Full Disclosure: I took a position in EXTR at $2.91 in December, 2009.
At the time I took my initial position in Extreme Networks, I was looking at this company as a buyout target. Hewlett Packard had recently acquired 3Com and after a dismal Q1, Bob Corey had been named interim CEO. Bob Corey has been associated with several companies that went on to be aquired and had recently taken a modest position in the company.
The woes that had plagued the company were partly the result of problems with their suppliers and as such, appeared to be an obstacle that was fairly easy to rectify . The bigger challenge for EXTR was to turn the corner on profitability through growth and not just cost-cutting. It appears that CEO Corey and EXTR are moving in the right direction.
Today EXTR reported meeting their revenue projections and beat the Q4 EPS projection by $.02 on a non-GAAP basis (.06 vs. .04). More importantly, guidance for the coming quarter is for top line revenue to increase nearly 7% sequentially and about 3% Qtr. over Qtr.
While this hardly represents gang-buster growth, it justifies the recent run-up in the stock price; providing some cover while waiting for a speculative buyout. I feel EXTR is fairly priced around $3.75 price per share.
April 27th, 2010
Dusa Pharmaceuticals has made a good run since Chairman of the Board Jay Haft purchased 10,000 shares at $1.71 on March 5th. This on the heels of some other insider buying back in December, 2009.
I first spotted DUSA (and took an initial position) when it was trading at $1.53 in December of this year. It closed on April 23rd at $2.67.
So has the opportunity with DUSA gotten away from investors? Not if DUSA is able to overcome the one hurdle between it and significant growth: increasing the rate at which dermatologists are adopting their treatment of actinic keratoses (AKs), a precancerous skin lesion caused by sun exposure.
If DUSA’s photodynamic therapy can gain traction and become the preferred form a treatment, there’s no telling where this stock can go. They have only 24 M shares outstanding and a strong balance sheet, so dilution of shareholder value should be limited.
DUSA’s solution to treating AKs requires the use of their pharmaceutical product (Levulan) combined with their BLU-U hardware which emits the appropriate light wave required to trigger the benefits of Levulan. While Levulan sales increased 20% this past fiscal year, the more important number to watch is the sales of the BLU-U device, as this is a better indicator of future sales. Last year, BLU-U unit sales increased 10%.
DUSA expects to be profitable for the first time in the Q1 of 2010.
Bottom line: This is a small cap stock with room to run if they can convince the medical profession to abandon a long-held treatment regimen.
April 24th, 2010
The Blog of Evermore is simply my outlet for talking about those things I find of interest. While there is no predefined subject matter, you will find many of the posts relate to politics, philosophy musings on the world, and the stock market.
I hope you find the site of interest; however, it is important for me to state the following:
The information and opinions on this site are not meant to serve as financial advice. I am not a financial adviser. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. This site is merely intended to provide what I hope is interesting information and opinions.
As for other subject matter, I will strive to keep commentary on a professional level and will keep away from disrespecting those with whom I may disagree. I hope and expect that anyone who chooses to reply will do the same. I of course, reserve the right to remove any content that I find objectionable.
Thank you and enjoy…Tim Holmes
April 18th, 2010
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