That was Dec , now they backed off because they could not agree on public disclosure of agreement.I dont think Euronet is going to let the “INVESTORS” take this one for only $2.50 a share .

THIS IS POWDER KEG
MARCH 25,08 thats deadline deal
The Company currently expects the amended transaction to close upon the conclusion of a shareholder notice period required by the NYSE when utilizing this exception, which is expected to occur no later than March 25, 2008.

READ AND WEEP

said it had made an unsolicited offer to buy rival money-transfer specialist MoneyGram International Inc. for $1.65 billion in stock.

Euronet, of Leawood, Kansas, said Thursday that MoneyGram had rejected the proposal and the company threatened a proxy contest if MoneyGram won’t agree to discuss its buyout offer, according to the Associated Press.

Euronet, in a Dec. 4 letter offered MoneyGram $20 a share, a 43% premium over that day’s closing share price. The company also indicated it would be willing to raise the offer “if the results of our due-diligence review would warrant it.”

MoneyGram officials declined to comment.

The offer is an outgrowth of the global credit crisis. MoneyGram’s share price has fallen more than 50% this year, largely because of its foray into mortgage-related securities that forced it to book substantial write-downs and take on more debt.

The global money-transfer market has experienced strong growth in recent years, in particular in China and India, but it remains fragmented. Euronet, the No. 3 participant in the $270 billion industry, has a market share of 2%, compared with No. 2 MoneyGram’s 4% share. More than 80% of Euronet’s business is outside the U.S.; MoneyGram is a big player in that country.

A combination of the two would still trail market leader Western Union Co., which controls about 16% of the market. But Euronet believes that MoneyGram’s U.S. presence and 81-year-old brand would give it a powerful tool to fuel expansion, especially in emerging markets where Euronet has a strong position.

Euronet’s bid is considerably below MoneyGram’s 52-week high of $32.24 a share, reached in January. The offer prices MoneyGram at about 14 times earnings per share compared with a price-earnings ratio in the market of about 33 for Euronet and 21 for Western Union.

The approach comes at a difficult time for MoneyGram, based in Minneapolis. The company disclosed in October that it had become ensnared in the subprime-mortgage crisis. Although its core business is money transfer and check processing, MoneyGram recently ventured into the more-exotic realm of mortgage-backed securities in an effort to increase returns at its low margin check-processing business. The move initially generated an improvement in operating earnings but backfired when the markets turned, forcing the company to borrow heavily to shore up its balance sheet.

On Oct. 17, MoneyGram said it had to write down the value of the securities by $230 million and draw down an additional $200 million in credit. That prompted credit-rating company Moody’s Investors Service to lower its rating for the business and warn of further cuts. MoneyGram said recently that it was exploring strategic alternatives for the check business.

Euronet offered to extend immediate financing to MoneyGram to ease its credit woes.

Euronet estimates that the combination would create synergies of $85 million a year, much of it from cost savings. The merged company would have operations in more than 170 countries and a strong foothold in rapidly growing Asian markets.

Value: Value is a measure of a stock’s current worth. MGI has a current Value of $7.15 per share. Therefore, it is undervalued compared to its Price of $3.26 per share. Value is computed from forecasted earnings per share, forecasted earnings growth, profitability, interest, and inflation rates. Value increases when earnings, earnings growth rate and profitability increase, and when interest and inflation rates decrease. We advocate the purchase of undervalued stocks. At some point in time, a stock’s Price and Value always will converge.

RV (Relative Value): RV is an indicator of long-term price appreciation potential. MGI has an RV of 1.36, which is very good on a scale of 0.00 to 2.00. This indicator is far superior to a simple comparison of Price and Value because it is computed from an analysis of projected price appreciation three years out, AAA Corporate Bond Rates, and risk. RV solves the riddle of whether it is preferable to buy High growth, High P/E stocks, or Low growth, Low P/E stocks. We favor the purchase of stocks with RV ratings above 1.00.

Stop (Stop-Price): Stop is an indicator of when to sell a long position or cover a short position. MGI has a Stop of $7.14 per share. This is $3.88 above MGI’s current closing Price. A stock’s Stop is computed from a 13 week moving average of its closing prices, and is fine-tuned according to the stock’s fundamentals. High RV, high RS stocks have lower Stops, and low RV, low RS stocks have higher Stops. In the We system, a stock gets a ‘B’ or ‘H’ recommendation if its Price is above its Stop and an ‘S’ recommendation if its Price is below its Stop.
Sales Growth: Sales Growth is the Sales Growth Rate in percent over the last 12 months. MGI has a Sales Growth of 15.00% per year. This is very good. Sales Growth is updated each week for every stock. It is often useful to compare Sales Growth to Earnings Growth to gain an insight into a company’s operations.

Meanwhile, here is a link to see my past articles of some good picks:)
http://www.mystockwinners.com/comments-on-iag/

On Thursday, Juniper (NASDAQ: JNPR) reported its results for Q4 and fiscal 2007 that ended December 31, 2007. Q4 revenue was $809.2 million, up 36% y-o-y and 10% sequentially. GAAP net income was $122.9 million or $0.22 per share on a diluted basis, up 73% y-o-y and 44% sequentially.

For the fiscal year 2007, revenue was $2.84 billion, up 23%. GAAP net income was $360.8 million or $0.62 per share on a diluted basis, compared with a GAAP net loss of $1,001.4 million, or $1.76 per share for 2006. Its headcount increased by 218 employees to 5,879 compared to Cisco’s (CSCO) 63,050. I like the fact that the company grows without hiring ridiculous numbers of people.

Segment-wise, in 2007, infrastructure segment grew 24% to $1.8 billion, Service Layer Technologies [SLT] segment grew 20% to $574 million, and the services segment grew 24% to $509.1 million. In Q4, infrastructure revenue was $500 million, a strong growth of 42% y-o-y and 8% q-o-q, which was led by strong sales in the T, M, and MX series. SLT finally attained its profitability target with a profit of almost $8 million on product revenues. SLT revenue was $168.4 million, up 29% y-o-y and 19% q-o-q. Service revenue was $140.4 million, up 25% y-o-y and 9% q-o-q.

Region-wise, the Americas accounted for 47.5% of total revenue in Q4 versus 47% in Q3. EMEA accounted for 33.6% revenue, compared to 32.5% in Q3. Asia Pacific accounted for 18.9% revenue, lower than 20.5% in Q3. It had 54.6% share of the Taiwan carrier-class core router market in Q3 07, up from 45% last year.

The growing Internet traffic and the online video trend have seen Juniper, as well as Cisco doing well in 2007. According to a recent Synergy Research Group report, it gained 1.7% share in 3Q07 in the Carrier Ethernet market while Cisco’s share grew by only 0.6%. Although Cisco dominates the router market with 66% share and Juniper has just about 15%, it is nevertheless a significant gain for Juniper. In the core router market in which Juniper has 30% share and Cisco 60%, Juniper gained 16% compared to the last quarter. Wow!

Juniper is phasing out its DX product line over the next five years. There is also speculation that Juniper will soon be launching it’s first-ever enterprise Ethernet switch. Cisco leads in the enterprise Ethernet switch market with 71% market share, and ProCurve is second with 10%. Enterprise switching would be an important addition to its portfolio in order to become more competitive with Cisco.

For 2008, Juniper expects revenues between $3.4 and $3.55 billion with EPS between $1.08 and $1.13. For Q1, revenue is expected between $810 and $820 million, and EPS is expected to be between $0.24 and $0.25.

Its shares have increased about 30% in 2007. The company’s stock is currently trading around $27 and its market cap is around $14 billion. In the conference call, Chief Executive Scott Kriens seemed unfazed by economic slowdown citing that spending on strategic IT projects is not likely to be reduced.

Courtsey of S Mitra

Meanwhile, here is a link to see my past articles of some good picks:)
http://www.mystockwinners.com/comments-on-iag/

Juniper Networks, Inc. engages in the design, development, and sale of assured Internet Protocol (IP) secure networking solutions primarily in Americas; Europe, Middle East, and Africa; and Asia Pacific. Its solutions are incorporated into the global Web of interconnected public and private networks across various media, including voice, video and data, and travel. The company’s network infrastructure solutions enable service providers and other network-intensive businesses to support and deliver services and applications on an integrated network. Its infrastructure product family consists of M-Series and T-Series, and E-Series products. The company’s service layer technologies (SLT) provide network security solutions; and enable customers to provide additional IP-based services and enhance the performance and security of their existing networks and applications. The SLT product family comprises firewall and VPN systems; firewall and VPN appliances; SSL VPN appliances; IDP appliances; application acceleration platforms; unified access control; and AAA and 802.1X products. In addition, the company offers technical assistance, hardware repair and replacement parts, unspecified software updates, and professional and educational services. Its customers include service providers, such as wireline, wireless, and cable operators, as well as Internet content providers; enterprises; governments; and research and education institutions.

—— Juniper Networks, Inc. (JNPR) —–
If you think that the company won’t fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on JNPR.

After hitting a one-year high of $37.95 in October/2007, JNPR has declined over the past month. JNPR opened this morning at $24.5. So far today the stock has hit a low of $24 and a high of $25. The chart for JNPR looks neutral and improving, while S&P gives the stock a 3 STARS (hold) rating,

JNPR has a current Value of $30.74 per share

Value: Value is a measure of a stock’s current worth. JNPR has a current Value of $30.74 per share. Therefore, it is undervalued compared to its Price of $25.61 per share. Value is computed from forecasted earnings per share, forecasted earnings growth, profitability, interest, and inflation rates. Value increases when earnings, earnings growth rate and profitability increase, and when interest and inflation rates decrease. VectorVest advocates the purchase of undervalued stocks. At some point in time, a stock’s Price and Value always will converge.

RV (Relative Value): RV is an indicator of long-term price appreciation potential. JNPR has an RV of 1.45, which is excellent on a scale of 0.00 to 2.00. This indicator is far superior to a simple comparison of Price and Value because it is computed from an analysis of projected price appreciation three years out, AAA Corporate Bond Rates, and risk. RV solves the riddle of whether it is preferable to buy High growth, High P/E stocks, or Low growth, Low P/E stocks. VectorVest favors the purchase of stocks with RV ratings above 1.00.

To be Continued….
(Meanwhile, here is a link to see my past articles of some good picks:)
http://www.mystockwinners.com/comments-on-iag/

The numbers of millionaire households globally grew by 14% in 2006 from 2005 and now control a third of the estimated $100 trillion in wealth, a new study by Boston Consulting Group released. These 9.6 million families, comprising 0.7% of world’s households, now control some $33.2 trillion, the BCG study found. About half are located in the United States and Canada, a quarter in Europe and a fifth in the Asia Pacific region. The study, seventh in a series, found that assets held by non-wealthy households (defined as those with less than $100,000 in financial assets) declined slightly from 2001 to 2006. Yet assets held by households with more than $100,000 climbed from $51.4 trillion to $84.5 trillion during the same period.

The study attributed wealth gains mainly to two factors: increased savings and market gains for stocks, bonds and cash, reflecting wealth managers’ long term view that market investments are a key factor in building wealth. The study found that overall global wealth grew 7.5% in 2006 to nearly $100 trillion, the fifth consecutive year of expanding wealth. The study is the latest to quantify a continued widening of the global gap between rich and poor, with the rich getting richer by saving and investing more.

How Successful Traders Think
When Dr. Brett Steenbarger talks with traders, he can often sense within the first few minutes of conversation whether the trader is successful and talented or not. What hits him is identifying, consciously, how he was arrives at that assessment. Here’s a parting thought from Brett Steenbarger: “The really good traders tend to have differentiated market views. Their thinking is of a higher order of complexity. So, for example, they may be bullish on certain themes, bearish on others. They like some stock market sectors, avoid others. They see in range bound terms sometimes, trending on other occasions. The really good traders see a large playing field. If they see a weak dollar, they think about how that affects bonds, metals, energy, and international returns. If they see a breakout from a multiday range, they see a swing move in the making, not just an opportunity to make a few ticks. They see how markets are interconnected. They see how the morning trade relates to the overnight range, and how today’s trade is connected to what we did yesterday.
And the less successful traders? They’re bullish or they’re bearish. That’s it. They think in simple terms of causation: We’re having a housing slump; that means we’ll have a bear market. We’re making new highs; that means we should buy because we’re in an uptrend. The news is good, so we’ll buy. The news is bad, so we should sell. No complexity. Sadly, we see much of that kind of thinking in the financial media. Jean Piaget, a developmental biologist, emphasized that cognitive development occurs through a process of assimilation (taking in new information) and accomodation (integrating that new information with what we already know). Over time, that enables us to develop increasingly complex (and accurate) models of the world. I strongly suspect that process is at work in the development of successful traders.
We often hear advice to the effect that traders should keep things simple. Complexity for its own sake is not helpful in the least. Still, when I talk with successful traders, I am impressed by the relativity of their views: they look at how this is related to that and how they can profit from the relationship. It may be a simple relationship, but it’s not simplistic. The difference is important.”

What to invest?
Short Amazon (AMZN)
http://www.mystockwinners.com/the-best-time-to-short-amzn-is-now-%e2%80%9318/

As the country embraces green building designs, daylight has become a premium. Not only does it save energy (more sunlight means less bulb light) but research shows that workers with access to natural light are more productive. Recent studies supporting the productivity claim are helping architects convince developers that such green features are good for business… everybody’s business. Not only can landlords charge more for the space, but companies can achieve better results from their employees.

Based on a 1999 analysis Lisa Heschong, founder of Heschong Mahone Group, performed with shoppers and schoolchildren, she already knew that natural light caused shoppers to buy more and students to perform better in school. In the study requested by the California Energy Commission, she wanted to analyze worker productivity and whether it mattered if people had a view. “We found really, really big effects,” said Heschong, who studied two call centers operating 12 hours a day with 100 employees. In each study, employees with views outside their windows answered and processed calls 7% faster than employees doing the same work without a view. “It’s almost too big to be believable,” she said. “In both of those cases, the importance of a view jumped out of the data.”

As a result, some companies even go so far as to move executives away from windows to give more workers access to daylight. Companies have also discovered that offices designed to make workers more comfortable pay for themselves. Standard industry norms say that during a building’s 30 year life cycle, a company will spend 90% of the costs on salaries for its workers; 3% on energy for lighting, heating and cooling; 4% on operating the building; and 3% on constructing the building. All companies are realizing that their most important asset is their people.

Gorgeous Girl Offers Crooked Deal

Desperate to find a husband who makes at least $500,000 a year, a desperate 25 year old beauty has removed her craigslist ad off the internet after causing quite a stir. She’s sparked a flurry of debate mainly from Wall Street about her sanity and scruples. Craigslist officials said the ad is legitimate and that she got 40 responses before removing it. Here is her ad word from word:

“What am I doing wrong? Okay, I’m tired of beating around the bush. I’m a beautiful (spectacularly beautiful) 25 year old girl. I’m articulate and classy. I’m not from New York. I’m looking to get married to a guy who makes at least half a million a year. I know how that sounds, but keep in mind that a million a year is middle class in New York City, so I don’t think I’m overreaching at all. Are there any guys who make 500K or more on this board? Any wives? Could you send me some tips? I dated a business man who makes average around 200 - 250. But that’s where I seem to hit a roadblock. 250,000 won’t get me to central park west. I know a woman in my yoga class who was married to an investment banker and lives in Tribeca, and she’s not as pretty as I am, nor is she a great genius. So what is she doing right? How do I get to her level? Here are my questions specifically:

Where do you single rich men hang out? Give me specifics- bars, restaurants, gyms
What are you looking for in a mate? Be honest guys, you won’t hurt my feelings
Is there an age range I should be targeting (I’m 25)?
Why are some of the women living lavish lifestyles on the upper east side so plain? I’ve seen really ‘plain jane’ boring types who have nothing to offer married to incredibly wealthy guys. I’ve seen drop dead gorgeous girls in singles bars in the east village. What’s the story there?
Jobs I should look out for? Everyone knows - lawyer, investment banker, doctor. How much do those guys really make? And where do they hang out? Where do the hedge fund guys hang out?
How you decide marriage vs. just a girlfriend? I am looking for MARRIAGE ONLY

Please hold your insults. I’m putting myself out there in an honest way. Most beautiful women are superficial; at least I’m being up front about it. I wouldn’t be searching for these kind of guys if I wasn’t able to match them - in looks, culture, sophistication, and keeping a nice home and hearth.”

A Response That Could Not Be Put Any Better: “I read your posting with great interest and have thought meaningfully about your dilemma. I offer the following analysis of your predicament. Firstly, I’m not wasting your time; I qualify as a guy who fits your bill; that is I make more than $500K per year. That said here’s how I see it. Your offer, from the prospective of a guy like me, is plain and simple a crappy business deal. Here’s why. Cutting through all the B.S., what you suggest is a simple trade: you bring your looks to the party and I bring my money. Fine, simple. But here’s the rub, your looks will fade and my money will likely continue into perpetuity in fact, it is very likely that my income increases but it is an absolute certainty that you won’t be getting any more beautiful!

So, in economic terms you are a depreciating asset and I am an earning asset. Not only are you a depreciating asset, your depreciation accelerates! Let me explain, you’re 25 now and will likely stay pretty hot for the next 5 years, but less so each year. Then the fade begins in earnest. By 35 stick a fork in you! So in Wall Street terms, we would call you a trading position, not a buy and hold hence the rub marriage. It doesn’t make good business sense to “buy you” (which is what you’re asking) so I’d rather lease. In case you think I’m being cruel, I would say the following. If my money were to go away, so would you, so when your beauty fades I need an out. It’s as simple as that. So a deal that makes sense is dating, not marriage.

Separately, I was taught early in my career about efficient markets. So, I wonder why a girl as “articulate, classy and spectacularly beautiful” as you has been unable to find your sugar daddy. I find it hard to believe that if you are as gorgeous as you say you are that the $500K hasn’t found you, if not only for a tryout. By the way, you could always find a way to make your own money and then we wouldn’t need to have this difficult conversation. With all that said, I must say you’re going about it the right way. Classic “pump and dump.” I hope this is helpful, and if you want to enter into some sort of lease, let me know.”

108 Chinese Billionaires And Growing

China has more billionaires than any country except the United States, as soaring stock and property prices helped to boost wealth among the country’s wealthiest. The number of Chinese worth $1 billion or more jumped to 108, from 15 last year, growing much faster than in western countries. There’s still plenty of growth opportunity as China’s top entrepreneurs turn their sights to the vast underdeveloped and largely unregulated economic hinterland.

Yang Huiyan, 25, tops the 2007 China rich list after receiving $17.5 billion from her property developer father. Last year’s champion, Zhang Yin, fell to second place even as her wealth tripled to $10 billion after a surge in the share price of Nine Dragons Paper. Zhang, the world’s richest self-made woman, continues to widen the wealth gap with western counterparts such as U.S. television host Oprah Winfrey, eBay Inc. founder Margaret Whitman and Harry Potter author J.K. Rowling, according to the report. In a sign that China’s economic growth is largely driven by construction and manufacturing, rather than by science and technology, 7 of China’s 10 richest people are mainly or partly in the real estate business.

The Lies We Tell Ourselves

People always tell half-truths, white lies, sins of omission and other types of financial fiction when dealing with money issues. Why? The motivation, of course, is self-protection: If we don’t tell the truth to ourselves and others, maybe no one will know or maybe the problem will disappear! Here are three of the biggest lies people make about money:

1. The Lies We Tell Ourselves Avoiding the truth about your finances is really easy. The trouble is that the lies we tell ourselves about money are hard to spot because they are often couched as Really Valid Reasons. Here are some other financial cover-ups you may have used:

“I’ve earned it.”
“If she can afford it, why can’t I?”
“I make (insert dollar amount here). I should be able to live better than this.”
“What’s the harm? I hardly ever buy myself anything new.”

These rationales are externally driven. When you compare yourself to others or to a certain ideal (”all my girlfriends have one”), you avoid dealing with the realities of your own bank account. The need to assuage that discomfort is only natural. The trouble comes when denial becomes your primary way of coping and you avoid reality by overspending, trying to buy what others have and other financially damaging behaviors.

2. The Lies We Tell Others These financial fictions are much easier to spot. Who doesn’t know when they are lying to someone? But they are harder to correct for the following reasons:

You feel entitled to your privacy. “Hey, my money is nobody else’s business.”
You don’t want to look bad. “If I told even my best friend about how much debt I have, he would think I was an idiot.”
You know you’re about to fix the problem. “There’s no point in telling anyone we’re behind on our mortgage. I’m about to get a raise and everything will be fine.”

The nugget of truth here is that you really don’t have to tell anyone the truth about your financial life unless hiding the financial facts is getting or keeping you in trouble. The lie you tell about your financial situation could be concealing numerous other emotional issues. There is an overall refusal to accept one’s limitations. We say we don’t have ’such and such’ limitations, we’re fine and we get into deeper problems as a result. Admitting a particular truth to someone else also makes your money problem more concrete and harder to avoid.

3. Sins of Omission Sounds innocent (as though you just forgot to mention something) but can be very harmful to your wallet. In reality, they are an ugly combination of personal denial and lying to others.

Your friend admits that she’s in debt, but you just nod sympathetically, even though your debt could eat her debt for breakfast.
You make a major money mistake, and you’re so ashamed that you vow to take it to your grave.
Your pals are planning a ski vacation this winter and invite you along. You’re broke, but you book the hotel and flight anyway.
You just found out that your spouse is $25,000 in debt, you can’t make your car payments and you have no idea where to get help… so you don’t even ask.

Wrapping a key financial matter in a cloak of silence is really about keeping up appearances and fooling yourself that you haven’t lied, you just didn’t tell the truth.

(Meanwhile, here is a link to see my past articles of some good picks:)
http://www.mystockwinners.com/comments-on-iag/

Insider Name: Thomas J. Riordan
Insider Position: President & COO
Insider Action: 11,000 shrs on 7/27/2007
Insider Total Holding: 101,505 shrs

——————————————————-
Undervaluation Merits…

P/E Ratio = 18.22 (Industry Average 20.32)
P/S Ratio = 1.06 (Industry Average 1.68)
P/CF Ratio = 15.52 (Industry Average 16.97)

Industry: Capital Goods

————— Terex Corp. (NYSE: TEX) —————

(Here is a link to see my past articles of some good picks:)
http://www.mystockwinners.com/weekly-pick-intv/

———- Smithfield Foods, Inc. (NYSE: SFD) ———

Insider Name: Larry C. Pope
Insider Position: President and CEO
Insider Action: 10,000 shrs on 10/5/2007
Insider Total Holding: 301,153 shrs

——————————————————-
Undervaluation Merits…

P/E Ratio = 16.7 (Industry Average 41.9)
P/S Ratio = 0.32 (Industry Average 0.70)
P/B Ratio = 1.39 (Industry Average 2.19)
P/CF Ratio = 10.3 (Industry Average 10.70)

Industry: Meat Products

———- Smithfield Foods, Inc. (NYSE: SFD) ———
Smithfield Foods, Inc., together with its subsidiaries, engages in production of hog, and processing of pork and beef worldwide. The company offers fresh pork products, including unprocessed and trimmed cuts, such as loins, picnics, and ribs; and packaged meats products, such as smoked and boiled hams, bacon, sausage, hot dogs, deli and luncheon meats, pepperoni, dry meat products, and ready-to-eat foods. It also offers beef products, which comprise boxed beef and ground beef. Smithfield Foods also involves in turkey production and hatchery operations. The company sells its products to supermarket chains; wholesale distributors; export markets; other further processors; foodservice industry, such as fast food, restaurant, and hotel chains; hospitals; and other institutional customers. Smithfield Foods markets its products through its sales force and through independent commission brokers. The company was founded in 1961 and is based in Smithfield, Virginia.

Date Insider Shares Type Transaction Value*
12-Oct-07 POPE C LARRY
Officer 10,000 Direct Purchase at $29.30 - $29.31 per share. $293,0002
1-Oct-07 LUTER JOSEPH W IV
Officer 36,400 Direct Option Exercise at $13.22 per share. $481,208
1-Oct-07 LUTER JOSEPH W IV
Officer 36,400 Direct Sale at $32 - $32.17 per share. $1,168,0002
25-Sep-07 FRIBOURG PAUL J
Director 60,000 Indirect Purchase at $29.97 per share. $1,798,200
24-Sep-07 FRIBOURG PAUL J
Director 50,000 Indirect Purchase at $29.94 per share. $1,497,000
21-Sep-07 FRIBOURG PAUL J
Director 150,000 Indirect Purchase at $30.05 - $30.06 per share. $4,508,0002
20-Sep-07 FRIBOURG PAUL J
Director 165,000 Indirect Purchase at $29.72 - $29.86 per share. $4,915,0002
18-Sep-07 LUTER JOSEPH W IV
Officer 3,600 Direct Option Exercise at $13.22 per share. $47,592
18-Sep-07 LUTER JOSEPH W IV
Officer 3,600 Direct Sale at $33 per share. $118,800
29-Aug-07 TRIBLE PAUL S JR
Director N/A Direct Statement of Ownership N/A
1-Aug-07 SULLIVAN KENNETH M
Officer 135 Indirect Statement of Ownership N/A
11-Jul-07 WRIGHT MELVIN O
Director 1,500 Direct Sale at $29.93 - $29.95 per share. $45,0002

To be Continued….
(Meanwhile, here is a link to see my past articles of some good picks:)
http://www.mystockwinners.com/weekly-pick-intv/

Globally the pharmaceutical sector spends an estimated $53 billion a year on research and development. Despite this massive amount of capital an average of less than 26 drugs per year have been brought to market in the last eight years.

If $32 billion out of $53 billion results in failed drugs that means the chances of success are roughly 1 out of 3. That is pretty risky when the gamble is $800 million dollars. It is for this very reason the SmallCap MarketWatch has stayed away from biotech in most situations. In the very few circumstances where feel the inclination to be bullish, the underlying reason is almost always hard cold cash. The subject of today’s edition, Inhibitex Inc. (INHX), is a company that had $59.5 million in cash at the end of Q1 2007 and a current market capitalization of $37.06 million. On March 8, 2007, the Company provided financial guidance for 2007, indicating its anticipated net cash burn for 2007 would be less than $11 million (press release). Assuming this is the case, Inhibitex should have almost $55 million in cash when the company reports earnings next week on August 9th. In case we forgot to mention, the stock closed yesterday at $1.20 per share while cash per share is in the neighborhood of $1.75 per share. We often hear people say that this company or that is “worthless” but here we actually have a case of being worth less than cash.

Things at Inhibitex weren’t always so dire. The company was actually founded in 1994 and went public in 2004 raising $35 million dollars at $7 per share. Based on the current 30.6 million shares outstanding the company was sporting a valuation of $214 million or over six times today’s market value. The beginning of the end occurred in Q1 2006 when the company had disappointing news regarding their leading drug Veronate. This drug was being developed for the prevention of hospital associated infections in very low birth weight infants. As we mentioned earlier in this edition, biotech is a risky venture and Inhibitex’s Veronate failed phase III clinical trials. Not surprisingly, this sent the stock into a tail spin from a high of $10.82 to a low of $1.42 down to yesterday’s all time low of $1.20 per share.

This is where we have to give the management team at Inhibitex some serious credit. Instead of just sitting there shell shocked the company is actually trying to survive although things for shareholders have not prospered. In the past 52 weeks share of INHX are down 20% BUT it has been quite an improvement from 2006 as readers can see from the chart above.

Inhibitex has completely divested its interest in Veronate and has refocused resources on its MSCRAMM platform. The company has successfully restructured its operations reducing its burn rate from $9 million in Q1 ?06 to $11 million for all of 2007. It’s never easy to make the hard decisions that enable a company to survive. In this instance, we think management has done a good job of trying to salvage what must have been a tremendous heart ache.

Inhibitex is now focused in the novel antibody space. Novel antibodies are geared towards the prevention and treatment of serious bacterial and fungal infections. All of the company’s current projects and licensing agreements are based on their proprietary technology MSCRAMM protein platform. One of the main functions of the immune system in the human body is to produce antibodies. Antibodies are proteins that attach themselves to infectious agents (pathogens) within the body. MSCRAMM is a protein that has been found successful to bind with different antibodies.

Going forward, the company has a couple strong drug candidates in its pipeline. First, Inhibitex’s leading drug candidate is Aurexis, which has completed phase II clinical trials and has also been granted fast track designation by the FDA. Aurexis is an antibody that targets S. aureus or commonly known as staph infections. If the drug enters phase III or the company announces a pharma partnership there could be a tremendous upshot for the stock.

Also, given my low expectations from growth initiatives, I don’t believe we’ll see AMZN as anything more than a 20% grower in a low margin retail business which, if correct, will be rewarded with a much lower valuation than experienced currently.

Likely worst case scenario in my mind is that AMZN grows into its valuation over the next couple years and the stock moves nowhere. One option for the risk adverse would be to do a pair trade with GOOG and/or EBAY and profit from the multiple compression while hedging out some risk that the market continues its irrational pricing of some internet stocks.

Potential catalysts:
-Continued failure of new initiatives
-Internet sales tax is enacted or gains momentum
-Increased competition from niche players and offline companies building out an online presence.
-Rotation away from the internet names
-Unexpected tax rate fluctuations in upcoming quarters

Disclosure: I am currently short AMZN.
And
Amazon Senior Vice President and Chief Financial Officer Thomas J. Szkutak Sells 26,000 Shares on 10/4/2007

With September out of the way, what’s left to fret? Investors have been spooked by October’s reputation—not because of Halloween—but because it has been a bottoming month for many market meltdowns: Five of the last nine bear markets in the past 50 years ended this month. It also hosted the granddaddy of all crashes, in 1929, and a pretty fair-sized “market break” in 1987.

Here is a link to see my past articles of some good picks:
http://www.mystockwinners.com/china-stock-watch-vcdyob/