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SunEdison (NYSE:SUNE) Signs Power Purchase Agreement with Stockton East Water District

By
Carol Harper
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SUNE

SunEdison Inc (NYSE:SUNE), a renewable energy company, disclosed that it struck an agreement for a solar power purchase with Stockton East Water District in California. The company intends to install 2.2 megawatts of high-performance solar panels on the district’s property. As a result, the company indicated that the district has the potential to save over $9.5 million on energy costs. However, that would spread over the next two decades. The district is also projected to save 20 million gallons of water every year.

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Enough Energy to Offset Electricity Costs

SunEdison said that its solar systems would generate sufficient energy to generate 50% of the electricity that was used at the facility. The amount of saved electricity has the potential to power 650 homes in California for a year. The system also lowers emissions of over 50 million pounds of carbon dioxide over a two decade period. That is equal to taking approximately 5,000 cars off the roads.

The company said that it plans to complete the system in the current year. SunEdison clarified that its operation and maintenance would be managed by them as well. So far, the company was able to install solar power in over 1,000 locations throughout the United States. As a result, it was able to save 20 billion gallons of water.

Stockton East Water District’s GM Scot Moody, said that the district would benefit from the solar energy without any additional costs. However, savings will start from day one. He said that it was a good example of how the district was looking at fresh initiatives to save money and resources.

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Logitech (NASDAQ:LOGI) Unveils New Conference Room System, Challenging Microsoft (MSFT)

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The battle for control of the conference room is heating up fast. Logitech International (NASDAQ:LOGI) made the latest move with what it calls GROUP, an advanced conference room system that accommodates up to 20 participants. The debut should be closely watched by its competitors. Microsoft Corporation (NASDAQ:MSFT) and Cisco Systems, Inc. (NASDAQ:CSCO) are some of the other major names vying for market share in online collaboration and virtual conferencing market.

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Logitech’s GROUP takes over from the previously heavy-worded ConferenceCam CC3000e, which is an endpoint HD video conferencing system for rooms with up to 10 people. GROUP not only accommodates more people in a room for video conferencing, but also boasts a number of advancements over that.

The standard configuration for GROUP is 14 people, but with additional accessories, the video conferencing system can used in a meeting room with up to 20 people.

Logitech’s new system features multiple advances. One of them is greatly improved sound quality. The system also boasts omnidirectional microphones that come with built-in echo and noise cancellation. That means that meeting participants can speak with one another easily within a 6-meter radius. The radius can be stretched to eight meters with additional microphones.

Competition

Logitech may want to rely on the advances in its GROUP system to expand its share in the video conferencing market. The competition in the market is fierce and Logitech will have to fight hard. Cisco’s Jabber and Microsoft’s Skype for Business are some of the major competitors also vying for a larger slice of virtual meeting room spending.

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Baird Reiterates Neutral Rating For Mobile Mini (NASDAQ:MINI)

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Mobile Mini Inc (NASDAQ:MINI) has had its lacklustre neutral rating reiterated by Baird Equity Research analysts in their latest comment on the stock. Although the company recently posted largely positive Q4 2015 results, the analysts note that issues such as reduced free cash flow and high leverage still keep them on the sideline.

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Q4 earnings beat expectations

Mobile Mini’s adjusted Q4 EPS of $0.41 topped consensus expectations of $0.39. That was driven in part by better than expected improvement in adjusted EBITDA, which rose 106bps YoY to 40.9%. Mini reported revenue of $134.4 million for the quarter, which was up 9% from the same quarter last year.

Baird’s assessment of Mobile’s earnings report shows that volume gains in the company’s portable storage business provided much of the lift in the quarter.

Current outlook

Mini’s management expects the gains noted in Q4 to continue in the current quarter and year. As such, the company is guiding for mid-to-high single-digit top-line growth in 2016. Higher pricing and unit growth are some of the factors expected to drive gains in the current year.

Investor apathy

Part of the reason Baird is cautiously optimistic despite its neutral rating on Mobile Mini is that it sees widespread investor apathy in the stock, which leaves room for future buying. The investor apathy seems to have roots in Mobile’s energy exposure. However, investors appear to overlook the strong execution that the management of Mobile has demonstrated in recent times. Together these factors make Baird believe that the stock is compelling for investors who can look beyond the energy and construction concerns.

Baird has adjusted its estimates for Mobile Mini. For 2016, the firm has shifted its revenue estimate to $535 million from $541 million. The consensus calls for revenue of $555 million in the year. Despite a cut in the 2016 revenue estimate, Baird has boosted its EPS estimate for the year to $1.52 from $1.45. That compares with the consensus estimate of $1.57.

As for 2017, Baird is looking for revenue of $558 million and EPS of $1.78 from Mobile Mini. The consensus estimate for 2017 calls for revenue of $599 million and EPS of $1.87.

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Multiple Account Switching Feature Arrives On Facebook Inc (NASDAQ:FB)’s Instagram

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Instagram will now permit users to switch between accounts when on either Apple Inc. (NASDAQ:AAPL)’s iOS or Alphabet Inc (NASDAQ:GOOGL) Google’s Android. In a blog post on Monday, Facebook Inc (NASDAQ:FB) owned Instagram said that the feature would be present in version 7.15 of the app. Currently, super-grammars can manage up to five accounts simultaneously.

To use this enhanced feature, just go to the profile settings and tap the option to add an additional account. After that the user just has to tap the username at the top of his/her profile to switch between accounts. Once all the accounts are set up, Instagram will let the user know which one he/she is posting with.

Recently Instagram acknowledged that it had been testing out this functionality that was introduced to Facebook earlier. Instagram has been pushing more into the advertising world. It makes sense for Social Media Managers representing organizations to switch back and forth from personal and corporate accounts or even switch between multiple corporate accounts.

A number of reports last week said that Instagram was experimenting the account-switching feature with many iOS users permitting them to switch accounts in a couple of taps instead of going through the tedious procedure of logging in and out of each one.

The much sought after function was also tested on Android toward the end of 2015 although an APK download was needed to make it work. No such plugin is required for the iOS version.

Users with multiple accounts added will see their profile photo appears in locations throughout the app so they can always make out which account they are using at the moment.

This new feature will ultimately save time and eliminate hassle for anyone having more than one Instagram account. Users can download the latest version of Instagram at app stores.

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Here’s Why KemPharm Tanked on Monday

By
Jennifer Aldershot
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On February 4, 2015, KemPharm, Inc. (NASDAQ:KMPH) announced a senior convertible note issue. It’s a $75 million issue, with a 5.5% rate. Since the announcement, the company is down close to 23%, having lost 20% across a single session on Monday. A capital raise such as this suggests a company is in a high growth phase, and a such, at first glance the bearish action seems counterintuitive. In reality, however, it’s a standard response to this type of finance raise. Here’s why.

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First, and necessary to aid understanding of this phenomenon, we’ve got to look at the company itself. KemPharm is a development stage biotech company. It currently generates no revenues (at least, none of note) and holds a pipeline of candidates in pain management, ADHD and a host of CNS disorders including schizophrenia, bipolar disorder and major depressive disorder.

The company’s lead candidate – and the one that carry’s the majority of KemPharm’s market capitalization on its shoulders – is called KP201/APAP. It’s a formulation of hydrocodone and acetaminophen, designed to be abuse deterrent. Opioid abuse is a huge problem in the US, and a host of companies are working on proprietary technologies to tackle the issue. KemPharm’s tech works by attaching what’s called a ligand (another word for a binding molecule) that stops the drug from working until it enters the GI tract of a patient. This means it can’t be crushed, dissolved etc., making it (theoretically) abuse deterrent. The company put forward an NDA to the FDA in December, but as yet, the agency has not accepted the submission. This isn’t necessarily a sign that anything is wrong – the FDA is notorious for taking its time with NDA approval – and we expect to hear some feedback from either the company or the agency this quarter.

So, let’s get to the decline. As we’ve said, KemPharm just announced a senior convertible note issue that will see it raise $75 million, with an estimated $71.2 million expected in net proceeds at closing. There’s a further $11.25 million up for grabs if initial purchasers exercise an option to pick up additional notes, but let’s focus on the more conservative number for the purposes of this discussion. Just shy of $19 million is earmarked to clear a debt of the company’s books – $15 million plus interest to the Deerfield Private Design Fund III, L.P.

The rest is earmarked for operational costs, the commercialization of KP201/APAP – assuming it reaches commercialization on an FDA nod – and the advancing of a couple of secondary candidates in the indications we’ve already mentioned. All in all, a pretty standard financing round. Why, then, are markets selling off on the company?

Well, convertible note issue is a way that high growth company’s often take advantage of their current momentum to raise capital. Tesla Motors, Inc. (NASDAQ:TSLA) has done it a few times. As has Netflix, Inc. (NASDAQ:NFLX). A company sells a promise to issue shares at a particular price on a future date, and picks up capital at a low interest rate in return. The low rate is the upside. The downside is dilution. At various points between now and 2021, KemPharm will have to issue shares, purchased as part of this offering, for $14.83 a share. These shares will dilute the holdings of current investors. Say, for example, an investor owns a 2% stake, and KemPharm issues a load of new shares. This issue won’t impact how many shares they own, but it will impact how much of the company, as a percentage, the shares represent. An individual likely won’t mind too much if the company gains a lot of strength on the back of the capital raise, but it’s a sort of catch 22. The higher the company’s shares rise on the open market, the bigger a discount to the future market price the notes issue represents. KemPharm is picking up circa $70 million now from the issue of x number of shares, with the incentive being a low interest rate (it might have to pay up to 12% with a more traditional debt raise. However, if its price rises by a multiple of four over the next five years, or more even, it could easily turn out to have been cheaper to pay a higher rate and not have to issue shares at a large discount to market rate in the future.

Investors in a company like KemPharm take a position on the assumption that the company will grow exponentially across the next five to ten years – that’s the nature of clinical stage biotech speculation. The higher the growth, the bigger the dilution, and the higher the likelihood that KemPharm is getting a good deal now at the expense of what might turn out to be a better deal in the future. This sentiment is what has driven the decline, and is what will likely add further pressure to the company’s market capitalization going forward.

Of course, when (if) the FDA accepts the pain prodrug NDA, sentiment could reverse sharply. If it does, markets might overlook the dilution – at least temporarily. For now, however, disgruntled shareholders look to be in control.

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U.S. Markets May Open Gingerly After IEA Report

By
Andy Parker
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The U.S. stock markets might trade with caution today as the momentum across the global markets remained negative. Moreover, the stock futures are pointing to bearish sentiment while retreating from triple-digit losses during the early session with Nasdaq and S&P 500 Futures showing a decline of 0.50% to 3,944.75 and 1,842.75 respectively.

U.S. market summary

The indices were deep in the red yesterday after Dow Jones Industrial Average and S&P 500 Index lost 1.10% and 1.42% to 16,027.05 and 1,853 respectively.

Meanwhile, the global markets witnessed some major developments throughout the day, where oil update from the International Energy Agency (IEA) guided the direction of the European markets. The Agency has reiterated in its report that the oil glut is not likely to resolve until the end of this year. The agency projected oil supplies to surpass the demand by 1.75 million barrels per day as opposed to the estimate of 1.5 million per day surpluses predicted last month.

Though troublesome, the report did not disrupt the rally in oil, which marched above the $33 zone. The upward momentum in oil is believed to have come from weakening dollar that dropped steeply against the major currencies today, particularly the Japanese yen.

Major updates

Monday rout in markets prompted investors to rush for accumulating safe-haven assets such as the Japanese yen. The wild interest in yen brought the dollar to a 15-month low against the former to a level near 114.23. The reflection of fear became clearer as Japan’s Nikkei 225 experienced a sell-off to the tune of 5.40% to 16,085.44.

In Europe, major indices were mostly jittery after a 6-day sell off. The gap between the exports and imports in Britain hit a record high, which also added to the concerns. The German industrial output too inched down by 1.2% in December, fuelling worries about the recovery of the euro zone’s significant economy. Market participants continue to be anxious about the credit ratings and bond repayment abilities of the banks around the world.

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Nervousness Prevails In Global Markets as Japan Crashes over 5%

By
Andy Parker
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Asian stock markets traded heavily down as concerns over the health of European banks kept markets nervous across the globe. Investors rushed to safe haven assets, which sent yields on Japanese bonds to below zero for the first time while the yen soared to a 15-month high.

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Asian indices in red

Japan’s Nikkei 225 nosedived by as much as 5.40% to 16,085 while Australia’s ASX fell 2.78% to 4,882.60. Mumbai Sensex was seen trading nearly 1% down at 24,061 as most of the Asian markets including China remained closed on account of the Lunar New Year. The weakness in Asian markets may be stemming from Europe, where there are mounting concerns over the health of European banks.

Deutsche Bank’s (NYSE:DB) comments yesterday disrupted market movement as the bank said that it has sufficient reserves to honour bond payments until the end of this year. Negative interest rates in Japan, and extremely low rates in Europe and the U.S. have given rise to fears that bank margins will face the brunt, affecting credit quality. Major European indices are mixed today with Euronext 100 down by 0.05% to 803, Dax lower by 0.27% to 8,955 and the Swiss Market Index reporting a loss of 0.32% at 7,734. FTSE 100 by contrast was up by 0.48% to 5,717 and CAC 40 added up 0.03% to 4,067 during the late Asian hours.

Euro crisis

Meanwhile, lacklustre industrial production in Germany has also impacted market sentiment today. The region’s industrial output fell by 1.2% in December, which was opposite expectations of 0.4% growth. A report from the International Energy Agency (IEA) is also uninspiring as it said that there is no hint of recovery in oil prices as supplies are set to pile up even more.

It remains to be seen how U.S. markets will react to the new developments as they traded in the negative territory a day earlier. The Dow Jones Industrial Average fell by 1.10% to 16,027.05 while the S&P 500 erased as much as 1.42% to 1,853.44 after a late day recovery.

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U.S. Dollar Slips Against Yen, Swiss Franc While Euro Banks Questioned

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The U.S dollar was down heavily against the Japanese Yen today, reverberating the shift of market sentiment towards safe assets. The greenback fell by more than 0.53% against the yen to 115.23 as it breached its lowest levels in the last year. The weakness in the dollar is seen as a response to gloomy global economic data coupled with a negative sentiment prevalent in the markets over the last two days.

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Yen gains strength

The USD/JPY pair touched lows of 114.23, last seen in November 2014 before climbing back up. The yen gained strength after Japan’s Nikkei shed close to 5.5% during today’s trade, generating worries about what the Bank of Japan can possibly do next following an announced negative interest rate policy.

The dollar remained weak against a range of currencies including Swiss franc, also considered a safe haven in risky times. The USD/CHF pair was steeply lower by 0.33% to 0.9838 after it hit a two-month low at 0.9824. The Aussie dollar, however, was down. Tepid business confidence in Australia had sent the the AUD steeply lower by 0.65% to 0.7042 against the US dollar.

Health of European Banks Questioned

While the euro traded flat agains the dollar at 1.1193, there are ongoing concerns in the Eurozone for the health of major European banks, most notably Deutsche Bank (NYSE:DB) and Credit Suisse Group (NYSE:CS). Such fears pushed investors to unload their financial stocks a day earlier and helped keep European and U.S. markets in negative territory yesterday.

According to data released today, German industrial output in December declined 1.2%, which came as a rude shock to the markets. The data has further aggravated the concerns about the economy, which closed 2015 on a negative note. The data forced the euro lower against the yen, falling by as much as 0.54% to 128.98.

Elsewhere, the British pound remained resilient against the dollar. GBP/USD pair added more than 0.10% to 1.4446 on Tuesday. The U.S. Dollar index is mostly unchanged this morning after falling sharply yesterday.

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BioCryst Pharmaceuticals’s (NASDAQ:BCRX) Study On Genetic Disorder Fails

By
Carol Harper
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BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX)

BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX) disclosed the results of its study on OPuS-2, i.e. Oral ProphylaxiS-2. This was a clinical study of avoralstat, administered three times per day as a liquid-filled soft gel for the treatment of prophylactic or genetic disorders. Its CEO, Jon Stonehouse, said that the results showed that the study can not move forward resulting in shares plummeting more than 60% in pre market trading.

Patients Administered Dosage

BioCryst Pharmaceuticals said that it administered a 300 mg or 500 mg dose of avoralstat, during the study period of 12 weeks. The study did not provide any lower rate of edema or swelling attacks compared with those patients who were given a placebo. The drug was meant to treat hereditary angioedema, which was a rare but potential genetic disease. The disease effects one person out of 10,000 – 50,000 people.

The company stated that the disease caused frequent swelling bouts in different parts of the body. That included hands, genitalia, and face. The drug firm indicated that patient’s abdominal walls could also have the potential to swell thus leading to nausea, as well as, vomiting. There are no oral drugs for this disease. However there are injections that are currently on the market.

Primary Goal

BioCryst Pharmaceuticals said that its primary objective was to characterize the avoralstat efficacy in bringing down the angioedema attacks so that the safety and tolerability can be evaluated. Its CEO said that OPuS-2 was well-designated, as well as, executed during the trial period. However, he said that the results were a big disappointment as the company understood the need for better exposure to succeed.

BioCryst Pharmaceuticals’ CEO said that it expects bioavailability trial results, which is testing a novel solid dosage type of avoralstat, by the middle of the current year. The company was expecting its trial to achieve much higher exposures on two dosages per day. The alternative to increased exposure was an oral kallikrein inhibitor for which the company expects results by the end of the year.

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Gold Threatens to Break Resistance as Miners Soar 51% in Three Weeks

By
Rafi Farber
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Gold Bull

Did we just see the final bottom in gold on December 4, 2015? The next $45 for gold may give us the final answer as long term resistance is at $1,225. We are currently just above $1,180. In that sense the next few weeks will be crucial for calling an end to one of the worst bear markets for gold stocks in modern times. A break above $1,200 would give gold its first higher high since topping way back in September 2011.

Gold stocks for their part have already made higher highs for the first time in four years. The closely followed NYSE ARCA Gold Bugs Index (INDEXNYSEGIS:HUI) looks set to break through the 150 level for the first time since July 2015 when it collapsed through that support zone. Gold itself (NYSEARCA:GLD) is up nearly $25 this morning, breaking through the $1,180 zone, only about $12 away from the next key resistance level at $1,192.

The Market Vectors Gold Miners ETF (NYSEARCA:GDX) has also broken through its October 2015 highs at $17 a share with the next significant resistance zone at $17.85 from back in July. The ETF is already up 40% in three weeks, though there is a long way to go before it meaningfully retraces 4 years of catastrophic declines. In other words, this could still be a head fake, though it would be a very vicious one indeed for gold bugs.

Gold seems to be feeding off of weakness in stocks lately. While the metal has been climbing since bottoming in early December at $1,045, the SPDR S&P 500 ETF (NYSEARCA:SPY) has declined almost 12% over the same timeframe, with futures heavily down this morning once again. Gold is also rising today independently of a stronger dollar. The dollar index (NYSEARCA:UUP), which measures the reserve currency against a basket of other major global currencies, is up 0.33% this morning, a moderate up move for the greenback, and still gold is strongly up on the Comex.

If gold sustains its move higher throughout the day, this would be its 7th straight day of gains, capping a 6.3% move up in one week. If the bottom is really in this time, the ensuing bull market is set to be quite strong, as the current bear market has erased 80% of the value of the larger established gold miners since 2011 and nearly 90% of the junior exploration companies.

A new bull market would mean, for example, that the Market Vectors Junior Gold Miners ETF (NYSEARCA:GDXJ) has at least 680% to go before topping again. The next few weeks should help determine if this is what is indeed in store for one of the market’s most devastated sectors in the past four years.

Disclosure: The author was long gold stocks and SPY at the time of writing. 

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