCNS-SC cells for a range of disorders of the central nervous system. The CNS includes the brain, spinal cord and eye. In February 2012, the Company had completed a Phase I clinical trial in Pelizeaus-Merzbacher Disease (PMD), a fatal myelination disorder in the brain.

The Company�� CNS Program is focused on developing clinical applications, in which transplanting HuCNS-SC cells protect or restore organ function of the patient before such function is irreversibly damaged or lost due to disease progression. The Company�� initial target indications are PMD, and more generally, diseases in which deficient myelination plays a central role, such as cerebral palsy or multiple sclerosis; spinal cord injury, disorders in which retinal degeneration plays a central role, such as age-related macular degeneration or retinitis pigmentosa. The Company�� product candidate, HuCNS-SC cells, is a purified and expanded composition of normal hum an neural stem cells. Its HuCNS-SC cells can be directly tr! a! nsplanted.

Liver Program

Liver stem or progenitor cells offer an alternative treatment for liver diseases. A liver cellular therapy or cell-based therapeutic provide or support liver function in patients with liver disease. The Company held a portfolio of issued and allowed patents in the liver field, which cover the isolation and use of both hLEC cells and the isolated subset, as well as the composition of the cells themselves.

The Company�� range of cell culture products, which are sold under the SC Proven brand, includes iSTEM, GS1-R, GS2-M, RHB-A, RHB-Basal, NDiff N2, and NDiff N2B27. Its iSTEM is a serum-free, feeder-free medium that maintains mouse embryonic stem cells in their pluripotent ground state by using selective small molecule inhibitors to block the pathways, which induce differentiation. RHB-A is a defined, serum-free culture medium for the selective culture of human and mouse neural stem cells and their maintenanc e and expansion as adherent cell populations. RHB-Basal is a defined, serum-free basal medium. When supplemented with specific growth factors, this media is formulated for the propagation and differentiation of adherent neural stem cells. RHB-Basal can also be tailored to specific-cell type requirements by the addition of customer preferred supplements.

The Company�� NDiff N2 is a defined serum-free scell culture supplement for the derivation, maintenance, expansion and/or differentiation of human and mouse embryonic stem (ES) cells and tissue-derived neural stem cells supplement. Its NDiff N2-AF is a serum-free and animal component-free version of NDiff N2. Its NDiff N2B27 is a defined, serum-free medium for the differentiation of mouse embryonic stem cells to neural cell types. NDiff N27-AF is a serum-free and animal component-free version of NDiff N27. Its GS1-R is a serum-free media formulation shown to enable the derivation and long-term maintenance of tr ue, germline competent rat embryonic stem cells without! the ! ad! dition ! of cytokines or growth factors. Its GS2-M is a defined, serum- and feeder-free medium for the derivation and long-term maintenance of true, germline competent mouse iPS cells.

The Company also markets a number of antibody reagents for use in cell detection, isolation and characterization. These reagents are also under the SC Proven brand and it includes STEM24, STEM101, STEM121 and STEM123. Its STEM24 is a human antibody that recognizes human CD24, also known as heat stable antigen (HSA), a glycoprotein expressed on the surface of many human cell types, including immature human hematopoietic cells, peripheral blood lymphocytes, erythrocytes and many human carcinomas. Its CD24 is also a marker of human neural differentiation. Its STEM101 is a human-specific mouse antibody that recognizes the Ku80 protein found in human nuclei. Its STEM121 is a human-specific mouse antibody that recognizes a cytoplasmic protein of human cells. Its STEM123 is a human-specific mouse antibody that recognizes human glial fibrillary acidic protein (GFAP).

The Company�� Other products marketed under SC Proven include total cell genomic DNA (gDNA), RNA and protein lysate reagents purified from homogenous stem cell populations for intra-comparative studies, such as Epigenetic fingerprinting, Southern, Western and Northern blots, PCR, RT-PCR and microarrays. This range of purified stem cell line lysates includes mouse embryonic stem (ES) cells propagated in SC Proven 2i inhibitor-based GS2-M media and mouse ES cell-derived and fetal tissue-derived neural stem (NS) cells propagated in SC Proven RHB-A media.

10 Best Medical Stocks To Watch For 2014: Autoimmune Inc (AIMM)

AutoImmune Inc., incorporated in September 1988, is a healthcare company. The Company�� products are based on the principles of mucosal tolerance. The Company�� product is sold by Colloral LLC, the Company�� joint venture with Deseret, under the brand name Colloral, The Collagen Solution and Vital 3, and by Futurebiotics LLC under the brand name Vital 3. The other products which are in the development stage include MBP8298 (dirucotide), Oral Copaxone and AI 401.

The Company completed ten human clinical trials involving over 1,900 patients to investigate the use of Colloral as a pharmaceutical for treating symptoms of rheumatoid arthritis. The Company holds a joint venture with Deseret by forming Colloral LLC to manufacture market and sell Colloral as a dietary supplement. Colloral LLC holds a distributing agreement with Futurebiotics LLC for Colloral. Futurebiotics LLC markets the product under the brand name Vital 3. Colloral LLC also markets the product under the Vital 3 brand through The Shopping Channel of Canada via on air segments and their Website.

The Company�� other products in the development stage include MBP8298 (dirucotide) for multiple sclerosis, which is in Phase III trials for secondary progressive multiple sclerosis; Oral Copaxone is in the research stage for multiple sclerosis, and AI 401 is in Phase III trials for Type 1 diabetes. The development of MBP8298 (dirucotide) is conducted by BioMS Medical Corporation (BioMS). In August 2000, BioMS tested patients in a Phase II/III (MAESTRO-01) clinical trial of its MBP8298 treatment for secondary progressive multiple sclerosis. It was conducted at 47 sites across Canada and Europe. In November 2006, BioMS enrolled in a Phase II clinical trial (MINDSET-01) of MBP8298 for treatment of relapsing remitting multiple sclerosis. It enrolled 218 patients at 24 sites in six countries for a 15 month trial.

The Company collaborated with Eli Lilly, which supports clinical testing of orally administered a! utoimmune-mediated (Type 1) diabetes product, AI 401. Eli Lilly completed three different Phase II clinical trials to demonstrate human proof of principle for AI 401. The United States study was a one-year, double-blind, placebo-controlled trial with more than 200 patients, designed to measure immunological changes, preservation of pancreatic function and time to insulin dependence. Its second Phase II trial, involving approximately 150 patients, was conducted in France. The third trial was conducted in Italy with approximately 80 patients. In addition, Eli Lilly provided AI 401 for the Diabetes Prevention Trial (DPT-1) conducted by the National Institutes of Health (NIH). During the year ended December 31, 2008, the clinical trial of intranasal insulin to delay or prevent the clinical onset of Type I diabetes, called the Diabetes Prediction and Prevention Project was conducted in Finland. As of January 1, 2009, 115 had been enrolled in this trial.

10 Best Medical Stocks To Watch For 2014: Spectrum Pharmaceuticals Inc.(SPPI)

Spectrum Pharmaceuticals, Inc., a commercial-stage biotechnology company, primarily focuses on oncology and hematology. The company engages in acquiring, developing, and commercializing a broad and diverse pipeline of late-stage clinical and commercial products. It markets Zevalin, a prescribed form of cancer therapy, radioimmunotherapy; and Fusilev, a novel folate analog formulation and the pharmacologically active isomer of the racemic compound, calcium leucovorin. The company?s drugs in late stage development include Apaziquone, an anti-cancer agent; and Belinostat, a histone deacytelase inhibitor. Its drugs in development also include Ozarelix a luteinizing hormone releasing hormone antagonist, which is in Phase II clinical stage; SPI-1620, a peptide agonist of endothelin B receptors, which is in Phase I clinical stage; and RenaZorb, a lanthanum-based nanoparticle phosphate binding agent, which is in preclinical stage. The company was formerly known as NeoTherapeutics, Inc. and changed its name to Spectrum Pharmaceuticals, Inc. in December 2002. Spectrum Pharmaceuticals, Inc. was founded in 1987 and is based in Henderson, Nevada.

Advisors' Opinion:
  • [By Jake L'Ecuyer]

    Spectrum Pharmaceuticals (NASDAQ: SPPI) shares tumbled 9.77 percent to $8.18 after the company announced an offering of $100 million of convertible notes.

  • [By Keith Speights]

    Another prime case study for this comes from Spectrum Pharmaceuticals (NASDAQ: SPPI  ) . Spectrum's stock more than doubled from October 2011 through July 2012. However, shares plunged 55% from those highs because business dynamics changed since then. A shortage of a generic rival to Spectrum's lead drug Fusilev was alleviated, resulting in sales slowing down considerably.�

10 Best Medical Stocks To Watch For 2014: Dyadic International Inc (DYAI)

Dyadic International, Inc. (Dyadic), incorporated in September 2002, is a holding company. The Company is a global biotechnology company. The Company has operations at the United States and the Netherlands. Dyadic uses its technologies to conduct research and development (R&D) and commercial activities for the discovery, development, manufacture and sale of enzymes and proteins for the bioenergy, industrial enzyme, and biopharmaceutical industries. The Company derives all of its revenues from the licensing of its technologies, the sale of its enzymes and conducting research and development (R&D) activities for third parties. The Company operates in two segments: the United States operations and The Netherlands operations. The United States segment includes a subsidiary in Poland.

The United States operating segment is a developer, manufacturer and distributor of enzyme products, proteins, peptides and other bio-molecules derived from genes and a collaborative licensor of enabling technologies for the development and manufacturing of biological products and use in R&D. The Netherlands operating segment is also a researcher and developer of enzyme products, proteins, peptides and other bio-molecules derived from genes and, to date, has mainly invested in R&D activities.

Dyadic�� R&D activities focus on its fungal strains and associated technologies. Dyadic uses its Trichoderma and C1 fungal strains in the production of its industrial enzymes. Dyadic manufactures and sells liquid and dry enzyme products to global customers for use within the animal feed, pulp and paper, starch and alcohol, food and brewing, textiles, and biofuels industries.

Dyadic also utilizes a technology platform based on its patented and C1 fungus (the C1 Platform Technology), which enables the development and manufacture of proteins and enzymes for diverse market opportunities. The C1 Platform Technology can also be used to screen for the discovery of novel genes and proteins. The C1 Platf! orm Technology also has the potential of developing and producing other biological products such as antibodies, vaccines, proteins and polypeptides for the biopharmaceutical industry.

10 Best Medical Stocks To Watch For 2014: Hemispherx Biopharma Inc (HEB)

Hemispherx Biopharma, Inc. (Hemispherx) is a specialty pharmaceutical company engaged in the clinical development of new drugs therapies based on natural immune system enhancing technologies for the treatment of viral and immune based chronic disorders. Hemispherx focuses on two core pharmaceutical technology platforms Ampligen and Alferon N Injection.The commercial focus for Ampligen includes application as a treatment for Chronic Fatigue Syndrome (CFS) and as an influenza vaccine enhancer (adjuvant) for both therapeutic and preventative vaccine development. Alferon N Injection is a United States Food and Drug Administration (FDA) approved product with an indication for refractory or recurring genital warts. Alferon LDO (Low Dose Oral) is a formulation under development targeting influenza. It has three subsidiaries BioPro Corp., BioAegean Corp., and Core BioTech Corp. The Company's foreign subsidiary is Hemispherx Biopharma Europe N.V./S.A.

Ampligen

Ampligen is an experimental drug, which is undergoing clinical development for the treatment of Myalgic Encephalomyelitis/Chronic Fatigue Syndrome (ME/CFS). Over 1,000 patients have participated in the Ampligen clinical trials representing the administration of more than 90,000 doses of this drug. The Company is also engaged in ongoing, experimental studies assessing the efficacy of Ampligen against influenza viruses.

Alferon N Injection

Alferon N Injection is the registered trademark for the Company's injectable formulation of natural alpha interferon. Interferons are a group of proteins produced and secreted by cells to combat diseases. The Company's natural alpha interferon is produced from human white blood cells. Alferon N Injection [Interferon alfa-n3 (human leukocyte derived)] is a highly purified, natural-source, glycosylated, multi-species alpha interferon product.

Alferon LDO (Low Dose Oral)

Alferon LDO [Low Dose Oral Interferon Alfa-n3 (Human Leukocyte Derived)]! is an experimental low-dose, oral liquid formulation of Natural Alpha Interferon and like Alferon N Injection should not cause antibody formation, which is a problem with recombinant interferon. It is an experimental immunotherapeutic that works by stimulating an immune cascade response in the cells of the mouth and throat, enabling it to bolster systemic immune response through the entire body by absorption through the oral mucosa.

The Company competes with Pfizer, GlaxoSmithKline, Merck, AstraZeneca, Baxter International, Fletcher/CSI, AVANT Immunotherapeutics, AVI BioPharma and Genta.

Saturday, January 18, 2014

Bond yields may fall in coming months: Mecklai

European credit markets remained under severe stress for most parts of last year, being weighed down by intensifying sovereign debt worries across the 17-member area. With banks across Euro area facing severe liquidity crunch, the ECB conducted Long-Term Refinancing Operation (LTRO) on 21st Dec 2011, in which unlimited funding were provided to several EU banks. This in turn led to considerable fall amongst most EU government bond yields, as funds flowed from banks into the credit markets.

With the ECB set to allot funds to EU banks later today via the second round of LTRO, we may see a similar fall in bond yields in the months to come.

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Best Low Price Companies To Buy For 2014

To read the full report click here

Tuesday, January 14, 2014

Where Will DreamWorks Animation Go Next?

With shares of Dreamworks Animation (NYSE:DWA) trading around $34, is DWA an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Dreamworks is engaged in the development and production of animated films and their associated characters in the worldwide film, home entertainment, television, merchandising and licensing markets. The company aims to create family entertainment, including animated feature films, television specials and series, live entertainment properties and related consumer products, meant for audiences of all ages. The company's films are distributed through many outlets by Paramount Pictures Corporation, a subsidiary of Viacom (NYSE:VIA).

Dreamworks has teamed up with YouTube to create a new series, "YouTube Nation," according to media reports on Friday. The Glendale animation studio will co-produce the series with the online video-sharing website. YouTube, a San Bruno-based subsidiary of Google Inc., will provide the financing, the Los Angeles Times reported.

T = Technicals on the Stock Chart are Strong

Dreamworks stock has been exploding to the upside after establishing lows in 2012. However, the stock is currently trading sideways as it digests gains. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Dreamworks is trading above its rising key averages, which signal neutral to bullish price action in the near-term.

DWA

(Source: Thinkorswim)

Taking a look at the implied volatility (red) and implied volatility skew levels of Dreamworks options may help determine if investors are bullish, neutral, or bearish.

Implied Volatility (IV)

10 Best Financial Stocks To Invest In 2014

30-Day IV Percentile

90-Day IV Percentile

Dreamworks options

22.00%

6%

3%

What does this mean? This means that investors or traders are buying a very small amount of call and put options contracts, as compared to the last 30 and 90 trading days.

Put IV Skew

Call IV Skew

February Options

Flat

Average

March Options

Flat

Average

As of today, there is an average demand from call buyers or sellers and low demand by put buyers or high demand by put sellers, all neutral to bullish over the next two months. To summarize, investors are buying a very small amount of call and put option contracts and are leaning neutral to bullish over the next two months.

On the next page, let’s take a look at the earnings and revenue growth rates and the conclusion.

E = Earnings Are Mixed Quarter-Over-Quarter

Rising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on Dreamworks’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Dreamworks look like and more importantly, how did the markets like these numbers?

2013 Q3

2013 Q2

2013 Q1

2012 Q4

Earnings Growth (Y-O-Y)

-58.62%

73.33%

-36.36%

-441.46%

Revenue Growth (Y-O-Y)

-17.04%

5168.82%

-1.06%

20.87%

Earnings Reaction

17.36%

8.84%

7.31%

-1.80%

Dreamworks has seen decreasing earnings and mixed revenue figures over the last four quarters. From these numbers, the markets have had mixed feelings about Dreamworks’s recent earnings announcements.

P = Excellent Relative Performance Versus Peers and Sector

How has Dreamworks stock done relative to its peers, Twenty-First Century Fox (NYSE:FOXA), Disney (NYSE:DIS), Lions Gate Entertainment (NYSE:LGF), and sector?

Dreamworks

Twenty-First Century Fox

Disney

Lions Gate Entertainment

Sector

Year-to-Date Return

-2.85%

-7.80%

-3.51%

-5.56%

-5.93%

Dreamworks has been a relative performance leader, year-to-date.

Conclusion

Dreamworks is a provider of highly-demanded entertainment products to eager audiences around the world. The company has teamed up with YouTube to create a new series. The stock is now digesting gains after a strong surge higher. Over the last four quarters, earnings have decreased for the company while revenue figures have been mixed which has produced mixed feelings among investors. Relative to its peers and sector, Dreamworks has been a year-to-date performance leader. Look for Dreamworks to OUTPERFORM.

Monday, January 13, 2014

Will Boeing Fly Higher?

With shares of Boeing (NYSE:BA) trading around $107, is BA an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Boeing is an aerospace company. It focuses primarily on engineering, information technology, research and development, test and evaluation, technology strategy development, environmental remediation management and intellectual property management. The company operates in five segments: Commercial Airplanes, Boeing Military Aircraft, Network & Space Systems, Global Services & Support, and Boeing Capital Corporation.

Just recently, one of Boeing's jets crashed in San Francisco, but luckily, the plane had several built-in safety features that helped save lives in the accident. On Monday, the company faced another plane crash in the news. This time a plane flying from Nashville that crash-landed in New York. The plane crashed when its front landing gear wouldn't release, causing the craft to land on its nose. Luckily, all injuries being reported so far are minor. As a leading provider of aerospace products and services to large corporations, not to mention the U.S. government, look for Boeing to continue to advance and develop space and fuel aerial progress.

T = Technicals on the Stock Chart are Strong

Boeing stock has been flying higher over the last several years. The stock is now trading near all-time high prices and it looks set to continue higher. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Boeing is trading above its rising key averages which signal neutral to bullish price action in the near-term.

BA

(Source: Thinkorswim)

Taking a look at the implied volatility (red) and implied volatility skew levels of Boeing options may help determine if investors are bullish, neutral, or bearish.

Implied Volatility (IV)

30-Day IV Percentile

90-Day IV Percentile

Boeing Options

27.55%

70%

68%

What does this mean? This means that investors or traders are buying a very significant amount of call and put options contracts, as compared to the last 30 and 90 trading days.

Put IV Skew

Call IV Skew

August Options

Flat

Average

September Options

Flat

Average

As of today, there is an average demand from call buyers or sellers and low demand by put buyers or high demand by put sellers, all neutral to bullish over the next two months. To summarize, investors are buying a very significant amount of call and put option contracts and are leaning neutral to bullish over the next two months.

On the next page, let’s take a look at the earnings and revenue growth rates and the conclusion.

E = Earnings Are Mixed Quarter-Over-Quarter

Rising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on Boeing’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Boeing look like and more importantly, how did the markets like these numbers?

2013 Q1

2012 Q4

2012 Q3

2012 Q2

Earnings Growth (Y-O-Y)

18.03%

-30.91%

-7.53%

1.60%

Revenue Growth (Y-O-Y)

-2.53%

14.05%

12.87%

20.93%

Earnings Reaction

3.00%

1.27%

-0.15%

2.77%

Boeing has seen mixed earnings and revenue figures over the last four quarters. From these numbers, the markets have mostly been pleased with Boeing’s recent earnings announcements.

P = Excellent Relative Performance Versus Peers and Sector

How has Boeing stock done relative to its peers, Lockheed Martin (NYSE:LMT), Spirit Aerosystems (NYSE:SPR), Northrop Grumman (NYSE:NOC), and sector?

Boeing

Lockheed Martin

Spirit Aerosystems

Northrop Grumman

Sector

Year-to-Date Return

42.42%

28.02%

40.78%

31.87%

33.47%

Boeing has been a relative performance leader, year-to-date.

Conclusion

Boeing is an aerospace company and provider of aircrafts and related items and services to corporations and governments worldwide. The company has recently been in the news due to a couple of crashes their planes were involved in. The stock has been on a strong run over the last several months and is now trading near all-time high prices. Over the last four quarters, investors in the company have mostly been pleased in light of mixed earnings and revenue figures. Relative to its peers and sector, Boeing has been a year-to-date performance leader. Look for Boeing to continue to OUTPERFORM.

Thursday, January 9, 2014

Alibaba bans Bitcoin amid China crackdown

bitcoin alibaba

Alibaba has banned Bitcoin on its shopping networks.

HONG KONG (CNNMoney) China's top Internet retailer has prohibited the use of Bitcoin on its shopping platforms amid a regulatory crackdown targeting the digital currency.

The decision will make practical use of bitcoin even more difficult in China, despite massive interest from investors in the alternative currency.

Alibaba said in a post on its website that the regulation will take effect on January 19, and would extend to other digital currencies including Litecoins.

John Spelich, a company spokesman, confirmed the policy in an email saying the ban was implemented "in the interest of consumer protection."

Demand for bitcoin has been particularly strong in China, where investors have eagerly embraced the currency and helped drive its price to dramatic highs above $1,000 in recent weeks.

But regulators have taken a dim view of Bitcoin, and the central bank last month issued rules that prohibit financial institutions from dealing in the digital currency.

Ron Paul: Bitcoin could help end dollar   Ron Paul: Bitcoin could help end dollar

While the central bank did not outlaw or prohibit individuals from owning bitcoin, the guidelines specify that it is not to be considered a currency. The new rules prohibit financial institutions in China from trading, underwriting or offering insurance in bitcoin.

Chinese regulators have also directed third-party payment services to stop working with bitcoin exchanges.

This is not the first time that Beijing has moved to place restrictions on an alternative currency. The central bank also took a dim view of the QQ coin, a popular virtual currency created by tech pioneer Tencent. The government restricted its use to virtual products in 2009.

In the United States, lawmakers have been examining potential regulations for Bitcoin, which is the currency of choice on certain online markets for drugs and other illicit goods.

Bitcoin has received a measure of support from officials at the Federal Reserve, including chairman Ben Bernanke, who said the currency "may hold long-term promise" as part of the international p! ayment system.

Best Stock Investments For 2014

Some supporters say government regulation would be a positive for Bitcoin, since it could lead to wider adoption of the currency. But others argue that Bitcoin is decentralized by design and the government should leave well alone. To top of page

Tuesday, January 7, 2014

Top Biotech Companies To Own In Right Now

Popular Posts: 7 Biotechnology Stocks to Buy Now7 “Triple A” Stocks to Buy16 Oil and Gas Stocks to Sell Now Recent Posts: 22 Commercial Banking Stocks to Buy Now 5 Stocks With Crummy Earnings Surprises ��WPC CBB ROMA MOD NX 4 Stocks With Ugly Earnings Momentum ��FNBN NAV SGK LGCY View All Posts

This week, these four stocks have the worst ratings in Earnings Momentum, one of the eight Fundamental Categories on Portfolio Grader.

FNB United (NASDAQ:) is a bank holding company. FNBN also gets F’s in Equity and Cash Flow. .

Top Biotech Companies To Own In Right Now: Amarantus Bioscience Holdings Inc (AMBS)

Amarantus BioScience Holdings, Inc., formerly Amarantus BioSciences, Inc., incorporated on March 22, 2013, is focuses on developing intellectual property and proprietary technology in order to develop drug candidates and diagnostic blood tests to diagnose and treat human diseases. The Company owns the intellectual property rights to a therapeutic protein known as Mesencephalic-Astrocyte-derived Neurotrophic Factor (MANF), owns the intellectual property rights to biomarkers related to oncology and neurodegeneration named BC-SeraPro and NuroPro respectively, has a license to an Alzheimer�� disease blood test named LymPro, and owns a number of proprietary cell lines called PhenoGuard. MANF was the first therapeutic protein discovered from a PhenoGuard Cell Line. In December 2012, the Company acquired neurodegenerative diagnostic portfolio from Power3 Medical Products. On March 22, 2013, the Company was merged with into Amarantus Bioscience Inc.

The Company also owns an inventory of 88 cell lines that Amarantus refers to as PhenoGuard Cell Lines. MANF is a protein that corrects protein misfolding. The Company�� MANF product development effort is centered on a therapy for Parkinson�� disease.

Advisors' Opinion:
  • [By Bryan Murphy]

    I've taken bullish swings on - and been wrong to do so - Amarantus BioScience, Inc. (OTC:AMBS) before. My most recent bullish call on the budding biotech name was in April... a rally that fizzled shortly after I said it was just getting started. Somehow though, I find myself coming back to AMBS as a breakout candidate. This time, however, it's for a slightly different reason.

  • [By Bryan Murphy]

    Two weeks ago I penned some bullish thoughts on Amarantus BioScience, Inc. (OTC:AMBS). In simplest terms, I liked the way the stock had spent some time in consolidation mode, and looked like was testing the upper boundary of that zone - I figured a breakout from AMBS was imminent. So I waited... and waited.... and waited. Nothing. A week and a half later, I let the stock fall off my mental radar. As it turns out, I should have been a little more patient. Amarantus BioScience finally did the deed yesterday, and is following through today.

Top Biotech Companies To Own In Right Now: Scancell Holdings PLC (SCLP)

Scancell Holdings PLC is a United Kingdom-based company. The Company�� principal activity of the consists of the discovery and development of monoclonal antibodies and vaccines for the treatment of cancer. In April 2012, the Company completed recruitment to the Phase 1 clinical trial of SCIBI. In May 2012, the Company commenced recruitment and treatment of the first patient in the second part of it Phase 1/2 clinical trial of SCIBI. The Phase 2 part of the trial is conducted in five United Kingdom centers in Nottingham, Manchester, Newcastle, Leeds, and Southampton. On August 15, 2012, the Company announced the development of a platform technology, Moditope.

Top 10 Growth Stocks To Invest In Right Now: Applied Nanotech Holdings Inc (APNT)

Applied Nanotech Holdings, Inc., incorporated on May 22, 1989, is engaged in nanotechnology research and development business. The Company's nanotechnology research involves performing contract research and development services for others to develop products and materials for new applications, and then leveraging this research by applying it to other similar applications in other industries. The Company also develops intellectual property (IP) around its products and technologies. The Company develops five technology platforms: nanosensor technology; nanocomposites, based on carbon nanotube composites; thermal management materials; nanoelectronics applications, and electron emission activities, primarily in the display area. The Company's electron emission IP is divided into display activities and non-display activities. Applied Nanotech Holdings, Inc. is the parent company. Applied Nanotech, Inc. (ANI) is a subsidiary of ANHI. During the year ended December 31, 2012, the Company formed EZDiagnostix, Inc., (EZDX).

Sensors

The Company develops sensors based on ion mobility sensor technology and differential mobility spectroscopy. The Company is involved in projects to develop Mercaptan and Methane sensors for uses in the natural gas industry. The Company is also applying this technology to other applications, including agricultural pathology, wound care, and breath analysis. The Company develops hydrogen sensor for use in the measurement of hydrogen in power transformer products. The Company develops carbon monoxide sensor that can last for 10,000 hours on a single battery. The Company's carbon nanotube technology is for use in biosensors. Sensors based on carbon nanotubes or other nanomaterials can be used to detect chemical, organic, or biological warfare agents, as well as explosives, hydrogen, ammonia and numerous other chemicals.

Nanocomposites

The Company is in the advanced stages of development of nanomaterials using carbon nanotube (CNT) and! other composites. Epoxies are used in industries with worldwide markets, with applications, including adhesives, paints, coatings, and composites. In addition to epoxy resins, the Company develops other types of resins, including polyesters and vinyl esters. Vinyl esters are used in a variety of industrial applications, including storage tanks, piping, and construction. The Company develops a process for coating nylon pellets with CNTs to improves electrical conductivity. Nylon 6 with improved electrical conductivity can be used for its anti-static qualities, electrostatic discharge, and electromagnetic/RF shielding.

Thermal Management

The Company markets thermal management material called CarbAl. CarbAl provides a passive thermal management solution for temperature control issues that plague electronics manufacturers. CarbAl is a carbon based metal nanocomposite comprised of 80% carbonaceous matrix and a dispersed metal component of 20% aluminum. The Company also develops a simplified version of CarbAl based on graphite.

Conductive Inks

The Company develops aluminum and silver inks and pastes that is ideal for use in the production of solar cells. The Company also develops aluminum paste that can be used in current solar cell production.

The Company competes with Zyvex Performance Materials, GSI Creos, Amroy Europe, Ltd., DuPont and Ferro

Advisors' Opinion:
  • [By Anuchit Nguyen]

    India�� S&P BSE Sensex rose, holding at a three-year high, amid better-than-estimated corporate earnings. Engineering company Larsen & Toubro Ltd. (LT) rallied to a three-month high and Asian Paints Ltd. (APNT) surged about 6 percent after reporting profit that beat forecasts.

Top Biotech Companies To Own In Right Now: Neoprobe Corporation(NEOP)

Neoprobe Corporation, a biomedical company, engages in the development and commercialization of precision diagnostics that enhance patient care and improve patient benefit. The company is developing and commercializing targeted agents aimed at the identification of occult (undetected) disease. Neoprobe?s two lead radiopharmaceutical agent platforms, Lymphoseek and RIGScan are intended to help surgeons better identify and treat certain types of cancer. Lymphoseek is a diagnostic imaging agent intended for radiolabeling and administration in radiodetection and visualization of the lymphatic system draining the region of injection for delineation of the lymphatic tissue; and RIGScan is an intraoperative biologic targeting agent consisting of a radiolabeled murine monoclonal antibody. The company has a biopharmaceutical development and supply agreement with Laureate Biopharmaceutical Services, Inc. to support the initial evaluation of the viability of the CC49 master working c ell bank, as well as the initial steps in re-validating the commercial production process for the biologic agent used in RIGScan CR. The company was founded in 1983 and is based in Dublin, Ohio.

Top Biotech Companies To Own In Right Now: InterMune Inc.(ITMN)

InterMune, Inc., a biopharmaceutical company, engages in the research, development, and commercialization of therapies in pulmonology and fibrotic diseases. In pulmonology, the company focuses on therapies for the treatment of idiopathic pulmonary fibrosis (IPF), a progressive and fatal lung disease. It markets pirfenidone, an orally active drug that inhibits the synthesis of TGF-beta under the Esbriet name in the European Union, as well as in a Phase III clinical trial in the United States. Pirfenidone is also approved for the treatment of IPF in Japan, where it is marketed by Shionogi & Co. Ltd. under the Pirespa trade name. The company?s research programs focus on the discovery of small-molecule therapeutics and biomarkers to treat and monitor serious pulmonary and fibrotic diseases. InterMune, Inc. was founded in 1998 and is headquartered in Brisbane, California.

Advisors' Opinion:
  • [By Rich Smith]

    On Thursday, the Securities and Exchange Commission charged a former vice president of finance, accounting officer, and controller of InterMune (NASDAQ: ITMN  ) with insider trading.

Top Biotech Companies To Own In Right Now: Algeta ASA (ALGETA)

Algeta ASA is a Norway-based biotechnology company engaged in the development of targeted cancer therapies based on its alpha-pharmaceutical platform. The Company�� principal product is Alpharadin for the treatment of bone metastases resulting from castration-resistant prostate cancer. The Company�� pipeline also includes Alpharadin for the treatment of bone metastases resulting from breast cancer, a combination of Alpharadin with Taxotere for the treatment of bone metastases resulting from prostate cancer and Thorium-227 showing various cancer indications. The Company develops Alpharadin in a development and marketing cooperation with Bayer Schering Pharma. Algeta ASA is active through the two wholly owned subsidiaries, Algeta Innovations AS and Algeta UK Limited. On April 12, 2012, the Company announced that it estabilished a subsidiary active in the United States, Algeta US.

Top Biotech Companies To Own In Right Now: Hemispherx Biopharma Inc (HEB)

Hemispherx Biopharma, Inc. (Hemispherx) is a specialty pharmaceutical company engaged in the clinical development of new drugs therapies based on natural immune system enhancing technologies for the treatment of viral and immune based chronic disorders. Hemispherx focuses on two core pharmaceutical technology platforms Ampligen and Alferon N Injection.The commercial focus for Ampligen includes application as a treatment for Chronic Fatigue Syndrome (CFS) and as an influenza vaccine enhancer (adjuvant) for both therapeutic and preventative vaccine development. Alferon N Injection is a United States Food and Drug Administration (FDA) approved product with an indication for refractory or recurring genital warts. Alferon LDO (Low Dose Oral) is a formulation under development targeting influenza. It has three subsidiaries BioPro Corp., BioAegean Corp., and Core BioTech Corp. The Company's foreign subsidiary is Hemispherx Biopharma Europe N.V./S.A.

Ampligen

Ampligen is an experimental drug, which is undergoing clinical development for the treatment of Myalgic Encephalomyelitis/Chronic Fatigue Syndrome (ME/CFS). Over 1,000 patients have participated in the Ampligen clinical trials representing the administration of more than 90,000 doses of this drug. The Company is also engaged in ongoing, experimental studies assessing the efficacy of Ampligen against influenza viruses.

Alferon N Injection

Alferon N Injection is the registered trademark for the Company's injectable formulation of natural alpha interferon. Interferons are a group of proteins produced and secreted by cells to combat diseases. The Company's natural alpha interferon is produced from human white blood cells. Alferon N Injection [Interferon alfa-n3 (human leukocyte derived)] is a highly purified, natural-source, glycosylated, multi-species alpha interferon product.

Alferon LDO (Low Dose Oral)

Alferon LDO [Low Dose Oral Interferon Alfa-n3 (Human Leukocyte Derived)]! is an experimental low-dose, oral liquid formulation of Natural Alpha Interferon and like Alferon N Injection should not cause antibody formation, which is a problem with recombinant interferon. It is an experimental immunotherapeutic that works by stimulating an immune cascade response in the cells of the mouth and throat, enabling it to bolster systemic immune response through the entire body by absorption through the oral mucosa.

The Company competes with Pfizer, GlaxoSmithKline, Merck, AstraZeneca, Baxter International, Fletcher/CSI, AVANT Immunotherapeutics, AVI BioPharma and Genta.

Top Biotech Companies To Own In Right Now: Cannabis Science Inc (CBIS)

Cannabis Science, Inc., incorporated on May 4, 2007, is a development-stage company. The Company is engaged in the creation of cannabis-based medicines, both with and without psychoactive properties, to treats disease and the symptoms of disease, as well as for general health maintenance. On February 9, 2012, the Company acquired GGECO University, Inc. (GGECO). On March 21, 2012, the Company acquired Cannabis Consulting Inc. (CCI Group).

The Company is engaged in medical marijuana research and development. The Company works with world authorities on phytocannabinoid science targeting critical illnesses, and adheres to scientific methodologies to develop, produce, and commercialize phytocannabinoid-based pharmaceutical products.

Advisors' Opinion:
  • [By John Udovich]

    Small cap marijuana stocks Medical Marijuana Inc (OTCMKTS: MJNA), Cannabis Science Inc (OTCMKTS: CBIS), Medbox Inc (OTCMKTS: MDBX), Growlife Inc (OTCBB: PHOT) and HEMP, Inc (OTCMKTS: HEMP) were all surging by double digits yesterday thanks in part to legal sales of pot beginning in Colorado.

  • [By John Udovich]

    Although its summer, there has been a steady stream of good news about medical marijuana even though important small cap marijuana stocks�Medical Marijuana Inc (OTCMKTS: MJNA) and Cannabis Science Inc (OTCMKTS: CBIS) have been fairly quietly lately while Growlife Inc (OTCBB: PHOT), a more indirect play on the spread of legalized marijuana, has produced�some news for investors:

Monday, January 6, 2014

Why Dole Food Shares Popped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Dole Food  (NYSE: DOLE  ) were looking sweeter today, gaining as much as 22% after CEO David Murdock offered to pay $12 a share for the remaining 60% of the company that he doesn't already own.

So what: The offer from the 90-year-old Murdock sent shares well above the $12 threshold as they closed at $12.46, indicating that some investors expect Murdock will have to raise the bid for the buyout to go through. Murdock's CEO position and 40% ownership of the company make it likely that some kind of deal will be reached. Murdock formerly ran the company CEO from 1985 to 2007, when it was a private enterprise, took it public as chairman in 2009, and returned to the executive chair in February when former CEO David DeLorenzo left to run a division in Asia that was sold off to Itochu.  

Now what: The buyout offer certainly makes Dole seem more attractive, but it's hard to see how Murdock would extract greater value from the company. Before today's announcement, Dole shares had dropped more than a third from its September peak following the sale to Itochu, and recent earnings reports have not instilled confidence. Revenue growth is essentially flat, as it's part of the stagnant produce industry, and profits have been slim. Given that, Murdock's offer looks like a good exit opportunity for current shareholders.

Top 10 Bank Stocks To Buy Right Now

Want more on Dole Food? Just add the company to your Watchlist here.  

Sunday, January 5, 2014

What Does the Future Hold for GameStop?

By almost any measure, GameStop (NYSE: GME  ) is a difficult nut to crack. The company has been fighting obsolescence ever since digital distribution caught on, and news swirling around next-generation consoles seems to turn against the retailer every other day. On the other hand, GameStop reports having a 47% market share of the new games market for Xbox and PlayStation, and it's built a symbiotic relationship with game and hardware makers.

Earnings from the last quarter were disappointing -- which isn't exactly a new theme -- but also pointed to a catalog of strengths that the company still sits on. Here's a look through the release, and a look at what could be coming next for GameStop.

The first quarter at GameStop
Let's look at the bad news first. GameStop's comparable sales fell 6.7%, bringing total sales down 6.8% to $1.9 billion. New game sales dropped 3.8%, pre-owned games were down 7.8%, and hardware was down 30.6%. All of those falls are a result of two factors -- the end of a console generation and the rise of digital sales.

On the plus side, GameStop's new-game sales drop compared to an industry average decline of more than 14%. The company also managed to get more out of its meager sales, and gross margin increased by 1 percentage point. That increase was at least partially due to the company's jump in digital and mobile sales, which grew 47% and 290% respectively -- and no, that's not a typo.

What does the next generation mean for GameStop?
GameStop's results summarize the market pretty well -- people are buying more casual and digital games, while holding out on new and used games for the arrival of a new series of consoles. That next wave comes in the form of the Sony (NYSE: SNE  ) PlayStation 4 and the Microsoft (NASDAQ: MSFT  ) Xbox One.

New game sales for the new consoles won't throw anyone a curveball, and GameStop should be in a good place to capitalize on those sales. What's concerning to investors is the future of used games. Both Sony and Microsoft have said that used games will be playable on the next-gen consoles, but that doesn't answer all the questions.

One of the answered questions is that neither new system will be capable of backward compatibility. That's bad news for GameStop, as a backward-compatible system would likely have generated sales of used hardware, but now gamers are much less likely to ditch their old boxes.

The bigger question surrounds how used games will work. Right now, Microsoft has offered the most information, and that's not much. The issue is whether gamers will have to pay an extra fee to install a used game. Right now, it looks like the answer is no -- but that's subject to change.

Microsoft has clouded the issue by not spelling out exactly how it's going to work, but saying that if you and a friend both install a game from one disc, then there will be a fee for the friend to pay. That's been extrapolated into a fee that a person purchasing your used game would have to pay, but that seems not to be the case. That's good for GameStop, as an additional fee could either cut into the company's profit or deter buyers from purchasing used games.

The future
GameStop is by no means sitting pretty, but I think the company has a bright future ahead of it. The whole gaming industry is a network, and investors can't overlook the fact that GameStop accounts for 13% of Electronic Arts sales and 10% of Activision Blizzard sales. Game makers and hardware providers have a vested interest in keeping GameStop's doors open, and used games are a big part of that. I think GameStop is going to surprise a lot of people when this time next year rolls around.

Play on
While Activision and Microsoft have been taking the headlines when it comes to console gaming, investors following the gaming sector would do well to also keep tabs on Electronic Arts. We can help. The Motley Fool's special report breaks down the risks and opportunities facing the company to help you decide if EA is right for your portfolio. Click here to get your copy now.