The Micro Cap Opportunity
Proven Strategies for the Astute Micro Cap & Nano Cap Stock Speculator
04/23/2008
The MCO Daily - Before the Bell for Thursday, April 24, 2008
The Micro Cap Opportunity 'Daily'On the Radar: DPHIQ, CNHC, CSBR, CCHNE, SYNM, MSPD
This morning's top Micro Cap trading ideas include, Delphi Corp. (OTCPK: DPHIQ), China Health Management Corp. (OTCPK: CNHC), Champions Biotechnology, Inc. (OTCBB: CSBR), Clear Choice Helath Plans, Inc. (OTCBB: CCHNE), Syntroleum Corp. (NASD: SYNM), Mindspeed Technologies, Inc. (NASD: MSPD).
DELPHI CORP.. (OTCPK: DPHIQ)
Up 27.66% Yesterday
Detailed Quote: http://finance.yahoo.com/q?s=DPHIQ.PK
Delphi's powertrain technologies provide robust solutions to complex challenges, helping its customers develop vehicles that offer outstanding performance, refinement and emissions. They include multi-point injection and direct injection gasoline systems, common rail and rotary pump diesel systems in a range of capacities and, for heavy duty diesel applications, Electronic Unit Injectors and Electronic Unit Pumps. They are complemented by innovative fuel handling, evaporative emissions, transmission control, valve train, and aftertreatment solutions.
Recent DPHIQ News:
April 23, 2008 - Delphi Powertrain Showcasing Fuel Economy and Emissions Solutions at Vienna Motor Symposium
During this week's 29th International Vienna Motor Symposium held here at the Hofburg Congress Center, Delphi's (PINKSHEETS: DPHIQ) Powertrain Systems division will display a number of technologies that address the question of how to meet stringent emissions standards while improving fuel efficiency and performance. In addition, Delphi engineers will present a paper on exceeding customer expectations with the direct acting diesel fuel injection system.
Attendees visiting Delphi's exhibit will have the opportunity to experience:
-- Diesel Engine Management System (EMS) Technology -- Delphi Multec� Diesel Common Rail (CR) System
-- Diesel Direct Acting Piezo CR System
-- Gasoline EMS Technology: -- Gasoline Direct Injection (GDi)
-- Variable Valve Actuation (VVA)
-- Transmission Management System -- Fuel Handling and Evaporative Management Systems On Thursday (April 24), Delphi's Detlev Schoeppe, Engineering director for Delphi Diesel Systems (DDS), will lecture on the Delphi paper: "Exceeding Customer Expectations with the Innovative Direct Acting Diesel Fuel Injection System: Unique Advantages of a Breakthrough Technology." Along with Schoeppe, the paper's co-authors include:
-- Martin Hardy - DDS department manager (Gillingham, England) -- Stefan Zuelch - DDS chief engineer (Gillingham, England) -- Derk Geurts - DDS chief engineer (Bascharage, Luxembourg) An excerpt from the paper: "With the Direct Acting Common Rail System, Delphi is bringing to production an innovative concept in Diesel Fuel Injection technology. In [this] system, the injector needle is set in motion directly by a piezo ceramic actuator, rather than being moved via an electro-hydraulic circuit as with the existing fuel injection technologies. ...We will show how it completes the current Delphi Diesel product portfolio enabling Delphi to exceed customer expectations."
The Vienna Motor Symposium promises to present the latest results in worldwide engine and powertrain development, future legislation, new engines, fuels and powertrain, components, drive-train electrification, hybrid technology, CO2 reduction, and exhaust emission control. More information is available at www.xn--vk-eka.at/index_en.htm.
CHINA HEALTH MANAGEMENT CORP. (OTCPK: CNHC)
Up 27.08% Yesterday
Detailed Quote: http://finance.yahoo.com/q?s=CNHC.PK
China Health Management Corp. is a healthcare management company focused on Operations and Management of hospitals in China. The company's first target is to become the leader in the high-end healthcare and medical services industry in Kunming city, Yunnan Province, China.
Recent CNHC News:
April 23, 2008 - China Health Management Signs Joint Venture Partnership
China Health Management Corp. (PINK SHEETS: CNHC) is pleased to announce that it has signed a joint venture partnership with Cable Print Network Media (CPMN) / Internet Marketing Consortium (IMC).
CPNM / IMC is currently one of the nations largest multimedia marketing companies which translates to over 1.25 Billion hits per month. President of CPNM / IMC, Beryl Wolk, has developed hundred's of joint ventures and or marketing strategies for companies over the past 30 years. Most notable are The Cable Guide, which merged with TV Guide, The Preview Channel, Discovery Channel, QVC, Resource One, CartCade, the largest Kiosk Company in the world (5000 kiosks/Carts in 500 malls), Family Guide (1st newspaper insert) Dail-A-Fax (1,500,000 company members) and he is classified as the "Worlds Greatest Marketing Genius".
Beryl was the first to use newspapers for the distribution of direct response marketing in a magazine format. Clients include 175 national corporations, with complete marketing programs based on the distribution of his "Targeted Free Fall" magazine-styled newspaper inserts, incentives and involvement devices. Billions of Wolk's Family Guide newspaper inserts have been published for Ford, Chrysler, GM, McDonalds, Burger King and Franklin Mint. He is the largest provider of sweepstakes in the USA and founded 55 clubs with 24 million members.
Mr. Wolks conceived the 45-minute infomercial in 1977, and then founded the first company to produce them. Since that time, this company has broadened its original marketing thrust of "merchandise" to include business opportunities, self-improvement, and breakthrough product marketing. The company has produced over 1,600 infomercials.
Marketing for the IFPA, the Association of Weekly Newspapers in America is another of Beryl's projects. The IFPA services 40 million readers weekly and operates a predictive dialing company with the capability of 5 million calls per day.
Mr. Wolk has created, developed, and maintained 109 consortia of various themes, from the Ultimate Music Consortium to the Ultimate Motion Picture Consortium to the Ultimate E-Marketing Consortium and is now the Ultimate Kuwaiti, Korean, Arab, India, etc. consortia.
Mr. Wolk has implemented over 900 Joint Ventures for marketing and media. He now has 800 radio stations, 100 million television households, and 79 magazines and 12,000 newspapers on a P.I. (Per Inquiry) basis.
Mr. Wolk enduring experience and enthusiasm keep him in the forefront of Media / Marketing with his focus on Humanitarian Causes (Better World).
"This will broaden the exposure for China Health Management and its Richland International Hospital, and with Mr. Wolks marketing experience we have no doubt that people traveling to China and people abroad will know about the Richland International Hospital and the world class health services it provides," says Dr. Xu Mei, CEO of China Health Management and Chairman of Richland International Hospital.
CHAMPIONS BIOTECHNOLOGY, INC. (OTCBB: CSBR)
Up 27.27% Yesterday
Detailed Quote: http://finance.yahoo.com/q?s=CSBR.OB
Champions Biotechnology, Inc. is engaged in the development of advanced preclinical platforms and predictive tumor specific data to enhance and accelerate the value of oncology drugs. Our Preclinical Platform is a novel approach based upon the implantation of primary human tumors in immune deficient mice followed by propagation of the resulting xenografts (Biomerk Tumorgrafts(TM)) in a manner that preserves the biological characteristics of the original human tumor. The Company believes that these Tumorgrafts closely reflect human cancer biology and their response to drugs is more predictive of clinical outcomes in cancer patients.
We leverage our preclinical platform to evaluate drug candidates and to develop a portfolio of novel therapeutic candidates through pre-clinical trials. As drugs progress through this early stage of development, the Company plans to sell, partner or license them to pharmaceutical and/or biotechnology companies, as appropriate. The Company also offers its predictive preclinical platform and tumor specific data to physicians for personalized patient care. In the course of this process, this permits us to evaluate oncology drugs for companies by using models that integrate prognostic testing with biomarker discovery.
Champions Biotechnology is dedicated to enhancing preclinical development tools, accelerating development and valuation of oncology drugs, and advancing personalized treatment with a goal to improve the lives of cancer patients globally.
Recent CSBR News:
April 23, 2008 - Champions Biotechnology, Inc. Completes $2,500,000 Private Financing at $1.75 per Share
Champions Biotechnology, Inc. (OTC Bulletin Board: CSBR), a company engaged in the development of advanced preclinical platforms and tumor specific data to enhance the value of oncology drugs, announced today the completion of a $2,500,000 private financing. Under the terms of the private investment, Champions Biotechnology issued 1,428,572 restricted shares of the Company's common stock at $1.75 per share. There were no fees or other expenses related to the funding.
"Dr. David Sidransky, Champions Biotechnology's Chairman, has established a compelling vision and a high potential business. We are very pleased to have successfully completed this early strategic financing on favorable terms" said Doug Burkett, Ph.D., President of Champions Biotechnology, Inc. "In addition to the cash reserve that we have generated from operations this fiscal year, this investment is expected to enable us to accelerate the development of the Company's preclinical platform, advance the development of our chemotherapeutic drug candidate and accelerate growth of our Personalized Oncology and Preclinical EValuation businesses."
After the investment, Champions Biotechnology has a total of 33,247,717 issued and outstanding common shares. For more information regarding Champions Biotechnology's growing business and recent news, please visit www.championsbiotechnology.com .
CLEAR CHOICE HEALTH PLANS, INC. (OTCBB: CCHNE)
Up 46.43% Yesterday
Detailed Quote: http://finance.yahoo.com/q?s=CCHNE.OB
Clear Choice offers affordable health plans to meet the needs of employers, providers and consumers. The company provides health insurance, including Medicare Advantage plans, commercial plans, individual plans and administrative services to individuals and businesses throughout the region. The company also offers life, disability, dental, vision and voluntary benefits programs. Clear Choice is dedicated to the development of community-based health insurance plans. For information call 888-677-5852, visit www.clearchoicehp.com.
Recent CCHNE News:
April 23, 2008 - Clear Choice Health Plans Reports Financial Results for 2007 Fourth Quarter, Full Year; Announces Stock Repurchase Program
Clear Choice Health Plans, Inc. (OTCBB:CCHN) today reported financial results for the 2007 fourth quarter and year ended December 31, 2007.
The company also announced that its board of directors has authorized a stock repurchase program, authorizing management, at its discretion, to repurchase up to $5 million of the company's outstanding common stock from time to time over the next 12 months through open market or privately negotiated transactions. The amount and timing of specific repurchases are subject to market conditions, applicable legal requirements and other factors. The repurchase program may be modified, extended or terminated by the board of directors at any time, and there can be no assurance of the exact number of shares that will be repurchased under the program.
For the 2007 fourth quarter, the company incurred a net loss of $2.2 million or $1.19 per share, on revenue of $41.2 million. Clear Choice had a net loss of $222,000, equal to $.12 per share, on revenue of $44.1 million for the comparable quarter of 2006. The company posted a loss from operations of $6.0 million for the fourth quarter of 2007, versus a loss of $74,000 in the same quarter a year ago, primarily reflecting higher medical expenses, including an increase in utilization and the number of higher dollar claims.
For the year ended December 31, 2007, total revenue rose 7.4% to $180.8 million from $168.4 million recorded in 2006. Net income for 2007 was $2.2 million, or $1.17 per diluted share, compared with $6.5 million, or $3.63 per diluted share, for 2006. The company sustained a loss from operations for 2007 of $4.6 million, compared with income from operations of $8.5 million in 2006, principally attributable to sharply higher medical and administrative expenses and substantial investment in the company's infrastructure.
"Results for the year and fourth quarter were adversely impacted by a number of factors, most notably rising medical expenses, along with substantial investments made in the company's infrastructure to enhance operating efficiencies, support growth and accommodate the changing health care environment," said CEO and President Patricia Gibford. "As part of our long term strategy, we are expanding our administrative, claims processing and Medicare reporting capabilities, and have outsourced Medicaid claims administration. Our investment in infrastructure will continue in 2008, and once our infrastructure changes are fully in place, we believe greater operating efficiencies will be achieved, transparency will be markedly improved, and consumers will be better equipped with more information in making their personal health care decisions.
"Working closely with providers, we also aim to further enhance the transparency of quality, costs and the outcome of medical services. This process will require substantial financial investment and human resources, but ultimately should serve the company better through improved claims administration and business processes, best in class technology and some cost reduction through the elimination of 30 positions.
"As a company, our initiatives are based on the objectives of producing favorable outcomes for our patients, as well as attractive long-term returns for our shareholders," Gibford said. "Commitment to fundamental change takes time, courage and financial resources. Clear Choice's strong balance sheet and investment reserves, which have been growing since the company's inception, are the foundation to help us meet our goals.
"We believe that a stock repurchase program is an attractive use of our cash and underscores our belief in the long-term value of our stock, as well as our commitment to deliver shareholder value. The stock repurchase program demonstrates the board's and management's confidence in the future of our business and belief that at current trading levels, Clear Choice shares represent an attractive long-term investment for the company and its shareholders," Gibford added.
Total membership increased to 45,800 members as of December 31, 2007, a 4.3% increase from the same time last year. The increase in commercial lives led the growth, with a 16.6% increase in membership when compared with the prior year. Third party administrative lives decreased by 78, or 1.8%, from December 2006 to December 2007.
Review of Operations
Revenue decreased in the fourth quarter due to the retro-active disenrollment of approximately 230 of our Medicare members by the Center for Medicare and Medicaid Services (CMS), along with higher medical loss ratios and continued investment in infrastructure changes and personnel.
Due to confusion in the marketplace and certain regulatory changes, and without notice to the Company, 230 of our Medicare Advantage Plan members were subsequently enrolled in a duplicative stand-alone Part D drug plan of another carrier for the period of January 2006 to October 2007. As a result, CMS required the retroactive disenrollment of those members during the fourth quarter and recoupment of all premiums.
Medical expenses as a percent of net premium revenue rose to 101.3% for the fourth quarter of 2007 from 91.4% for the fourth quarter of 2006. For the year ended December 31 2007, the medical expense ratio was 91.2%, compared with 86.6% for the corresponding period of 2006.
Administrative expense represented 13.2% of total revenue in the fourth quarter of 2007, compared with 8.8% in the fourth quarter of 2006. Administrative expense in the fourth quarter of 2007 increased 40% to $5.4 million from $3.9 million in the same quarter of 2006. For the year ended December 31 2007, administrative expense was up 42% to $19.8 million from $14.0 million in 2006.
The company sustained a loss before taxes for the 2007 fourth quarter of 2007 of $4.0 million, versus a loss of $520,000 for the fourth quarter of 2006.
Balance Sheet Review
At December 31, 2007, total assets grew 2.3% to $91.3 million from $89.2 million a year ago. Stockholders' equity at the 2007 year-end advanced 5.4% to $51.4 million from $48.8 million at December 31, 2006. Cash and cash equivalents totaled $6.2 million at December 31, 2007, compared with $17.8 million at December 31, 2006. The decline in cash and cash equivalents is primarily related to the payment of provider withhold, as well as construction of the company's new 78,000 square-foot headquarters office building. As of December 31, 2007, the company had total debt of $6.1 million, primarily associated with its new building.
Property, plant and equipment increased approximately $11 million at December 31, 2007 compared with the end of the prior year, principally due to the continued construction of the company's new office building. Part of the cost of the building was paid from cash, with the balance from a $3.2 million construction loan. The 78,000 square foot, Gold LEED certified office building will be the main headquarters for Clear Choice Health Plans, and occupancy is scheduled for the second quarter of 2008.
SYNTROLEUMCORP.(NASD:SYNM) Up 19.59% Yesterday
Detailed Quote: http://finance.yahoo.com/q?s=SYNM
Syntroleum Corporation owns the Syntroleum(R) Process for Fischer-Tropsch (FT) conversion of synthesis gas derived from biomass, coal, natural gas and other carbon-based feedstocks into liquid hydrocarbons, the Synfining(R) Process for upgrading FT liquid hydrocarbons into middle distillate products such as synthetic diesel and jet fuels, and the Bio-Synfining(TM) technology for converting animal fat and vegetable oil feedstocks into middle distillate products such as renewable diesel and jet fuel. Together with Tyson Foods, Syntroleum is focused on siting, engineering and constructing a plant that produces clean renewable synthetic diesel and jet fuel using low grade fats and greases as feedstock. The 50/50 venture - known as Dynamic Fuels - was formed to construct and operate multiple renewable synthetic fuel facilities, with production on the first site beginning in 2010. The Company plans to use its portfolio of technologies to develop and participate in synthetic and renewable fuel projects. For additional information, visit the company's Web site at www.syntroleum.com.
Recent SYNM News:
April 23, 2008 - Syntroleum Announces Changes in Financing Arrangements
Syntroleum Corporation (NASDAQ: SYNM) today announced that Fletcher International, Ltd. has not made the initial $3 million investment contemplated by the $12 million Investment Agreement dated November 18, 2007. Although Syntroleum's shares are listed on the Nasdaq Capital Market, Fletcher's obligation to make the investment was conditioned upon Syntroleum's shares being listed on the Nasdaq Global Market. Approximately 2.2 million shares would have been issued to Fletcher at a price of $1.39 per share which is a 60% premium to the closing share price of $0.87 per share on Friday.
Since entering into the agreement with Fletcher, Syntroleum has made significant progress in augmenting its cash reserves. Syntroleum had previously forecasted in November 2007 a $4.2 million shortfall in cash to fund overheads through 2009. Now Syntroleum is forecasting to have approximately $12 million in cash at the end of 2009, a $16.2 million increase. This increase in cash position has come from:
Revised 2009 Cash Projection
$ (4.20) Previous Projected Cash Shortfall at End of 2009
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$ 2.25 Marathon Settlement at a Discount
$ 7.75 Payments from Sale of Interests in Oil and Gas Assets
$ 1.30 Sale of Company's Headquarters and Lab
$ 2.90 Projected Engineering/ Technical Services & Other Revenue
$ 2.00 Further Reductions in Operating Overhead
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$ 12.00 Projected Cash Balance at End of 2009
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This expected cash surplus funds substantially all of Syntroleum's remaining capital obligations for Dynamic Fuels, its 50/50 venture with Tyson Foods, assuming Dynamic Fuels' application for $135 million in Gulf Opportunity Zone (GO Zone) Bonds with the State of Louisiana is approved. The Go Zone bonds would be used to fund the building of Dynamic's plant in Geismar, LA which is expected to begin operations in early 2010. Assuming approval of the bonds, the remaining balance necessary to fund the plant would be approximately $25 million or $12.5 million from each partner, an amount that Syntroleum could nearly fulfill from cash reserves.
Funding Requirements for Dynamic Fuels $ (160.00) Total Plant Capital and Financing Costs
$ 135.00 GO Zone Bond Amount Applied For
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$ (25.00) Remaining Funding Requirement
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$ (12.50) SYNM Portion of Funding Requirements
$ 7.50 SYNM Cash Reserves Available for Funding
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$ (5.00) Remaining Funding Requirements based on Current Budget
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Gary Roth, CEO of Syntroleum, said, "We now can contribute approximately $7.5 million from internal funds to the Dynamic Fuels venture, which, combined with its application for up to $135 million of GO Zone bonds, could require only a small equity raise for Syntroleum's remaining share of the venture's first plant. Management is continuing to seek sources of additional revenue through engineering technical services and license fees and remains focused on additional cost reductions. If efforts are successful, an additional equity raise will not be necessary."
MINDSPEED TECHNOLOGIES, INC. (NASD: MSPD)
Up 5.45% Yesterday
Detailed Quote: http://finance.yahoo.com/q?s=MSPD
Mindspeed's products are used in a wide variety of network infrastructure equipment, including voice and media gateways, high-speed routers, switches, access multiplexers, cross-connect systems, add-drop multiplexers and digital loop carrier equipment.
Recent MSPD News:
April 23, 2008 - Mindspeed(R) Reports Fiscal 2008 Second Quarter Results
Mindspeed Technologies, Inc. (NASDAQ: MSPD), a leading supplier of semiconductor solutions for network infrastructure applications, today announced revenues of $36.2 million for the second quarter of fiscal 2008, which ended March 28, 2008, an increase of 3 percent compared to $35.3 million for the first quarter of fiscal 2008 and up 18 percent from the $30.8 million reported for the second quarter of fiscal 2007.
The company's non-GAAP gross margin was $24.6 million, or 68 percent of revenues, including a 1.6 percent benefit from the sale of certain patents that are no longer core to its business. Presented on a GAAP basis, gross margin was $24.4 million, or 67 percent of revenues.
The company's operating income on a non-GAAP basis was $600 thousand for the second fiscal quarter of 2008 compared to non-GAAP operating income of $2.0 million for the first fiscal quarter of 2008. Presented on a GAAP basis, the operating loss for the second fiscal quarter was $1.0 million compared to a loss of $300 thousand for the first fiscal quarter of 2008.
The company's net loss for the second quarter of fiscal 2008 on a non-GAAP basis was $300 thousand, or $0.00 per share, compared to non-GAAP net income of $1.5 million, or $0.01 per share, for the first fiscal quarter of 2008. Presented on a GAAP basis, the net loss was $1.8 million, or $0.02 per share, compared to a net loss of $800 thousand, or $0.01 per share, for the first fiscal quarter of 2008. Reconciliations of the non-GAAP measures to GAAP measures are included in the accompanying financial data.
Revenues from multiservice access voice-over-IP (VoIP) processor solutions increased 19 percent sequentially, contributing 33 percent of total second fiscal quarter 2008 revenues. Revenues from high-performance analog products decreased 4 percent sequentially, representing 28 percent of the total. Wide area networking communication product revenues decreased 4 percent sequentially, contributing the remaining 39 percent of second fiscal quarter 2008 revenues.
"I am proud of our continued solid performance in the second fiscal quarter of 2008," said Raouf Halim, Mindspeed's chief executive officer. "We delivered record quarterly revenues at the high end of our guidance range, as well as our fourth consecutive quarter of non-GAAP operating income and our second consecutive quarter of positive cash flow. Our sequential growth was driven by record quarterly revenues from our VoIP processors with multiple design wins supported over the past few years ramping to production, particularly for VoIP processing in fiber-to-the-premise network access deployments."
Outlook
Mindspeed expects fiscal 2008 third quarter revenues to be up 2 to 6 percent sequentially. The company expects third quarter non-GAAP gross margin to be approximately 68 percent and non-GAAP operating expenses to be approximately flat sequentially, with continued positive non-GAAP operating income and positive non-GAAP cash flow.
Second Quarter Fiscal 2008 Conference Call
Mindspeed will conduct a conference call to discuss its second quarter fiscal 2008 results this afternoon, Monday, April 21, 2008, at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time. To listen to the conference call via telephone, call 866-246-6203 (domestic) or 706-643-1612 (international); password: Mindspeed. To listen via the Internet, visit the Investors section of Mindspeed's web site at www.mindspeed.com. Replay of the conference call will be available via telephone two hours after it concludes for 30 days by calling 800-642-1687 (domestic) or 706-645-9291 (international); conference ID: 42095407. Replay will also be available on Mindspeed's web site at www.mindspeed.com.
About Mindspeed Technologies(R)
Mindspeed Technologies, Inc. designs, develops and sells semiconductor networking solutions for communications applications in enterprise, access, metropolitan and wide-area networks.
The company's three key product families include high-performance analog transmission and switching solutions, multiservice access voice-over-IP processors designed to support voice and data services across wireline and wireless networks and WAN communication products such as T/E carrier transmission devices and ATM/MPLS network processors.
