Healthcare Technologies (Nasdaq: HCTL ) has been listed on Nasdaq since the 1980s, and has never made hearts flutter as much as it has in the last three days of trading last week. On August 21, the share leaped 27% on a huge 56,000-share volume, exception for the company. If you look at the share’s record this year, you’ll see there were more days on which no shares changed hands than days with any trading whatsoever in the share.
I thought it was just by chance. Although I got some e-mail on the subject, I didn’t respond. After all, the share isn’t exactly Pharmos (Nasdaq: PARS). The share fell 9% the following day on a volume of 25,000 shares, and I assumed that some had simply made a mistake, as happens not infrequently with such shares. Meanwhile, I checked to see if there had been any earthshaking news about the company, and there hadn’t been.
Then along came Wednesday, Thursday, and Friday, when the share price more than doubled, from $0.69 to $1.40, and on a gigantic combined trading volume of almost 400,000 shares. That’s pretty amazing for such a long-standing and familiar company. What caused the eruption?
I sent an e-mail to the guy who’s in charge of research for my pal Steven, who has access to every nook and cranny on Wall Street, and everywhere else, for that matter. The answer was, “Lon Juricic is buying the share.” “The Biotech Insider,” Juricic’s bi-weekly publication, talks about small biotechnology companies engaged in identifying and tracking the smallest components in our world. Of the five shares he mentions, he lists Healthcare as having “latent potential”.
Meanwhile , the small Israeli company published its second quarter report, and I looked there for Juricic’s hidden jewel. Sales fell from $4 million to $3.72 million in the quarter. The company made a $51,000 profit - in annualized terms, about one eighteenth of its $920,000 profit of last year. Its second quarter EPS fell from $0.12 to $0.01. The results for the first half of the year weren’t much better. The interesting questions are where is the jewel hidden, and how Juricic happened to pick on Healthcare. I greatly hope that Juricic saw something in Healthcare not reflected by the company report. In any case, I’ve held this share since 1988 (I bought it together with Teva (Nasdaq: TEVA; TASE:TEVA), would you believe it?).
While on the subject of Teva, the share sank by as much as 4% on Friday, before struggling back to minus 2% for the day. Merck and Co. (NYSE: MRK) success in convincing a Wilmington, Delaware court that Teva had violated patent law with regard to the Fosamax drug panicked the investors. Merck insists the patent is valid until 2018. A month ago, another court authorized Teva to manufacture the drug.
On Thursday, before this report, Teva almost reached its all-time high. In any case, Teva will appeal, and Merck will appeal, and everyone in sight will appeal, and the lawyers will earn a lot of money, but the initial panic was unjustified, because there will be many turnarounds before anything is settled. Meanwhile, the authorities approved another drug in the laboratories of IMPAX Laboratories, (Nasdaq: IPXL), in which Teva has a small stake. Johnson and Johnson (NYSE: JNJ) manufactures the drug, which helps relieve urinary tract conditions. Teva’s investment in IMPAX is certainly proving worthwhile.
Two founders are leaving Gilat Satellite Networks(Nasdaq:GILT) with cash-stuffed pockets. To tell you the truth, I hate sticking my nose into other people’s business, but it seems to me that Israel has developed a management and compensation culture, which has no equivalent anywhere else in the world. I don’t see where the money being splashed around at Lumenis (Nasdaq: LUME) comes from; I also don’t see why boards of directors are approving such glad-handing, if the numbers I’ve been reading about these two companies are true. I swear that I’ve been getting quite a few e-mails from overseas with questions about these matters, about companies from ECI Telecom(Nasdaq:ECIL) to Lumenis, asking “What’s going on there?” I wish I knew.
Ceragon Networks (Nasdaq: CRNT) broke its record for the year on Thursday, when the share reached $4.20. Ceragon began the year at $1, began May at $2, and is now at $4.20 not bad. The Fidelity group, which has had an impressive roller coaster ride with the share, recently sold part of its stake, but judging by what I see in Ceragon’s results, the sale will only benefit the company and the liquidity of its share. Ceragon helps transmit information over wireless broadband, and the company’s quarterly and six-month results show an impressive emergence from the slow-down. Ceragon has $40 million in cash, and with the strengthening of the wireless industry (which I’m sure is gathering steam see Nextel Communications (Nasdaq, XETRA: NXTL) and its results), Ceragon, which successfully survived the bad times, is destined to be a future star.
Published by Globes [online] - www.globes.co.il - on August 31, 2003