Companies featured in this edition of the newsletter: ENZ, OPSSF/ OPS.V
This week the stock market extended its post-Brexit rebound, and the virtually nonexistent earnings growth will likely be used as an argument against a rate hike in the near term. The Dow Jones Industrial Average finished the week at 18,147 up 197 points or 1.1% from 17,949, and it is up 4.1% for the year. The Nasdaq finished the week up 94 points or 1.9% at 4,957 from 4,863 last week, and it is down -1.0% for the year. The S&P 500 finished the week at 2,129 up 27 points or 1.3% from 2,103 last week, and it is up 4.2% for the year. The Russell 2000 finished the week up 21 points or 1.8% at 1,178 from 1,156 last week, and it is up 3.7% for the year. The benchmark index had a better showing than the Dow, but couldn’t keep up with the Nasdaq.
In economic news, new orders for manufactured goods declined 1.0% in May to follow a revised 1.8% increase in April. The May report represented the first decline in three months. The trade deficit widened to $41.10 billion in May from $37.40 billion in April. The Non-Manufacturing ISM report on Business increased to 56.5 in June from 52.9 in May. Weekly initial claims for the week ending July 2 totaled 254,000, and with this report, the series has been running below 300,000 for 70 consecutive weeks. Continuing claims for the week ending June 25 declined by 44,000 to 2.124 million.
Nonfarm payrolls increased by 287,000, and over the past three months, job gains have averaged 147,000 per month. The unemployment rate was 4.9% versus 4.7% in May, and persons unemployed for 27 weeks or more accounted for 25.8% of the unemployed versus 25.1% in May. June average hourly earnings were up 0.1% after being up 0.2% in May. Aggregate earnings were up 0.2% on top of a downwardly revised unchanged reading in May. The average workweek was 34.4 hours versus 34.4 in May. The labor force participation rate was 62.7% versus 62.6% in May. The downward revision to May nonfarm payrolls resulted in the first negative reading for that series since 2010. Total outstanding consumer credit increased by $13.4 billion in April after increasing a downwardly revised $28.4 billion in March.
This week Walgreens Boots Alliance reported Fiscal 2016 3Q net income of $1.1 billion or $1.01 per diluted share compared with $1.3 billion or $1.18 per share last year. PepsiCo reported 2Q 2016 net income of $2.0 billion or $1.38 per diluted share compared with $2.0 billion or $1.33 per share in the same period a year ago.
This week the Cantor Fitzgerald 2nd Annual Healthcare Conference will take place July 12-13, 2016 in New York. The 8th Annual CEO Investor Summit 2016 will take place July 13, 2016 in San Francisco, CA.
Enzo Biochem, Inc. (NYSE: ENZ), a pioneer in molecular diagnostics, announced that its subsidiary, Enzo Life Sciences, Inc., has reached and finalized a settlement with Illumina, Inc. (ILMN) that included a payment of $21 million to Enzo in an action brought in Delaware Federal District Court by Enzo alleging infringement of its U.S. Patent No 7,064,197, entitled System, Array and Non-Porous Solid Support Comprising Fixed or Immobilized Nucleic Acids.
This settlement resolving the dispute between Enzo Life Sciences and Illumina impacts only one of 11 cases originally brought by Enzo in the United States District Court for the District of Delaware alleging patent infringements against various companies, five of which are now resolved and six of which remain pending.
Enzo finished the week at $5.93.
Opsens Inc. (OTCQX: OPSSF) (TSX: OPS.V), a healthcare company that engages in the development, manufacture, sale, and installation of fiber optic sensors for interventional cardiology, fractional flow reserve (FFR), oil and gas, and industrial applications, released the results of its third quarter ended May 31,2016.
Opsens’ new plant has been housing the Company’s medical activities since March 2016, As previously announced, the move has affected Opsens’ third quarter 2016 revenues, as new authorizations were required in some markets to manufacture and deliver products from the new plant. Now that these authorizations are secured, the move gives Opsens much needed space and equipment required to accelerate growth to meet the growing demand for its FFR products.
In the third quarter, consolidated sales reached $2,125,000 compared with $831,000 in 2015, an increase of 156%, supported by growth in FFR and oil and gas sales. Gross margin increased from $232,000 to $514,000 for the quarter ended May 31, 2016, compared with the same period last year. The increase in the gross margin is explained by higher revenues as explained previously. The gross margin percentage decreased from 28% for the three-month period ended May 31, 2015 to 24% for the three-month period ended May 31, 2016. The gross margin percentage was affected by downtime caused by the relocation of the Company in its new facility.
Net loss amounted to $3,076,000 for the three-month period ended May 31, 2016 compared with a net loss of $1,355,000 for the corresponding period last year. For the nine-month period ended May 31, 2016, sales of FFR products reached $3,127,000 compared with $204,000 for the same period last year, an increase of $2,923,000. Consolidated revenues totaled $6,576,000 and $7,555,000, respectively, for the nine-month periods ended May 31, 2016 and 2015. In 2015, non-recurring revenues of $3,458,000 related to a distribution agreement has been accounted for.
Louis Laflamme, Opsens’ President and Chief Executive Officer, stated that during the third quarter of 2016, Opsens completed the move into its new state of the art facility. This solid growth foundation and the expansion of their new marketing activities in FFR positions Opsens for sustained growth in the coming quarters. He also mentioned that the very positive feedback on the performance of the OptoWire II allows them to believe that they have in hand all the elements to gain market share in the growing FFR segment and to reach their goal to become the first choice for cardiologists.
Volume Alert: Opsens Inc. (OTCQX: OPSSF) (TSX: OPS.V), a healthcare company that engages in the development, manufacture, sale, and installation of fiber optic sensors for interventional cardiology, fractional flow reserve (FFR), oil and gas, and industrial applications, saw more than average trading volume across both the bulletin board and the Toronto Venture Exchange last week. On the bulletin board it traded over 61,000 shares on Wednesday- that’s about eight times its three-month average daily volume. It typically trades around 8,000 shares a day. It also traded a lot on the venture exchange, especially on Wednesday as it traded over 100,000 shares-about two times its three-month average daily volume.
Opsens closed the week at $1.10 on the OTCQX under OPSSF and $1.58 on the Venture Exchange under OPS.V.
A profile, description, or other mention of a company in the newsletter is neither an offer nor solicitation to buy or sell any securities mentioned. While we believe all sources of information to be factual and reliable, in no way do we represent or guarantee the accuracy thereof, nor the statements made herein. THE READER SHOULD VERIFY ALL CLAIMS AND DO ITS OWN DUE DILIGENCE BEFORE INVESTING IN ANY SECURITIES MENTIONED. This publication accepts compensation from companies that it features. This newsletter should not be regarded as an independent publication. Our editors may, from time to time, acquire positions in the companies that they cover. This could represent a conflict of interest. The CEOcast newsletter shall be under no obligation to inform readers about its trading activities. CEOcast's editors reserve the right to buy or sell shares in these companies at any time. The following companies, featured in this newsletter, have compensated CEOcast: Enzo Biochem, five thousand dollars cash per month. Opsens, fifteen thousand dollars cash.