10 Hotline: 410 528 8228 TAIPAN Sounds good, right? But a quick check of NDS
Group on Bigcharts turns up a US$28.00 stock.
That’s too rich for my blood. I’d rather find a lower-
priced company that’s dealing with NDS technology.
Good thing NDS has CNXT on its payroll. Conexant Systems
(CNXT:NASDAQ) CNXT is an IC manufacturer for NDS. Now, you’d need a week and a manual the size of “War and
Peace” to understand NDS— and CNXT— technolo-
gy. Here’s all you need to know about IC’s: they’re
computer chips. And CNXT makes them. Insiders have been buying shares of CNXT like
penny candy. The company must be on to some-
thing. Or are certain “strings” being tugged? So far this year, insiders have bought 54,797
shares of CNXT. As I write this, the dollar totals are
still being calculated, but the list of insiders runs the gamut. From the president all the way to a secre-
tary, they’ve all gotten a piece. Now, CNXT and RADA are a little more specula-
tive. So, buyer beware. But let me tell you that both
experienced significant volume spikes during the
summer of the last presidential election year. I’ll leave it to you to look at the charts. Space is
limited in this issue. As of this writing, CNXT is trading at US$6.60
and RADA is trading at US$8.64. I’m looking at
these stocks for some nice gains this summer. Buy
both at current levels. Make sure to set a 25% stop-
loss. I’m interested to see where Campaign 2004
will take these stocks. But John Kerry is only one candidate. Imagine
the money flowing into the other candidates’ cam-
paign coffers. All of those undiscovered profit
opportunities have me drooling. Stay tuned for
more… n 2003 turned out to be a fine
year for the US stock markets.
After three years of demoralizing
declines, the Dow, NASDAQ and
S&P 500 enjoyed a refreshing
change of fortunes, climbing
25%, 49% and 26%, respectively. During the fourth quarter,
once fragile company profit
margins really beefed up, turn-
ing in the best performance in a decade. With a little over three quarters of the
companies in the S&P 500 reporting results so far,
operating earnings jumped almost 20%. By the
time all the Q4 earnings are announced, the figure
is expected to rise to 25%. Swiss biotechnology company Serono
(SRA:NYSE) contributed to the strong figures with
record quarterly results. The Geneva-based firm
enjoyed a 29% rise in revenues to US$565 million,
catapulting net profit up 37% to US$111.6 million.
Operating income surged 49.5% to US$132.4
million. Serono focuses its human therapeutics business
on three primary areas— neurology, reproduction,
and metabolism/growth hormone treatment. With its drugs sold in over 90 countries worldwide, such
successful diversification has made Serono the third
largest biotech in the world. Reproducing profits Serono is the world’s biggest developer of fertili-
ty and growth hormone drugs. With sales of Gonal-
F, Luveris, Ovidrel, Crinone and Cetrotide rising 20%
to US$593.7 million in 2003— representing 87% of
all reproductive drug sales— it’s the global market
leader. Gonal-F, a hormone product that aids the
development of human eggs, is Serono’s second
biggest seller. Fourth-quarter sales jumped 22% to
US$148 million. Serono also markets human growth hormone
drugs Saizen and Serostim— the latter a high-dose
drug used to treat the wasting caused by AIDS. And
in December 2003, the FDA gave “orphan drug sta-
tus” to Serono’s Zorbitive human growth hormone,
which is used to treat short bowel syndrome. Being a European company, Serono naturally
enjoys decent exposure across the Continent. And
thanks to one neurological drug in particular, the
company is now gaining an increasing presence in
the US, too. A Swiss biotech company carving out
some healthy profits Martin Denholm
