3SOF

Sinovac Biotech, Ltd (SVA), specializes in the research, development, commercialization, and sale of human vaccines for infectious illnesses, such as Hepatitis A and Hepatitis B, influenza, and SARS in China and internationally. The company has three vaccines that have completed three phases of clinical trials: Hepatitis A, Hepatitis A&B combined, and influenza (flu).

We've had this important news a few days ago: Sinovac Biotech Ltd. Receives Flu Vaccine Production License from Chinese FDA

The market cap is just about $140M.

We have a company already producing 2 vaccines for the Chinese market and with another powerful one approved. I see plenty of room for speculation here. I can say SVA is exactly the kind of stock that I want now.

Looking at the long term chart we find that SVA has recently broken a long term descending trendline, so the market is recognizing the value of this company:



On a shorter term view, we see two powerful white candles with outstanding volume:



You know I'm bearish on the general market, but there will always be 3 Stocks on Fire  

I'm buying SVA at today's open, I don't mind the gap, 6.66% of the 3 Stocks on Fire Portfolio, as usual.

(This recommendation was made by David Randolph from 3 Stocks on Fire, and he will update this analysis everyday after the close until he sells the stock. 3 Stocks on Fire is a Community of stock traders and investors. Our 3067 members exchange trading ideas and strategies on our message boards everyday. We welcome you as a new member of the 3 Stocks on Fire Community, please take 10 seconds to register and receive our free newsletter)

David,
I have one question for my ever ongoing learning process....

SVA has all the drugs for the bird flu problem... NVAX is moving on the hype that they completed pre-clinical trial for a delivery mechanism.

As you can see SVA is 3.00/share and NVAX is 1.40/share, why it is better to pick SVA than NVAX as more money can be made on share with smaller stock price...
The %age gain on NVAX by movement of some cents will be higher than SVA...

I fully understand SVA is better solid company with effective drugs but according to the price movement upwards why do we pick SVA  as the sector is same for both of them. Stocks will rise due to involvement in the sector..

It'lll be interesting to know the thoughts of everyone about their take on this scenario...

THIS APPLIES FOR (BCON AND CPST) scenario.  (NAUC AND OBDP) scenario. (AMD and INTC) scenario in past. ..

It'll be really helpful to understand risk/reward strategy about putting money into one of the stocks, when different alternatives are abound in one sector and all of us can make money by compunding on one stock to other stock.

Thanks,
Dhiraj

Quote from: dhiraj19 on August 29, 2005, 09:59:03 AM
David,
I have one question for my ever ongoing learning process....

SVA has all the drugs for the bird flu problem... NVAX is moving on the hype that they completed pre-clinical trial for a delivery mechanism.

As you can see SVA is 3.00/share and NVAX is 1.40/share, why it is better to pick SVA than NVAX as more money can be made on share with smaller stock price...
The %age gain on NVAX by movement of some cents will be higher than SVA...

I fully understand SVA is better solid company with effective drugs but according to the price movement upwards why do we pick SVA  as the sector is same for both of them. Stocks will rise due to involvement in the sector..

It'lll be interesting to know the thoughts of everyone about their take on this scenario...

THIS APPLIES FOR (BCON AND CPST) scenario.  (NAUC AND OBDP) scenario. (AMD and INTC) scenario in past. ..

It'll be really helpful to understand risk/reward strategy about putting money into one of the stocks, when different alternatives are abound in one sector and all of us can make money by compunding on one stock to other stock.

Thanks,
Dhiraj

Hello Dhiraj !

That NVAX stock didn't show up on my filters, don't know why, since the chart is very appealing.

Now, the price of a stock tells you nothing about it's potential. The price in itself doesn't tell you how much is the company worth and that's the first thing one should know before investing.

You should compare market caps, not stock prices, in the first place. A stock priced at $1 might be representing a company worth a lot more than a stock priced at $10. It depends on the number of shares outstanding. Stock Price*#shares outstanding = Market Cap.

A stock priced at $10 can rise to $100, then split 1/10, rise again to 100, then split again and keep on rising ...

Anyway, NVAX would have been much better for today than SVA     (the market cap on NVAX is in fact lower than SVA).

Thats why I like this web portal.. I wont be calling 3stocksonfire.org a website. Its webportal where investors discuss the strategies and benefit each other with the stock picks....

David,
Thanks for the tip.. I'll keep it in my mind from next pick onwards. ( Price and outstanding shares)

Dhiraj

Excellent choice!!!
May be good long term hold
Production of approved vaccines begin soon
Decent progress on developing SARS vaccine
Beginning avarian flu research,priceless if develops vaccine for future epidemic
Low production costs
Immune to recession

I see David talking about and comparing market caps all the time. Ive only dug into chart analysis since my learning process began about 2 months ago. Can someone tell me the relavency of Market caps and how to analyze it

Any help would be great,

thanks all,
Fousc

School starting again...

you ask yourself what has this to do with SINOVAC? 

Now the facts to this:
when school is starting again millions of children and young people - students too - must be vaccined for HEP-A.
That´s an order by law. SVA will be the greatest profiteur from this school vaccine regulation.
SVA has made a delivery contract with the chinese gouvernment about the vaccines they need to do this.

And don´t forget: SVA is a solid invest which will generate lots of money in the next time but an outbreak of avian flu in china or their neighbours and SVA is skyrocketing.


all the best for your invest

Quote from: fousc on August 30, 2005, 04:10:45 AM
I see David talking about and comparing market caps all the time. Ive only dug into chart analysis since my learning process began about 2 months ago. Can someone tell me the relevancy of Market caps and how to analyze it

Any help would be great,

thanks all,
Fousc

Thanks for your question and interest Fousc 

Market Cap is the market value of a company. When you buy stocks you're buying a tiny part of a company, and that company's total market value is given by the market cap. Most investors think of the market cap to find out if the stock is cheap or expensive, given its financials.

I look to market cap usually to see the potential of a stock. You see, a 10% advance in GE's shares is worth $35.6B. A 10% advance, in, say SVA is worth just $13.4M, that is 2,656 times less. For GE to make a 10% move in needs to create value of $35.6B. For SVA to make the same 10% move in its shares it needs to create value of $13.4M. You can imagine it is a lot easier for SVA's stock to move 10% than it is with GE.

If the company is already very big, one shouldn't expect many bags (hundreds of percentage points) out of its stock price. If the company is very small, a micro cap stock, it can rise 10, 20 or 30 fold or more as the company grows to maturity. Of course, there's the reverse of this, small cap stocks can be more risky, the business can fail, and the stock tank 100% and go bankrupt. That's harder to happen with large caps, but sometimes it happens too ...

So, small caps with revenues and earnings growing fast can see their share price rise a lot. Large caps can rise 50%, 100%, but it is almost impossible for GE to rise 10 fold now, it would own the world or something 

I hope this was of any help, there are a lot more things to consider, but this is the essential. Well, not the essential, the essential are the charts, technical analysis is your best friend, for as long as you have the discipline to stay with the trend you will do allright 

Now, looking at SVA, I'm glad that you guys agree with me, this company has strong fundamentals and the uptrend should continue.

It's not enough for the fundamentals to be good and improving, the market action must agree with that assessment. So, and since I would like SVA to be a core holding, a long term holding of the 3 Stocks on Fire Portfolio, I have attached a simple indicator based on moving averages that has been supporting SVA on declines and I will use it for hold or sell decisions of SVA stock.

That indicator is represented by the red line on the chart below and it is called TEMA:

«TEMA is a unique smoothing indicator developed by Patrick Mulloy.  It was originally introduced in the January 1994 issue of  Technical Analysis of Stocks & Commodities magazine.
As Mr. Mulloy explains in the article:
"Moving averages have a detrimental lag time that increases as the moving average length increases. The solution is a modified version of exponential smoothing with less lag time."
TEMA is an acronym that stands for Triple Exponential Moving Average.  However, the name of this smoothing technique is a bit misleading in that it is not simply a moving average of a moving average of a moving average.  It is a unique composite of a single exponential moving average, a double exponential moving average, and a triple exponential moving average that provides less lag than either of the three components individually.»

Since SVA closed above TEMA I will continue holding the stock (though it is possible it comes down to close the $3.25-$3.30 gap)

Quote from: fousc on August 30, 2005, 04:10:45 AM
I see David talking about and comparing market caps all the time. Ive only dug into chart analysis since my learning process began about 2 months ago. Can someone tell me the relavency of Market caps and how to analyze it

Any help would be great,

thanks all,
Fousc

Hi fousc,

Hope this will help some
Market cap is the most important number in Fundamental Analysis. It answers the question - "How much would the company cost if one would buy all its shares at current price?"

From that all other key ratios like P/E, P/S etc. are determined in order to evaluate if shares are cheap or expensive.

Here´s a link for more info:

http://www.investopedia.com/articles/basics/03/031703.asp

Happy studies

Thanks for the info on Market caps Dave and nextmove. Definatly have a tighter grip on the concept of it.

So with that in mind Peerless Systems Corp(PRLS) looks like it has much potential for gain. With a market Cap of Just 86 million, P/E 74.86, and EPS 0.07. And revenues up a u know what load. The earning were just released last week. Take a look. As well the chart broke out of a symetrical triangle on the news of the financials as well being in a strong uptrend.

About Peerless Systems Corporation

Founded in 1982, Peerless Systems Corporation is a provider of imaging and networking technologies and components to the digital document markets, which include manufacturers of color, monochrome and multifunction office products and digital appliances. In order to process digital text and graphics, digital document products rely on a core set of imaging software and supporting electronics, collectively known as an imaging controller. Peerless' broad line of scalable software and silicon offerings enables its customers to shorten their time-to-market and reduce costs by offering unique solutions for multiple products. Peerless' customer base includes companies such as Canon, IBM, Konica Minolta, Kyocera Mita, Lenovo, OkiData, Ricoh, RISO, Seiko Epson and Xerox. Peerless also maintains strategic partnerships with Adobe and Novell. For more information, visit Peerless' web site at www.peerless.com.

Peerless Systems Announces Second Quarter Results for Fiscal Year 2006
Selected Second Quarter and Recent Highlights: * Second quarter revenue increases 53% to $9.7 million versus same quarter last year * Net income of $1.1 million represents 166% sequential increase versus first quarter, and $2.6 million positive swing from second quarter last year * Cash and investments increase to $10.2 million
8/25/2005 4:06:17 PM

   
EL SEGUNDO, Calif., Aug 25, 2005 /PRNewswire-FirstCall via COMTEX/ -- Peerless Systems Corporation (PRLS), a provider of imaging and networking controllers to the digital document market, today reported financial results for its fiscal 2006 second quarter ended July 31, 2005.


Company: Peerless Systems Corporation
   
Second Quarter Results

Second quarter revenue increased 53% to $9.7 million from $6.3 million reported in last year's second quarter. Revenue advanced 34% sequentially versus the $7.2 million reported in this year's first quarter. Product licensing revenue increased to $5.6 million from $4.9 million in the second quarter last year and $2.9 million in the first quarter this year. Engineering services and maintenance revenue was $2.8 million versus $0.6 million reported in last year's second quarter and $3.2 million reported in the most recent quarter. The year-over-year increase in engineering services revenue is attributable to $2.0 million for quarterly services performed under the previously discussed development project the Company is performing for Kyocera-Mita under a binding Memorandum of Understanding (MOU). Peerless also received the full $0.25 million in quarterly performance incentives addressed in the MOU. Revenue from hardware, which includes the Company's application specific integrated circuits (ASICs) and the Everest channel product, increased to $1.3 million from $0.8 million in the second quarter last year and $1.1 million in this year's first quarter.

Peerless signed three second quarter license agreements collectively valued at $3.6 million, all of which were recognized as revenue during the second quarter. Licensing backlog at July 31, 2005, was $1.2 million, which will be recognized over the next four quarters. Contract backlog for engineering services was $0.4 million, versus $0.3 million at the end of the first quarter. The current contract backlog does not include the amounts expected under the Kyocera-Mita MOU.

Gross margins in the second quarter were 48.9% compared with 62.2% for last year's second quarter and 54.3% in this year's first quarter. Research and development expenses declined to $1.3 million, or 13.5% of revenue, versus $3.0 million, or 48.0% of revenue, in the comparable period last year when Peerless was completing its high performance color development and conducting product testing on its Everest channel product. R&D expenses in the most recent quarter were $1.3 million, or 17.5% of revenue. The year-over-year declines in gross margin and R&D expenses are primarily attributable to the transition of in-house engineering efforts to customer development efforts.

Sales and marketing expenses decreased to $0.8 million, or 8.7% of revenue, compared with $1.0 million, or 16.4% of revenue, in the second quarter last year, and $0.9 million, or 13.1% of revenue, in the previous quarter. General and administrative expenses were $1.5 million, or 15.1% of revenue, versus $1.3 million, or 21.1% of revenue, in the comparable year-ago period and $1.3 million, or 17.7% of revenue, in the first quarter.

Second quarter net income increased to $1.1 million, or $0.06 per diluted share, versus a net loss of $1.5 million, or $0.09 per diluted share, in the second quarter last year and net income of $0.4 million, or $0.02 per diluted share, in the previous quarter.

Days sales outstanding for receivables and unbilled at July 31, 2005, were 32 versus 53 at the end of the first quarter and 32 at January 31, 2005. Cash and short-term investments at the end of the second quarter were $10.2 million, or $0.62 per share.

"Our strong second quarter performance is primarily attributable to a team of employees that has worked tirelessly to bring a new generation of affordable, high-performance printing technologies to manufacturers of advanced office workgroup products," said Howard Nellor, president and chief executive officer. "As a result of our recent successes, we have exceeded our forecasts for top and bottom-line performance and have elevated our projections for full-year revenue and earnings performance.

"Our milestone development program with Kyocera-Mita is ongoing, and we continue to pursue additional opportunities with other OEMs interested in our Sierra high-performance color platform," Nellor said. "We remain focused on consummating a second design win during the current fiscal year and we are encouraged by recent progress we have made in this regard."

Nellor added that the solid footing the Sierra product suite has established in the market is allowing the Company to focus more aggressively on turnkey design opportunities. Consequently, Peerless will discontinue shipments of its Sierra-based Everest channel product at the end of the fiscal year. "Everest was designed as a powerful and cost-effective controller for Konica Minolta's(R) high-profile bizhub(TM) C350(TM) multi-function office product. More importantly, Everest was created to validate our new capabilities in high-performance color. With both objectives accomplished and new versions of the bizhub entering the market, we intend to focus principally on larger, longer-term relationships that should have a greater financial benefit for Peerless and our OEM partners."

Six-Month Results

For the six months ended July 31, 2005, total revenue advanced 72% to $16.9 million from $9.8 million in the comparable period a year ago. Gross margins for the six-month period were 51.2% versus 57.9% in the comparable period last year. Net income increased to $1.5 million, or $0.09 per diluted share, versus a net loss of $5.6 million, or $0.35 per diluted share, in the comparable period last year.

Guidance

Management anticipates third quarter revenue of between $8.5 million and $9.0 million. These results are subject to the receipt of three new license agreements collectively valued at $4.1 million, as well as the $2.0 million quarterly payment from Kyocera-Mita and sales of the Everest controller of between $0.4 million and $0.5 million. Third quarter net income is expected to exceed $0.5 million, assuming the receipt of the revenue assumptions referred to above. A sequential decline in net income is expected to result from the one-quarter delay in anticipated ASIC purchases and lower margins on licensing due to the higher proportion of third party licensing.

Full-year revenue is expected to exceed $34 million, which is on the high end of management's previously forecasted revenue range of between $32 and $36 million. Net income for the fiscal year is expected to exceed $4 million versus previously expected net income of more than $2 million. It is anticipated that cash and investments at year-end will exceed $11 million.

The guidance and other forecasts included above assume that Peerless and Kyocera-Mita will enter into definitive agreements that have comparable terms to those contained in the binding MOU, or the parties will continue to operate under the binding MOU. Revenue guidance for the full year are subject to the $4.1 million in new licensing in the third quarter and $5.8 million in the fourth quarter and year end cash and investments will depend on the collection of an approximately $2 million annual license agreement by the end of the fourth quarter. 


Here is a short and long term Chart.

Sorry for spamming the SVA board. Just wanted to reply to you david to see if indeed i do understand the market cap.

 Hi, David!

I think SVA is an excellent selection for your portfolio.
I've been an SVA shareholder since the equity was OTC listed as
"SNYBF.OB". I accumulated most of my current position during its retracement into the 2's this past Spring..

It doesn't surprise me at all that SVA is filling the gap left in the $3.20-$3.30 range.
It's semi-annual statement should be out very shortly, and will show that the company got a slow start this year with its "Bilive(R)" sales (the HepA/B vaccine), due to changes in the
Chinese vaccine distribution regulations last Spring.

L-T, the outlook for SVA is excellent. It should pick up in the Fall and Winter, and sales should be in the neigborhood of 10 million USD for 2005.

The IR firm of the company is excellent- hardworking, and not given to the hyperbole
which characterizes many Chinese equities.
My Chinese equity positions are: SVA, JST and a very recent position-HRBN.OB. All of these are modest positions, although SVA- in which I hold XX,000  shares- less so.
What will drive each of these companies' PPS are revenue growth.
My goal for SVA is multi-year growth.

BTW, David- on a completely unrelated topic- I added to DESC again this morning @$6.41.
I may reduce this L-T position in early October, by taking L-T cap. gains on my earliest shares from last Sept., bought @$2.12. This position has grown very strong for me recently.
All the best, David, and thank you for providing such a valuable resource for other investors!
                              -Rand

One more aside- I sold my CESV position on the morning after its earnings misguidance became apparent. No regrets. Added to ENER at $27.41 that morning.
                             -r.

good

thxs

The stock hit one possible buy point today but IMO often better to not buy the first pullback day after a reversal top candle. There is another buy point as shown or the 9-day EMA. Pay attention to vol.

Thanks for your posts. It's nice to know that randstory has a position in SVA, it reassures the fundamental side of the question 

Now, yesterday was ugly on SVA, but not totally unexpected. A pullback to fill the gap, to meet some ascending support, is allright.

Up or down 7% in one day tells me nothing on SVA. This isn't a momentum play, but an investment, for as long as the market agrees that this is a good investment. Life isn't so long that one can lose time arguing with the market, he always knows better.

So, my process was:

1) Check the chart, does it shows an ascending trend? Yes.
2) Check the fundamentals, do they show potential appreciation? Yes.
3) Buy the stock.
4) Setup a simple trading plan that let's me profit if the stock continues to trend higher, but  guards against the possibility of a change in fundamentals and the trend.

The simple trading plan I've designed is:

Hold SVA as long as it closes above its 121 period TEMA indicator (explained above on this thread)

QuoteHold SVA as long as it closes above its 121 period TEMA indicator (explained above on this thread)

Hi David,

I like your new pick!


After reading your post, I notice that you are going to use the TEMA indicator as a method  to build a mental stop following the SVA closing prise and sell if it goes below it!.
Am  I right?

But what the hell is the  "TEMA" indicator?

I am compel to admit, I never heard of that indicator before!
So my ears are both wide open to discover the one who dares escaping from my radar screen for so long!

The most popular 'MA" style indicators that I know are the firsts three on this list:

SMA or MA: Simple Moving Average 
EMA: Exponential Moving Average
WMA: Weighted Moving Average
TEMA:    Exponential Moving Average----->?

So I would be more than grateful to you, if you could take a bit of your time and explain me what TEMA stand for!

Thanks



Correction!!!!

David,
I definitely need glasses, It is just now I came across your TEMA explanation on the above threads.
It is crystal clear now!
Thanks!.

QuoteThat indicator is represented by the red line on the chart below and it is called TEMA:

«TEMA is a unique smoothing indicator developed by Patrick Mulloy.  It was originally introduced in the January 1994 issue of  Technical Analysis of Stocks & Commodities magazine.
As Mr. Mulloy explains in the article:
"Moving averages have a detrimental lag time that increases as the moving average length increases. The solution is a modified version of exponential smoothing with less lag time."
TEMA is an acronym that stands for Triple Exponential Moving Average.  However, the name of this smoothing technique is a bit misleading in that it is not simply a moving average of a moving average of a moving average.  It is a unique composite of a single exponential moving average, a double exponential moving average, and a triple exponential moving average that provides less lag than either of the three components individually.»

Since SVA closed above TEMA I will continue holding the stock (though it is possible it comes down to close the $3.25-$3.30 gap)