JOEZ stock is up more than 70% year-to-date thanks to strong revenue and sales. In spite of its premium garments with expensive prices, Joes Jeans has turned a quarterly profit in each of the last four periods — including fourth-quarter profit that topped Wall Street estimates by 400%! That’s earnings growth you can take to the bank, making JOEZ a great penny stock to buy now.

It is a Stock with a lot of growth potential and relatively low priced right now.

Biotech Stock Evaluation involves analyzing the different points. A fair evaluation is to be made before investing in any biotech stocks.

1. Competitor (Existing and other drugs in the Pipeline) : Voreloxin is used for treating Acute Myeloid Leukemia. CYCC is is the main competitor for SNSS. Sapacitabine (CYC682) is also in the Phase II trial stage. What will be the market share of Voreloxin? This will depend of the performance of CYC682 and Voreloxin. However if the drug is approved, we can count on at least 30% market share. (If the drug is so bad, then FDA will not approve the drug.)

2. Market for the drug. : AML is a rapidly progressing cancer of the blood characterized by the uncontrolled proliferation of immature blast cells in the bone marrow. The National Cancer Institute estimated that nearly 13,000 new cases of AML were diagnosed and approximately 9,000 deaths from AML occurred in the U.S. in 2009. Additionally, it is estimated that prevalence of AML is approximately 25,000 in the U.S. AML is generally a disease of older adults, and the median age of a patient diagnosed with AML is about 67 years. Estimated AML market is $900mm a year. 30% of 900mm = 270mm

3. No of Shares outstanding.: 110mm shares outstanding as of today. By the time the drug is approved, number of shares is most likely to go up to another 25% (to be safe). So for our calculations we will consider 110 * 1.25 = 137.5 mm

4. Gross margin: 40 % to be fair
270 * .4 = 108

5. Operating expenses: 50mm per year for new trial and research expense.

6. Profit after operating expense 108 – 50 = 58 million

7. Assume a P/E ration of 20 gives = $1.16billion

8. Price per Share will be 1160/ 137.5 = 8.43

9.Now what is the chance of approval, taking a 50% chance of FDA approval will bring the value down to $4.215.

10. Approval will be at least 2 year away. For each year discount at least 20%.
     4.215 – .843 = 3.372
     3.372 – .6744 = 2.69

So we have calculated targeted value as $8.43. However we can say that now it is $2.5 stock.

Note:  We take no responsibility for the loss or gain made by individual investor. Investors should do their own research before  investing the money in the stock.

Sunesis also reported today that, as part of its global development strategy, a pre-submission meeting has been scheduled for the current calendar quarter with the European Medicines Agency (EMA) to obtain EMA’s scientific advice on the development program for voreloxin, including the proposed Phase 3 trial.

“We are very pleased by the outcomes of these milestone meetings with the FDA and are looking forward to initiating our multi-national Phase 3 trial,” stated Daniel Swisher, Chief Executive Officer of Sunesis. “We believe that voreloxin’s novel anti-leukemic properties and encouraging Phase 2 clinical data hold significant potential in a patient population with few treatment options. As we evaluate how best to fund our voreloxin development program, including our planned Phase 3 trial, we are continuing discussions with potential pharmaceutical partners.”

According to U.S. authorities, StockWatch said, the group pocketed more than $6 million in illicit profits as a result of the complex scheme. One of Brown’s codefendants, Gerard D’Amaro, is expected to plead guilty to similar charges next month, StockWatch said. Four others – Joseph Mangiapane, Pawel Dynkowski, Marc Riviello and Jacob Canceli – have pleaded not guilty, StockWatch said, while a fifth – Pawel Dynkowski – has yet to enter a plea in the case at all. Brown could have faced up to 50 years in prison for his own role in the scam, StockWatch noted, but he expects to receive a lighter sentence in exchange for his guilty plea.

Fundamentals: To determine the health, quality, efficiency, and potential of a company.

Primary

• Increasing Profits
• Competitive Strength
• Little or No Debt
• Improving Financial Ratios
• Trades by Company Officers
• Company Buy-Back Plans
• Industry Conditions
• Political and Social Trends
• News and Company Announcements
• Alliances and Tie-Ups
• Institutional Ownership

Secondary

• Market Risk
• Industry Risk
• Competition
• Management / Board Changes
• Legal Action / Lawsuits

The Buzz Word “Biotech”

What are Biotech firms? Biotech firms primarily use genetic engineering.  Most of these companies are started with some solid idea to come up with some winning product.  Examples are cure for Cancer, AIDS etc…  There are different points to analyze a biotech company.  This is different from analyzing common stock like Microsoft or GE. 

Every Biotech or pharmacy company has to pass many hurdles before they come up with a successful product in the market. If you take the history of Biotech companies, most of them had been at the brink of Bankruptcy at one point of their life.  This is primarily due to the lack of income during the research and development stage of the product. It takes long to successfully develop, get approved by FDA and successfully market the product.

Food and Drug Administration (FDA).

All new drugs must go through a lengthy testing and approval process supervised by the Food and Drug Administration (FDA). Each drug must complete three sets of clinical trials called Phase I, Phase II, and Phase III, typically running 18 months, two years, and three to four years, respectively. Products successfully completing the clinical trials are submitted to the FDA for marketing approval, a process usually taking one or two years to complete.

Given these timeframes, it’s best to focus on companies with at least two products in phase III trails or awaiting final FDA approval. More is better, and you want companies with a steady stream of products in all testing stages.

Burning Cash

Most biotech firms have few, if any, products already on the market generating income. Companies without income to cover expenses are said to be “burning cash.” Analysts often compare a company’s assets to its “burn rate” to determine how long the company can survive before running out of cash. They say it’s better to stick with companies with a least two years supply of cash on hand.

Partners

Most biotech products sound promising. However, it’s difficult to know if there are better competing products in the pipeline and the size of the potential market even if the product is successful. Small biotech companies usually form partnerships with large pharmaceutical firms to market their products. The existence of these partnerships means these in-the-know companies think highly enough of the product’s prospects to take on the marketing.

A last point to mention is beware of companies which are family business.  I have to add some negative marks for them!

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Note: We are not responsible for any errors in the data. If you have any objections or suggestion please submit through the comments. Investors are advised not to take this as a bench mark. We are not liable for any decision taken by you because of this information. Please do your research for your safety.

It is possible that penny stocks can be traded on the regular stock exchanges, the companies that typically list in the Pink Sheets are the ones that are unable to meet the requirements of larger exchanges such as the Nasdaq and NYSE. The Pink Sheets do not have any listing requirements, allowing any company, even a company with no financial history, to be listed.

Due to the nature of the Pink Sheets, being an unregulated exchange, there is generally more of a risk to investors than stocks that are on the larger exchanges such as AMEX.

Advantages of Penny Stocks
Investing in penny stocks provides traders with the opportunity to dramatically increase their profits, however, it also provides an equal opportunity to lose your trading capital quickly. The low cost of Pink Sheet securities is the primary advantage that they offer. Investors who wish to get in on a new company at the onset can pick up stock for literally pennies. If a company does well and grows that initial investment can grow from pennies to much large dividends.

Pink Sheets do pose more of a risk for investors, though. A company may simply vanish, leaving worthless stock issues in its wake. If you invest in penny stocks, you should be prepared to lose it all. Because of this risk, Pink Sheet investments should only represent a small percentage of your investment portfolio.

A lack of liquidity is another risk to investors of Pink Sheet listings. The volume is usually very low and it can be very difficult to find a buyer for the stock. The seller may have to settle for a price that is much lower than initially anticipated just to be able to unload his or her shares.

There are some tips to help the penny stock trader avoid making costly mistakes.

Due Diligence
Stocks listed on the Pink Sheets don’t have to file annual or quarterly statements. This makes starting your due diligence difficult. Often, the information is sketchy at best, and typically, its biased. You should expect a shareholder to say good things about the company. If the company didn’t have potential, they wouldn’t be holding it. Or, they might be hoping to unload their shares and hope to talk you into buying.

Stocks listed on the OTC BB file annual and quarterly statements. This provides some measure of financial success. You’ll find most penny stocks lose money, whether through managerial incompetence, or research and development. The key is to identify the companies whose management has a record of consistently making money, or at the very least, delivering on their business plan, and decreasing expenses.

Check the voloume.  If the trading volume is less it will be difficult to unload the shares.

Do your homework, don’t believe the hype, and protect your capital.

Companies with more than $10 million in assets whose securities are held by more than 500 owners must file annual and other periodic reports, regardless of whether the securities are publicly or privately traded. Smaller companies may use Form 10-KSB. If a shareholder requests a company’s Form 10-K, the company must provide a copy.

In addition to the 10-K, which is filed annually, a company is also required to file quarterly reports on Form 10-Q. Information for the final quarter of a firm’s fiscal year is included in the annual 10-K, so only three 10-Q filings are made each year. In the period between these filings, and in case of a significant event, such as a CEO departing or bankruptcy, a Form 8-K must be filed in order to provide up to date information.