Melissa Davis, senior editor of The Street Sweeper, poses with celebrity stock picker Jim Cramer after a recent taping of his "Mad Money" television show. Davis worked as an investigative reporter for TheStreet.com, where Cramer serves as chairman, before assuming her current role at The Street Sweeper.
Solazyme: It Isn't Easy (Or Profitable) Being Green
by Sonya Colberg, Senior Investigative Reporter, 10/16/2014 9:51:06 AM
Trouble is blowing the lids off the petri dishes at Solazyme (SZYM), where the company has fruitlessly toiled for 11 years at turning sugar and algae into profit.
The San Francisco, Calif. oil-maker’s income statement and analyst estimates are already steeped in red.
It battles increasing net losses (note that, besides Sephora and other stores, SZYM also unfortunately hitched its wagon to badly aging JC Penney (JCP)which traded ~$30 then, ~$7 now) as SZYM produces “green” wrinkle cream from algae.
SZYM also faces a massive string of red flags poised to smother its effort to create renewable oils and chemicals for various markets from its sugar-fed algae.
*Plant shutdown likely dings oil production effort
SZYM first pushed out some commercial oil and drilling lubricant in May from a small area at Brazil’s Moema Plant that the townspeople call “the annex.” CEO Jonathan Wolfson understandably trumpeted the event resulting from a joint venture with Bunge, yet warned, “We have work ahead … establishing consistent production and reliable supply and from there we’ll turn to the ramp up process.”
But production and supply problems already appear to be damaging that ramp-up. Layoffs occurred when the annex lurched to a temporary standstill while a cranky boiler was repaired, according to our source located near the plant in the sugar cane heartland in Sao Palo, Brazil.
SZYM on Oct. 9 offered the sketchiest plant update, describing production of only “modest quantities” of oils, warning:
“… downstream processes at Moema require further optimization and are not yet operating on a fully integrated basis. This is an area of significant focus and ongoing improvement."
So this suggests the plant is not scaling up according to expectations.
Indeed, some analysts seem nervous about SZYM’s future, with PiperJaffray leading the pack with its issued “Underweight” rating, writing:
“… a lack of visibility into the scale-up at Moema in terms of committed contracts, timelines, and general plant operations underscore our Underweight thesis."
The analyst also complained about “very limited visibility/obfuscation into tangible productions metrics” and added:
“High variable costs and fixed cost absorption should start to ramp quickly at Moema, against limited volumes during the plant start-up. We believe that, ultimately, low sales volumes and high fixed costs will beget poorer than expected economics in an effort to secure volumes."
Credit Suisse wrote more gently last week about giving SZYM a “neutral” rating and estimating a $1.66 loss per share this year, while PiperJaffray raised the expected net loss to $1.93.
Other viewpoints on SZYM may be found here.
Accelerate Diagnostics: Mistakenly Rewarded and Now Destined to Collapse?
by Melissa Davis, 10/14/2014 10:44:20 AM
Accelerate Diagnostics (Nasdaq: AXDX) might need to credit a “false positive” for making its stock price look so much healthier these days. Mistaken by some as a promising Ebola play, AXDX has skyrocketed in value over the course of the past few weeks – its share price, up almost 70%, escalating right along with fears of that horrific virus – even though its experimental device specifically focuses on the detection and treatment of stubborn bacterial infections instead.
“Everyone is looking … for the Ebola plays,” one bullish investor noted on StockTwits last week. “Rumor has it AXDX has the inside track on detection. Chart(s) don’t lie.”
They sure are subject to correction, though. You be the judge. Take a close look at the curious nature of the incredible rally that has AXDX just staged, and see if you still believe that its highflying stock can hang onto those inexplicable gains.
With no major developments on the horizon, AXDX actually spent most of September drifting steadily lower until Ebola began to dominate the national headlines and sent traders on a breathless chase for related investment opportunities. Down to $16.50 a share a few short weeks ago, AXDX suddenly reversed course and then proceeded to rocket all the way past $30 a share just a few days after Ebola officially surfaced inside the United States to pose a serious threat right here at home.
As a bleeding highflier that’s currently valued at more than $1.2 billion – the equivalent of 23,300 times its prior-year revenue – AXDX now looks rather dangerous itself.
Indeed, based upon any reasonable measure of its performance, AXDX actually looked wildly expensive even before it racked up those inexplicable gains. Little more than a development-stage company in spite of its lengthy 32-year history (tarnished by regulatory sanctions discussed in more detail below), AXDX has yet to even seek – let alone secure – government approval for the “BACcel” diagnostic testing system that became its primary focus at least a full decade ago. With little revenue and no expectations of actual profits anytime soon, AXDX has nevertheless managed to achieve a market capitalization so generous that it literally exceeds the estimated value that the firm once assigned to the entire market that it has long aimed to serve.
So don’t be surprised if AXDX suddenly takes a dramatic turn for the worse. With its highflying shares arguably priced beyond perfection at current levels, the stock could easily sink for all sorts of reasons. Just think of the brutal correction that AXDX might endure if the market simply discounted its stock to reflect the following:
JAMN Finally Spills the Beans -- And It's an Ugly Mess
by Janice Shell, 6/2/2011 10:32:51 AM
To be sure, the 10-K offered investors little reason to sing. For starters, the filing reveals, this once-hot “coffee company” sells no coffee of its own at all. JAMN relies on a supplier based in frigid Canada – far away from the tropical Jamaican home of its co-founder Rohan Marley – to provide the company with an actual product to sell to its customers instead.
Back in April of 2010, JAMN inked a “supply and toll agreement” with Canterbury Coffee of British Columbia that gave it access to some brew. According to that agreement, JAMN relies on Canterbury to fulfill every role – save a minor one – normally satisfied by a firm that classifies itself as a coffee company. Canterbury purchases the coffee beans. It roasts them. And it then packages them in bags supplied by JAMN – the company’s only real product – for sale to the public.
JAMN signed this deal more than a year ago, right before Shane Whittle – a notorious Vancouver stock promoter – officially resigned as CEO of the company. But the company never mentioned that agreement, seemingly material enough to warrant at least a quiet 8-K report, in a single regulatory filing until now.
Jammin Java (JAMN): Hot Stock ... Bitter Aftertaste?
by Janice Shell, 6/2/2011 10:30:25 AM
It’s time to wake up and smell the coffee! That’s exactly what Jammin Java (OTC: JAMN.OB), a heavily promotedcoffee company, and – for very different reasons – TheStreetSweeper would like investors to do.
Since the beginning of the year, JAMN has miraculously risen from the ashes of the “Grey Market” graveyard to become one of the liveliest – and richest – stocks in the entire microcap arena. JAMN has seen its stock shoot straight toward heaven, soaring from 55 cents to peak above $6 a share on massive daily volume, with its market value nowtopping $355 million despite the company’s limited resources and operating history. (As covered in more detail below, two of the Internet tout sheets pushing JAMN the hardest effectively vanished -- disabled by their Internet servers -- on the day the stock’s trading volume exploded past 20 million shares.)
CCME: Few Signs of Life at 'Healthy' Chinese Firm
by Roddy Boyd, 3/23/2011 9:30:34 AM
Also, and this cannot be understated, hanging out on a sidewalk in Fujian–the sidewalks double as parking spots when the streets, which appeared to have been designed in the Han Dynasty, fill up–was not a viable option. There was also the matter of the world-class headache the Financial Investigator was developing from Fuzhou’s diabolical smell, an epic conflation of poor sewage treatment, air pollution and the smell of cabbage that made getting the hell off Dongjie street a matter of vital importance.
The Financial Investigator and his traveling companion for the trip, an American investor with extensive experience in China, decided to head upstairs despite our interview with the CFO having been cancelled at the last minute (with no explanation given.) We thought a quick tour of the offices and meeting a few other executives might open our eyes to a few things.
Though the language barrier was a little steep with the young receptionist–when we asked for writing paper, she provided Kleenex–we were in short order shown to their conference room and told to wait. It did not escape notice that pride of place in the conference room belonged to a framed certificate of participation from the Fall 2010 Rodman & Renshaw conference, the World Cup for reverse merger companies and the pumpers and touts who peddle them.
Eventually chief operating officer James Yu came down and after spending 30 minutes trying to understand who we were, concluded that giving us a tour wouldn’t hurt. Soon enough, his colleague, Vinne Ye–the chairman’s assistant–came out and took us around.
It was most eye-opening.more...
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