Monica Gray

Monica has an undergraduate degree in Accounting and an MBA she earned - with Honors. She has six years of experience in the financial markets and has been an analyst for the past two years.

What Should You Look For In Exelixis, Inc. (NASDAQ:EXEL)’s 4Q Earnings?

Exelixis, Inc. (NASDAQ:EXEL)

Exelixis, Inc. (NASDAQ:EXEL) is scheduled to release its Q4 2016 results on February 27 and Wall Street has already lined up its expectations for the quarter. The stakes seem to be high for the company given its mixed track record of earnings performance over the last several quarters.

Analysts on the average are expecting Exelixis to post EPS loss of $0.01 on revenue of $64.9 million in 4Q16. Exelixis reported EPS loss of $0.04 on revenue of $62.2 million in the last quarter, topping the consensus that called for EPS loss of $0.13 on revenue of $42.9 million. Exelixis’ earnings have topped expectations three times in the last four quarters.

While investors will be looking to see if Exelixis beats expectations in Q4 2016, significant attention will likely be on the company’s drug called Cabometyx (cabozantinib). The product has a potential to transform Exelixis’ financial performance.

Cabometyx is approved in the US and the EU as a treatment for a certain cancer indication in certain patient classes. Exelixis, Inc. (NASDAQ:EXEL) has also inked several strategic deals involving development and commercialization of Cabometyx. The company is working to extend the drug’s treatment label so that it can generate even more revenue from it.

Regulatory approvals

The FDA approved Cabometyx as a treatment for advanced RCC (renal cell carcinoma) for patients who have undergone prior treatment with different therapy. The drug is approved in the EU for a similar condition in the same class of patients.

Exelixis, Inc. (NASDAQ:EXEL) has been working to expand the drug’s treatment mandate, and it plans to submit supplemental applications for regulatory review that could end with Cabometyx being recommended for a first line treatment for advanced RCC patients.

Exelixis sees huge opportunity for its compound cabozantinib, which it believes could treat several other types of cancers beyond the ones it has been approved to tackle. As such, the company is collaborating with a number of leading pharmaceutical companies to develop and commercialize the compound.

Strategic partners

Exelixis’ partners in developing and commercializing cabozantinib include Merck & Co., Inc. (NYSE:MRK), Bristol-Myers Squibb Co (NYSE:BMY), Takeda Pharmaceutical Co Ltd (ADR) (OTCMKTS:TKPYY), DAIICHI SANKYO COM NPV (OTCMKTS:DSKYF) and Ipsen. If cabozantinib meets expectations as agreed by these partners, Exelixis would be in for milestone and royalty payments, giving a boost to its topline.

But for anything that goes through regulatory approval, nothing is guaranteed, which means that Exelixis could still miss the payments promised under the cabozantinib deals. In the case of Takeda, Exelixis gave the company exclusive rights to commercialize Cabometyx in Japan. In return, Exelixis is receiving $50 million in upfront payment and is also eligible to receive up to $95 million in milestone payments.

Stock movement

Shares of Exelixis, Inc. (NASDAQ:EXEL) retreated more than 3.9% to $21.73 in the last session. However, the stock is up more than 45% year-to-date and more than 430% over the last one year.

2/23/2017
Ticker Symbol EXEL
Last Price a/o, 4:02PM EST  $                       21.74
Average Volume (mlns) 5.42
Market Cap (blns)  $               6.10
Sales (mlns) $123.80
Shares Outstanding (mlns) 280.63
Share Float (mlns) 260.59
Shortable Yes
Optionable Yes
Inside Ownership 0.80%
Short Float 6.06%
Short Interest Ratio 2.91
Quarterly Return 26.62%
YTD Return 45.81%
Year Return 461.76%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Monica Gray has an undergraduate degree in Accounting and an MBA – earned with Honors. She has six years of experience in the financial markets and has been a securities analyst for the past two years.

What If The Government Loosened Its Grip On Federal National Mortgage Association Fannie Mae (OTCMKTS:FNMA)?

Federal National Mortgage Association Fannie Mae (OTCMKTS:FNMA)

Federal National Mortgage Association Fannie Mae (OTCMKTS:FNMA), also known as Fannie Mae, and Federal Home Loan Mortgage Corp (OTCMKTS:FMCC), also known as Freddie Mac, have been under the control of the government since 2008 when they were bailed out. What that means is that shareholders in the mortgage companies do not see a profit. Instead, the companies funnel all their profits to the US Treasury, and that has been a subject of serious legal dispute between shareholders and government on opposing sides.

Fannie and Freddie are turning nearly $10 billion in dividends to the government in March from their profits in the December quarter, or 4Q16. Fannie posted a $5 billion profit in the quarter and said it will send $5.5 billion to the Treasury, while Freddie generated $4.8 billion in profit in the quarter and said it will funnel $4.5 billion in dividends to the government.

If the government didn’t have a tight grip on these mortgage giants, shareholders would have benefited from these hefty dividend payouts. Instead, the best shareholders can come to enjoy Fannie and Freddie’s success is to profit from appreciation in their stocks as has happened every time they reported strong earnings results.

Fannie gives Treasury $160 billion

Federal National Mortgage Assctn Fnni Me (OTCMKTS:FNMA) posted net income of $12.3 billion in 2016, bringing its positive net worth at the end of the year to $6.1 billion. In the first nine months of 2016, Fannie paid $9.6 billion in dividends to the government. Combining the newly declared dividend of $5.5 billion to be released in March, the company has sent a total of $160 billion to the government since it returned on its feet after being bailed out in 2008.

Strengthening the business

The management of Fannie has recently focused on strengthening the company’s business model, especially reducing risk to taxpayers. Similar efforts are being made at Freddie.

As such, the mortgage giants reported lower serious delinquency rates at the end of 4Q16. For Federal National Mortgage Association Fannie Mae (OTCMKTS:FNMA), single-family delinquency rate dropped to 1.2%, while Freddie reported delinquency rate of 1%. Nationwide single-family delinquency was 2.96% in 3Q16, according to the Mortgage Bankers Association data. The association’s 4Q16 data isn’t out.

Fannie and Freddie’s upbeat 4Q16 and 2016 results showing improving fundamentals in the housing market.

Stock movements

While shareholders may be sitting out of profits from Fannie, strong performance by the company coupled by hopes that investors may someday find a way to share in future profits could continue to lift the stock.

Shares of Federal National Mortgage Association Fannie Mae (OTCMKTS:FNMA), have risen more than 117% year-to-date and are up more than 110% over the last 12 months. Shares of Freddie, on the other hand, are up more than 100% for both year-to-date and the last 12 months.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Monica Gray has an undergraduate degree in Accounting and an MBA – earned with Honors. She has six years of experience in the financial markets and has been a securities analyst for the past two years.

Can Sport Endurance Inc (OTCMKTS:SENZ) Fix Its Cash Shortage Problem?

Sport Endurance Inc (OTCMKTS:SENZ)

Sport Endurance Inc (OTCMKTS:SENZ) has a cash problem. When the company reports 4Q16 results on March 9, the quality of its balance sheet will come under sharp focus of investors for signs of what might be lying ahead for the dietary supplements company.

In its last quarterly report, Sport Endurance generated revenue of $230, and posted a net loss $200,563, wider than $18,686 net loss in year earlier. The company closed the quarter with cash and equivalents of $964, down from $10,197 in the prior quarter. Total assets shrank to $16,176 from $16,640 in the prior, while liabilities ballooned to $791,062, from $590,963.

The quarter left the company with more than 1.5 million in accumulated net losses and working capital shortfall of $774,886. With liabilities exceeding assets and Sport Endurance Inc (OTCMKTS:SENZ) facing a working capital shortage, the management sounded the alarm over the company’s ability to continue as a going concern.

Management express hope

However, the management expressed hope that options still exist to keep the company in operations, or at least, enter a deal that would maximize shareholder value. Among the options the management is pursuing is seeking business ventures that would increase the revenue that the company generates and provide cash flow to run the operations.

Additionally, the management is seeking deals that would yield cash injection to fund operations. However, the management still cautioned that there was assurance that a deal to save the company would materialize.

Debt Financing

In seeking additional capital to plug the working capital deficit and meet other operational needs, Sport Endurance Inc (OTCMKTS:SENZ) can try several options. One of the options is to issue new debt. However, the problem with seeking debt financing is that Sport Endurance’s already highly leveraged balance sheet could turn off prospective lenders or force the company to accept debt financing at a higher interest rate.

The company’s interest expense at the end of the last quarter was $183,705, rising sharply from $2,253 a year earlier.

Equity financing

If debt financing proves difficult, Sport Endurance Inc (OTCMKTS:SENZ) could sell new shares to the public or selected investors. In that cash, the company would get a financial shot in the arm without risking driving up its interest expenses. However, equity issuance also carries a problem as it would dilute value for existing shareholders. For investors with a long-term outlook, that would be a lesser concern compared to debt that would chain Sport Endurance to expensive repayments.

The other option for Sport Endurance Inc (OTCMKTS:SENZ) to cope with its cash problem is cost-cutting so that it saves money to invest in growth. In a move reminiscent of cost pruning, shareholders voted to restructure the company’s board of directors so that the board was left with only one director.

However, there is no guarantee Sport Endurance Inc (OTCMKTS:SENZ) would succeed if it pursues any or all of these survival options.

Shares of Sport Endurance Inc (OTCMKTS:SENZ) rose 1.7% to 1.80 in the last session. The stock is down 8.6% year-to-date, and it is up more than 250% over the last one year.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Monica Gray has an undergraduate degree in Accounting and an MBA – earned with Honors. She has six years of experience in the financial markets and has been a securities analyst for the past two years.

Why CombiMatrix Corp (NASDAQ:CBMX) Shone in 4Q16

CombiMatrix Corp (NASDAQ:CBMX)

CombiMatrix Corp (NASDAQ:CBMX) released its 4Q16 and full-year 2016 results on Wednesday 22, posting improvements in revenues and earnings. The company also dropped a hint on how it intends to execute in 2017 and the years to come.

Increase in test volumes, customer gains and higher average test prices yielded massive gains for CombiMatrix in both 4Q16 and 2016, the management disclosed.

“I’m proud to report a strong finish to 2016 with substantial improvements in key financial and operating metrics as we continue to make progress toward our stated goal of sustained profitability,” commented CombiMatrix’s CEO Mark McDonough.

What happened in 4Q16?

CombiMatrix Corp (NASDAQ:CBMX) grew its total revenue in 4Q16 by 32% year-over-year to $3.5 million. The gain was supported by an 8% increase in test volume to 2,770 tests in the quarter.  Customer gains also drove the company’s topline as the number of billable customers increased 10% to 261.

Continued efficiency drive also bore fruits for the company during the latest quarter. CombiMatrix Corp (NASDAQ:CBMX) reported gross margin of 58.4% from 46.5% in the comparable quarter a year earlier.  Those cost control efforts yielded EPS of $0.22 in the latest quarter, sharply up from EPS loss of $2.02 a year earlier.

How about full-year 2016?

Revenue of $12.9 million for the year increased 28% over the prior year’s figure.

CBMX’s cost control measures didn’t pay off as the company managed to shrink its EPS loss to $3.27, a steep decline from $9.22 in the previous year. The company finished the year with cash and equivalents of $3.7 million, down slightly from $3.9 million in the prior year.

What next for CombiMatrix?

The management of CombiMatrix Corp (NASDAQ:CBMX) has sounded optimistic as it expects the company to continue growing in 2017. According to CEO McDonough, this year they will seek to capitalize on the favorable market conditions. The management also believes the company can capitalize on its market leadership to generate more value for shareholders in 2017 and beyond.

Why CombiMatrix may not get what it wants

However, tough competition in the reproductive health diagnostics market could force CombiMatrix Corp (NASDAQ:CBMX) to spend more on innovation to differentiate its products, leading to a hit on profits. Additionally, tough competition could lead to the company spend more on marketing to promote its products and undo the competition.

CombiMatrix Corp (NASDAQ:CBMX) is wresting for diagnostic spending against Laboratory Corp. of America Holdings (NYSE:LH), Quest Diagnostics Inc (NYSE:DGX) and NeoGenomics, Inc. (NASDAQ:NEO).

Shares of CombiMatrix Corp (NASDAQ:CBMX) are up more than 52% so far this year, but they are down about 25% since a year ago.

2/22/2017
Ticker Symbol SINO
Last Price a/o, 4:02PM EST  $                       4.10
Average Volume 292,180
Market Cap (mlns)  $                  10.29
Sales (mlns) $12.00
Shares Outstanding (mlns) 2.51
Share Float (mlns) 2.19
Shortable Yes
Optionable No
Inside Ownership 2.00%
Short Float 12.15%
Short Interest Ratio 0.91
Quarterly Return 51.85%
YTD Return 54.72%
Year Return -1.91%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Monica Gray has an undergraduate degree in Accounting and an MBA – earned with Honors. She has six years of experience in the financial markets and has been a securities analyst for the past two years.

Merrimack Pharmaceuticals Inc (NASDAQ:MACK)

What Next For Peregrine Pharmaceuticals (NASDAQ:PPHM) After Proof of Concept?

Peregrine Pharmaceuticals (NASDAQ:PPHM)

Peregrine Pharmaceuticals (NASDAQ:PPHM) announced earlier this month that the proof of concept study of its exosome-based cancer diagnostic platform turned up positive results. The company licensed the technology from a unit of University of Texas (UT) called Southwestern Medical Center, which also helped with conducting the study.

Primary cancer cells emit exosomes that contain phosphatidylserine (PS). The technology that Peregrine has developed is able to detect the presence and measure the level of PS in a patient’s blood.

In the proof of concept study, PPHM’s exosomes-based diagnostic platform was used to test samples from 34 patients with ovarian tumor. The study involved a control arm of 10 healthy subjects. The trial was conducted in a blinded format. The outcome of the study showed that patients with ovarian cancer had significantly higher levels of PS in their blood compared to the healthy subjects, suggesting that PPHM’s technology could provide a simpler way to detect cancer and its progress in patients.

“This type of diagnostic technology is particularly important in an area such as ovarian cancer, in which screening options are limited and the ability to detect the disease at an early stage is inadequate. We look forward to continuing to explore the potential of the technology platform in ovarian as well as other types of cancer,” said Peregrine Pharmaceuticals (NASDAQ:PPHM) CEO Steven W. King.

What comes next?

With the positive proof of concept data, Peregrine Pharmaceuticals (NASDAQ:PPHM) has said that its sight is on developing the technology into an optimized diagnostic platform for clinical testing of cancer. To reach that goal, Peregrine said it is seeking strategic partners to help it develop and commercialize the platform.

Those partners would be expected to inject money into the project for an equity stake in Peregrine Pharmaceuticals (NASDAQ:PPHM) or a cut of revenue from the sale of the platform. There are several large pharmaceutical companies developing their own ovarian cancer diagnostic systems are in need of such technology, so PPHM could pitch to them to join its exosomes-based diagnostic efforts.

Potential partners

AstraZeneca plc (ADR)(NYSE:AZN), Tesaro Inc(NASDAQ:TSRO) and Clovis Oncology Inc(NASDAQ:CLVS) are some of the major pharma brands that could be a fit for PPHM. The pharma giants are at various stages in the development of their ovarian cancer assets.

Cash injection from strategic partners will reduce the risk for Peregrine Pharmaceuticals (NASDAQ:PPHM) in developing its exosomes-based cancer diagnostic system.

Stock movement

Shares of Peregrine Pharmaceuticals (NASDAQ:PPHM) have gained more than 55% so far this year, but are down about 52% since 12 months ago. The stock dipped 13% to $0.479 in the last session.

2/21/2017
Ticker Symbol PPHM
Last Price a/o, 4:02PM EST  $                        0.48
Average Volume (mlns)                    2.86
Market Cap (mlns)  $                   117.51
Sales (mlns) $54.50
Shares Outstanding (mlns) 244.82
Share Float (mlns) 229.47
Shortable Yes
Optionable Yes
Inside Ownership 0.20%
Short Float 0.46%
Short Interest Ratio 0.37
Quarterly Return 54.84%
YTD Return 54.84%
Year Return -54.72%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Monica Gray has an undergraduate degree in Accounting and an MBA – earned with Honors. She has six years of experience in the financial markets and has been a securities analyst for the past two years.

Can Canadian Solar Inc. (NASDAQ:CSIQ) Do Better in 2017?

Canadian Solar Inc. (NASDAQ:CSIQ)

Canadian Solar Inc. (NASDAQ:CSIQ), like many other solar companies, had a tough year in 2016.  Can 2017 be better?

Canadian Solar is due to report its 4Q16 earnings on March 9, which might provide clues about how 2017 could turn out to be for the company. In 2016, the company struggled with tepid demand for solar panels because of a shortage of incentives to solar buyers from governments. Additionally, oversupply of panels led prices lower, making it difficult for panel manufacturers to meet their growth projections.

As a result, Canadian Solar Inc. (NASDAQ:CSIQ) posted downbeat earnings for 3Q16, its most recent quarterly report. Revenue of $657.3 million came short of consensus estimate by $28 million. Furthermore, the revenue declined 23% from a year earlier. Soft demand for panels and weak pricing environment contributed to the revenue shortfall.

That led Canadian Solar Inc. (NASDAQ:CSIQ) to report EPS of $0.27, barely in-line with the consensus estimate.

The troubles in the solar industry in 2016 were also responsible for the nearly 60% drop Canadian Solar’s share price in the year. However, in what signals a positive start to 2017, shares of Canadian Solar Inc. (NASDAQ:CSIQ) are already up more than 25% so far this year. The stock rose nearly 9% to $15.36 in the last session.

Hope for a better 2017

The gains in the stock seem to stem from investors growing more optimistic that 2017 will be a better year for Canadian Solar Inc. (NASDAQ:CSIQ). Part of the reason for optimism comes from expectations that Canadian Solar will find good market for the various projects it has earmarked for sale.

Instead of creating a yieldco, Canadian Solar said it would monetize about $2 billion worth of project assets. It has sold several projects already, including recent sale of three utility-scale solar farms to a unit of Fengate Real Asset Investments. The transaction involving the three solar farms was valued at more than $195 million. Canadian Solar said gains from the transaction will be reflected in its 1Q17 results.

But Canadian Solar Inc. (NASDAQ:CSIQ) has more assets to monetize. About $1.2 billion worth of project assets remain to be sold.

The sale of the assets will yield cash that Canadian Solar can funnel to more growth in 2017 or distribute to shareholders. The cash injection from assets monetization would also ease pressure on Canadian Solar in case recovery in solar industry remains slow in 2017.

Industry growth

Though 2016 was a tough year for solar companies, solar power industry is expected to continue growing thanks to regulatory requirements around greenhouse emissions. Falling panel prices is also expected to encourage uptake of solar power system, leading to more demand for Canadian Solar Inc. (NASDAQ:CSIQ) products and projects.

Canadian Solar Inc. (NASDAQ:CSIQ) has several projects in the pipeline.

2/21/2017
Ticker Symbol CSIQ
Last Price a/o, 4:02PM EST  $                       15.36
Average Volume (mlns)                    1.27
Market Cap (mlns)  $                  837.89
Sales (mlns) $3.30
Shares Outstanding (mlns) 54.55
Share Float (mlns) 45.25
Shortable Yes
Optionable Yes
Inside Ownership 31.00%
Short Float 12.31%
Short Interest Ratio 4.4
Quarterly Return 31.51%
YTD Return 26.11%
Year Return -26.86%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Monica Gray has an undergraduate degree in Accounting and an MBA – earned with Honors. She has six years of experience in the financial markets and has been a securities analyst for the past two years.

Will Mad Catz Interactive, Inc. (NYSE:MCZ) Sell Itself?

A special committee set up by the board of Mad Catz Interactive, Inc.(NYSE:MCZ) is evaluating strategic options aimed at enhancing shareholder value. The options being explored by the committee include the sale of the entire company.

The strategic review began last year and resulted in Mad Catz selling its Saitek product line to Logitech International SA (NASDAQ:LOGI) for $13 million. Despite the cash injection from the sale of Saitek business, Mad Catz has continued to struggle with working capital shortage and other challenges.

While the strategic review could lead to Mad Catz selling its other assets to unlock funds to revive its fading fortunes, the falling stock price could pave the way to the company selling itself entirely. That is because the downbeat stock price could encourage potential buyers, especially competitors looking to shore up their position, to place bids for the company to grab it at a discount valuation.

Steep stock decline

Shares of Mad Catz Interactive, Inc. (NYSE:MCZ) have retreated more than 46% since the beginning of this year, and are down more than 65% over the last 12 months.

No guarantee of a deal

Mad Catz has retained financial advisors to help it explore strategic alternatives. However, the management said on the fiscal Q3 2017 earnings call that a specific strategic transaction has not been determined and such a decision would be reached after the evaluation of strategic options is concluded. There is no guarantee that the strategic review would result in a transaction.

Focus remains on strengthening the business

Although Mad Catz Interactive, Inc. (NYSE:MCZ) is exploring strategic options to maximize value for shareholders, the management in the meantime is focused on strengthening the business as it stands. Efforts are being made to improve the company’s working capital to avoid problems of product release and shipment delays. The last quarter, the management said working capital shortage led to Mad Catz incurring higher costs in air freight to get products to customers on the promised dates. That led to Mad Catz scooping a loss in the quarter.

Downbeat quarterly results

Mad Catz reported Q3 2017 revenue of $19.1 million, down 71% year-over-year. By region, Mad Catz registered the steepest revenue decline of 75% in the Americas. EMEA and APAC sales fell 63% and 23%, respectively.

The weak sales coupled with a 6.8% decline in gross margin took a serious hit on Mad Catz’s bottom line. The company reported EPS loss of $0.05, sharply down from EPS profit of $0.02 in the year ago quarter.

Fruits of restructuring

Despite Mad Catz Interactive, Inc. (NYSE:MCZ)’s Q3 2017 results being generally weak, the quarter also showed that the company’s restructuring efforts are bearing fruits. Expenses related to sales, R&D and administration declined 52% from the prior year, with the management linking the development to the success of cost pruning.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

2/17/2017
Ticker Symbol MCZ
Last Price a/o, 4:02PM EST  $                       0.08
Average Volume 718,950
Market Cap (mlns)  $                   7.30
Sales (mlns) $61.90
Shares Outstanding (mlns) 93.59
Share Float (mlns) 73.06
Shortable Yes
Optionable No
Inside Ownership 3.23%
Short Float 0.24%
Short Interest Ratio 0.24
Quarterly Return -61.00%
YTD Return -44.29%
Year Return -66.09%

Can Gold Resource Corporation (NYSE:GORO) Cash In On Global Economic Uncertainty?

Gold Resource Corporation (NYSE:GORO) recently updated the public on the expansion of its Arista Mine in Mexico. The company said it expanded the mine’s Switchback vein system through additional step-out drill intercepts. Gold Resource added that the additional step-out extended the mine’s total strike length to more than 575 meters. That signals a 275 meters expansion since January 1.

“We are thrilled to add another 75 meters on strike of high-grade veins at our Switchback vein system,” Gold Resource’s CEO Jason Reid commented on the development.

Boosting mine output

The expansion of Arista Mine is part of the efforts to boost output at the mine. Gold Resource Corporation (NYSE:GORO)  is a producer of gold and silver.

Gold, considered a safe haven asset by traders, gains when markets are gripped by uncertainty. Prices of the yellow metal have risen more than 7% since the beginning of the year. Some analysts have pointed out that uncertainty over Donald Trump’s presidency could buoy gold. The president’s controversial policies such as a travel ban that targeted citizens of certain Muslim countries and anti-Globalism sentiments could give way to global economic uncertainty that allows gold to thrive. In that case, Gold Resource would benefit from increased demand for gold at a higher price.

However, strong demand for gold in an uncertain economic environment could also encourage other gold producers to step up their production, potentially leading to a supply glut that could destroy prices.

Staying out of controversies

As such, for Gold Resource, gaining from a gold rally would largely depend on how the company keeps down its costs while ramping up production and stays out of controversies.

The company has recently reported mine accidents that are under investigations by the company itself and the authorities in Mexico. Gold Resource could be slapped with fines if investigations reveal that failure to comply with certain workplace regulatory requires led to the accidents.

In a move aimed at increasing Gold Resource’s capacity the company, in January, announced completing acquisition of 100% of East Camp Douglas Property for $2 million.

Shareholder returns

Gold Resource Corporation (NYSE:GORO) recently updated that it has returned $109 million to its shareholders through monthly dividends since it began commercial production in July 2010. Shareholders of Gold Resource are given the option to take their dividends in the form of gold and silver instead of cash.

Earnings above expectations

Gold Resource Corporation (NYSE:GORO) reported Q3 2016 EPS of $0.03, sharply up from EPS loss of $0.01 a year earlier. Revenue of $21.4 million in the most recent quarter rose from $19.4 million in the prior year.

Shares of Gold Resource have risen more than 36% year-to-date, and are up more than 240% since the last 12 months.

 

2/17/2017
Ticker Symbol GORO
Last Price a/o, 4:02PM EST  $                        5.92
Average Volume (mlns) 1.01
Market Cap (mlns)  $                   342.83
Sales (mlns) $86.60
Shares Outstanding (mlns) 57.91
Share Float (mlns) 54.55
Shortable Yes
Optionable Yes
Inside Ownership 2.00%
Short Float 2.66%
Short Interest Ratio 1.43
Quarterly Return 32.29%
YTD Return 36.19%
Year Return 242.97%

Can Coeur Mining Inc (NYSE:CDE) Meet Its Production Targets for 2017?

Coeur Mining Inc (NYSE:CDE) has set its sight on producing 16.4 to 18 million ounces of silver in 2017. The company produced 14.8 million ounces of silver in 2016, and 15.9 million ounces of the metal in 2015.

For gold, the company targets production between 362,000 and 387,000 ounces of gold in 2017. That would be up from 358,170 ounces of gold produced in 2016.

Cash shortage could complicate the picture

However, Coeur Mining Inc (NYSE:CDE)’s 2017 production targets are threatened by cash shortage risk. The company concluded 2016 with cash and equivalents of $162.2 million, down from more than $200 million in the prior year. Debt at the end of the year was $210.9 million.

However, the debt decreased sharply from a year ago when the company’s balance sheet reflected more than $490 million of long-term debt. If the company uses the existing cash to repay its debt, the remaining net debt would be $48.7 million. At that level, net debt-to-EBITDA ratio works out to 2.

While the debt load may be threatening, the ratio suggests lenders would still be willing to advance loans to the company to fund operations if a need for such funding arises.

As such, Coeur Mining Inc (NYSE:CDE) still has room to meet its production targets for 2017 even if organic cash flow isn’t adequate to fund projects or expand them.

Annual and quarterly performance

Coeur Mining Inc (NYSE:CDE) posted 4Q16 adjusted EPS of $0.01, down 96% from the prior quarter, but up 103.2% year-over-year. However, the EPS still came short of the consensus estimate of $0.11.

Falling prices of silver and gold impacted the topline and led the company to the EPS decline and miss in 4Q16. The price of silver per ounce fell 8.8%, while the price of gold declined 12.4% per troy ounce.

Revenue of $159.2 million for the quarter retreated 10% from the prior quarter. Sales of silver accounted for 33% of the company’s revenue, while sales of gold contributed 67% of revenue. The company’s silver production was 3.9 million ounces in 4Q16, while gold production was 102,500 troy ounces.

For the year, adjusted EPS was $0.29 cents, falling 136.3% from a year earlier despite revenue of $665.8 million for the year growing 3% from the prior year.

Stock movements

Shares of Coeur Mining Inc (NYSE:CDE) have declined less than 3% so far in 2017, and are up nearly 150% over the last 12 months.

2/17/2017
Ticker Symbol CDE
Last Price a/o, 4:02PM EST  $                         8.88
Average Volume (mlns) 4.15
Market Cap (blns)  $                   1.65
Sales (mlns) $665.80
Shares Outstanding (mlns) 186.15
Share Float (mlns) 178.72
Shortable Yes
Optionable Yes
Inside Ownership 1.20%
Short Float 2.50%
Short Interest Ratio 1.08
Quarterly Return -7.21%
YTD Return -2.31%
Year Return

149.44%

Can NETEASE INC (ADR) (NASDAQ:NTES) Sustain Its Growth Momentum?

NetEase Inc (ADR) (NASDAQ:NTES) Q4 2016 results exceeded Wall Street expectations for the quarter. Revenue of 12.1 billion yuan ($1.74 billion) rose more than 53% over a similar quarter a year earlier. The online games publisher reported adjusted net income of 4 billion yuan ($570 million), leading to adjusted EPS of $4.30. The EPS rose sharply from $2.56 in the comparable quarter a year earlier.

Analysts on the average were expecting NetEase to report revenue of $1.58 billion and EPS of $3.44.

What supported the growth?

The management attributed the starling quarterly performance to strong execution focused on innovation.

“In 2016, we brought best-in-class products and services to our community and continued to grow our business. As we move through 2017 we will look toward the future, designing products and services that address fluid market dynamics, enabling continued growth and value creation,” said CEO William Ding.

The stop pops following the strong results

Shares of NetEase Inc (ADR) (NASDAQ:NTES) popped more than 14% to $298.73 in the last session following the robust quarterly performance. The stock has gained more than 38% since the beginning of the year, and is up more than 115% since a year ago. Shares of NetEase have oscillated between a low of $130.82 and high of $299.68 over the last one year.

In 2017, investors are looking to see if NetEase can increase or, at least, maintain its growth momentum.

Chinese venture with Google

As part of the efforts to drive future growth, media reports, including by South China Morning Post and The Information, have suggested that NetEase has been in discussion with Google for a joint venture in China. Google is the largest division within the Alphabet Inc (NASDAQ:GOOGL) holding company. Its siblings include autonomous driving technology developer Waymo and cable internet unit Google Fiber.

The NetEase Inc (ADR) (NASDAQ:NTES) Google talks are reportedly about bringing Google Play to China. Such a move would help NetEase reach more international customers with its products by making the games available on Google Play app store. Google Pay is available on Android, which is the world’s most popular mobile operating system.

A return to China

Google pulled its products from mainland China in 2010 in protest over the country’s censorship of internet content. But the company has recently shown that it is willing to return to China, according to South China Morning Post. A partnership with NetEase Inc (ADR) (NASDAQ:NTES) on Google Play could bring Google closer to re-entering China.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

2/16/2017
Ticker Symbol NTES
Last Price a/o, 4:02PM EST  $                      298.73
Average Volume 956,180
Market Cap (blns)  $                  39.63
Sales (blns) $4.95
Shares Outstanding (mlns) 132.67
Share Float (mlns) 129.84
Shortable Yes
Optionable Yes
Inside Ownership 45.00%
Short Float 1.09%
Short Interest Ratio 1.48
Quarterly Return 31.40%
YTD Return 38.72%
Year Return 99.34%

“I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.”