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Saturday, June 27, 2009

A Sirius Sell Off: The Russell Effect

As you may have noticed Sirius took a nose dive in the last 10 minutes of trading Friday, closing down over 20%. The 10 day average volume for Sirius is 67.5 million shares, however on Friday the stock traded over 432 million shares (including after hours). With roughly 100 million shares traded at 3 PM, Sirius volume exploded in the final hour, especially in the final 10 minutes and into after hours. This is most likely due to Sirius being deleted from the Russell Index.

As a recent article by Mark Hulbert on MarketWatch states about the Russell Reconstitution:

So much money is invested in index mutual funds that adding or deleting a stock from a widely followed index has a huge impact on its price.

A stock that is added to an index, for example, will automatically be purchased by all funds benchmarked to that index, propelling its stock higher. Conversely, a stock that is deleted will automatically be sold, forcing its price downward.

Note carefully, however, that these big price swings have nothing to do with the stocks' fundamentals. So issues that have been added to an index will presumably become overvalued relative to stocks that have been deleted.

In after hours, Sirius traded as high as 48 cents but finished trade up 6 cents (16.67%) to 42 cents. The current bid ask spread is .415/.42. Sirius had a nice move up Thursday on the news of a strong debt sale, so it will be interesting to see if Sirius can hold this after hours gain into Monday. I am lucky I didn't have any stop loss orders in for Sirius as I would have sold at the wrong time.

To get an entire list of stocks added and deleted from the Russell Index on June 26, 2009 Check out my blog post Russell Reconstitution Stocks Added and Deleted from the Index.



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Friday, June 26, 2009

Russell Reconstitution Stocks Added and Deleted from the Index

Today was the the Russell Reconstitution where stocks are added and deleted from the index. I thought it would be worth noting which stocks were added and deleted from the Russell 3000 index today. The list below is taken directly from the Russell website.

Stocks Added to Russell Index 2009 (276 Changes):

Company Symbol Sector
ABOVENET INC ABVT Technology
ACACIA RESEARCH CORP ACTG Technology
ACTIVIDENTITY CORP ACTI Technology
AIR TRANSPORT SERVICES ATSG Producer Durables
ALLIANCE FINANCIAL CORP ALNC Financial Services
ALLIED HEALTHCARE INTL AHCI Health Care
ALLION HEALTHCARE INC ALLI Health Care
AMERICA SERVICE GROUP ASGR Health Care
AMERICAN CARESOURCE HLDG ANCI Health Care
AMERICAN DENTAL PARTNERS ADPI Health Care
AMERICAN ITALIAN PASTA AIPC Consumer Staples
AMERICAN NATL BANKSHARES AMNB Financial Services
AMERICAN PHYSICIANS AMPH Financial Services
AMERICAN REALTY INVESTOR ARL Financial Services
AMICAS INC AMCS Technology
APAC CUSTOMER SERVICES APAC Producer Durables
ARGAN INC AGX Producer Durables
ARTESIAN RESOURCES CORP ARTNA Utilities
ARYX THERAPEUTICS INC ARYX Health Care
ASPECT MEDICAL SYSTEMS ASPM Health Care
ASTRONICS CORP ATRO Producer Durables
ATS MEDICAL INC ATSI Health Care
AUBURN NATL BANCORP AUBN Financial Services
AVANIR PHARMACEUTICALS AVNR Health Care
AVI BIOPHARMA INC AVII Health Care
BANCORP INC TBBK Financial Services
BANCORP RHODE ISLAND INC BARI Financial Services
BANK KY FINL CORP BKYF Financial Services
BANK OF MARIN BANCORP BMRC Financial Services
BAR HBR BANKSHARES BHB Financial Services
BARRETT BUSINESS SERVICE BBSI Producer Durables
BENIHANA INC BNHNA Consumer Discretionary
BIOCRYST PHARMACEUTICALS BCRX Health Care
BIODELIVERY SCIENCES BDSI Health Care
BIOSCRIP INC BIOS Health Care
BIOSPECIFICS TECHNO CORP BSTC Health Care
BLUELINX HOLDINGS INC BXC Materials & Processing
BOOKS-A-MILLION INC BAMM Consumer Discretionary
BOOTS & COOTS INTL WEL Energy
BOVIE MEDICAL CORP BVX Health Care
BRIDGE BANCORP INC BDGE Financial Services
BRIDGEPOINT ED INC BPI Consumer Discretionary
BROADWIND ENERGY INC BWEN Producer Durables
CALIFORNIA FIRST NATL CFNB Financial Services
CAPE BANCORP INC CBNJ Financial Services
CARDIOVASCULAR SYS INC CSII Health Care
CARDIUM THERAPEUTICS INC CXM Health Care
CARIBOU COFFEE CO INC CBOU Consumer Discretionary
CARMIKE CINEMAS INC CKEC Consumer Discretionary
CARROLS RESTAURANT GRP TAST Consumer Discretionary
CATAPULT COMMUNICATIONS CATT Technology
CELL THERAPEUTICS INC CTIC Health Care
CENTER BANCORP INC CNBC Financial Services
CENTURY BANCORP INC CNBKA Financial Services
CHASE CORP CCF Materials & Processing
CHELSEA THERAPEUTICS INT CHTP Health Care
CHEVIOT FINANCIAL CORP CHEV Financial Services
CHICOPEE BANCORP INC CBNK Financial Services
CHINA AUTOMOTIVE SYSTEMS CAAS Consumer Discretionary
CHINA GREEN AGRICULTURE CGA Consumer Staples
CHINA HOUSING & LAND DEV CHLN Financial Services
CHINA TRANSINFO TECHNLGY CTFO Technology
CHINA-BIOTICS INC CHBT Consumer Staples
CHINACAST EDU CORP CAST Consumer Discretionary
CITIZENS HLDG CO MISS CIZN Financial Services
CLARIENT INC CLRT Health Care
CNB FINL CORP PA CCNE Financial Services
COMMUNICATIONS SYSTEMS JCS Technology
COMPUTER TASK GROUP INC CTGX Technology
CONTINUCARE CORP CNU Health Care
CORNERSTONE THERAPEUTICS CRTX Health Care
CPI CORP CPY Consumer Discretionary
CREDO PETROLEUM CORP CRED Energy
CUBIC ENERGY INC QBC Energy
CURIS INC CRIS Health Care
CUTERA INC CUTR Health Care
D & E COMMUNICATIONS INC DECC Utilities
DDI CORP DDIC Producer Durables
DELCATH SYS INC DCTH Health Care
DESTINATION MATERNITY DEST Consumer Discretionary
DIAMOND MGMT & TECH INC DTPI Producer Durables
DIEDRICH COFFEE INC DDRX Consumer Staples
DIGITALGLOBE INC DGI Technology
DYNAMICS RESEARCH CORP DRCO Technology
DYNEX CAPITAL INC DX Financial Services
EAGLE BANCORP INC EGBN Financial Services
EASTERN CO EML Materials & Processing
EASTERN INSURANCE HLDGS EIHI Financial Services
ELECTRO-OPTICAL SCIENCES MELA Health Care
ELOYALTY CORP ELOY Technology
ENDOLOGIX INC ELGX Health Care
ENTEROMEDICS INC ETRM Health Care
ENTERPRISE BANCORP INC EBTC Financial Services
EPLUS INC PLUS Technology
ESB FINANCIAL CORP ESBF Financial Services
FEMALE HEALTH CO FHCO Consumer Staples
FIBERNET TELECOM GRP INC FTGX Utilities
FIRST CALIFORNIA FINL GR FCAL Financial Services
FIRST DEFIANCE FINANCIAL FDEF Financial Services
FIRST FINL SVC CORP FFKY Financial Services
FIRST LONG ISLAND CORP FLIC Financial Services
FLORIDA PUBLIC UTILITIES FPU Utilities
FRANKLIN COVEY CO FC Consumer Discretionary
FRISCHS RESTAURANTS INC FRS Consumer Discretionary
GANDER MOUNTAIN COMPANY GMTN Consumer Discretionary
GERMAN AMERICAN BANCORP GABC Financial Services
GLADSTONE COMMERCIAL GOOD Financial Services
GP STRATEGIES CORP GPX Producer Durables
GREAT SOUTHERN BANCORP GSBC Financial Services
GREEN PLAINS RENEWABLE GPRE Energy
GSE SYS INC GVP Technology
GSI TECHNOLOGY GSIT Technology
HAMPTON ROADS BANKSHARES HMPR Financial Services
HARVARD BIOSCIENCE INC HBIO Health Care
HAWK CORP HWK Materials & Processing
HAWKINS INC HWKN Materials & Processing
HEALTH GRADES INC HGRD Producer Durables
HEARTWARE INTL INC HTWR Health Care
HECKMANN CORP HEK Consumer Staples
HEMISPHERX BIOPHARMA INC HEB Health Care
HERITAGE CRYL CLEAN INC HCCI Producer Durables
HERITAGE FINANCIAL CORP HFWA Financial Services
HERITAGE FINANCIAL GROUP HBOS Financial Services
HICKORY TECH CORP HTCO Utilities
HI-TECH PHARMACAL CO INC HITK Health Care
HOME BANCORP INC HBCP Financial Services
HOME DIAGNOSTICS INC HDIX Health Care
IMERGENT INC IIG Technology
IMPAX LABORATORIES INC IPXL Health Care
INCONTACT INC SAAS Utilities
INFINITY PHARMACEUTICALS INFI Health Care
INFORMATION SERVICES GRP III Financial Services
INNODATA ISOGEN INC INOD Producer Durables
INSMED INC INSM Health Care
INTELLON CORP ITLN Technology
IPASS INC IPAS Consumer Discretionary
ISRAMCO INC ISRL Energy
ISTA PHARMACEUTICALS INC ISTA Health Care
JMP GROUP INC JMP Financial Services
K FED BANCORP KFED Financial Services
KENTUCKY FIRST FEDERAL KFFB Financial Services
KIRKLANDS INC KIRK Consumer Discretionary
KVH INDUSTRIES INC KVHI Technology
LAKES ENTERTAINMENT INC LACO Consumer Discretionary
LANNETT CO INC LCI Health Care
LCA-VISION INC LCAV Health Care
LEGACY BANCORP INC LEGC Financial Services
LIONBRIDGE TECHNOLOGIES LIOX Technology
LITHIA MOTORS INC LAD Consumer Discretionary
LIVEPERSON INC LPSN Technology
LODGENET INTERACTIVE LNET Consumer Discretionary
LOGILITY INC LGTY Technology
MAC-GRAY CORP TUC Producer Durables
MAIN STREET CAPITAL CORP MAIN Financial Services
MAKO SURGICAL CORP MAKO Health Care
MATRIXX INITIATIVES INC MTXX Health Care
MAXIM INTEGRATED PRODS MXIM Technology
MCCORMICK & SCHMICKS MSSR Consumer Discretionary
MEDIFAST INC MED Consumer Staples
MEDQUIST INC MEDQ Health Care
MEMSIC INC MEMS Technology
MERCER INS GROUP INC MIGP Financial Services
MERCHANTS BANCSHARES MBVT Financial Services
MERGE HEALTHCARE INC MRGE Health Care
METROPOLITAN HEALTH NETW MDF Health Care
MICROMET INC MITI Health Care
MIDSOUTH BANCORP INC MSL Financial Services
MILLER INDUSTRIES INC MLR Producer Durables
MONEYGRAM INTERNATIONAL MGI Financial Services
MULTIMEDIA GAMES INC MGAM Consumer Discretionary
MYR GROUP INC DEL MYRG Producer Durables
NATIONAL BANKSHARES INC NKSH Financial Services
NAVISTAR INTL CORP NEW NAV Producer Durables
NETWORK EQUIPMENT TECH NWK Technology
NEUROGESX INC NGSX Health Care
NIVS INTELLIMEDIA TECH NIV Consumer Discretionary
NOBEL LEARNING CMNTYS NLCI Consumer Discretionary
NORTH AMERN GALVANZNG NGA Materials & Processing
NORTHEAST CMNTY BANCORP NECB Financial Services
NORTHRIM BANCORP INC NRIM Financial Services
NORWOOD FINANCIAL CORP NWFL Financial Services
NOVAMED INC NOVA Health Care
NUTRACEUTICAL INTL CORP NUTR Consumer Staples
OHIO VY BANC CORP OVBC Financial Services
OIL DRI CORP OF AMERICA ODC Materials & Processing
OLD POINT FINL CORP OPOF Financial Services
OMNOVA SOLUTIONS INC OMN Materials & Processing
ONCOGENEX PHARMAS INC OGXI Health Care
OPENTABLE INC OPEN Technology
OPENWAVE SYSTEMS INC OPWV Technology
ORCHIDS PAPER PRODS COMP TIS Consumer Staples
ORRSTOWN FINL SVCS INC ORRF Financial Services
OVERHILL FARMS INC OFI Consumer Staples
OXIGENE INC OXGN Health Care
PAR TECHNOLOGY CORP PTC Technology
PARAMOUNT GOLD & SILVER PZG Materials & Processing
PENNICHUCK CORP PNNW Utilities
PENNS WOODS BANCORP INC PWOD Financial Services
PEOPLES FINL CORP MISS PFBX Financial Services
PERMA-FIX ENVIRONMENTAL PESI Producer Durables
PERVASIVE SOFTWARE INC PVSW Technology
PONIARD PHARMA INC PARD Health Care
PORTEC RAIL PRODUCTS INC PRPX Producer Durables
PORTER BANCORP INC PBIB Financial Services
PRIMORIS SVCS CORP PRIM Producer Durables
PRUDENTIAL BANCORP INC PBIP Financial Services
QC HOLDINGS INC QCCO Financial Services
RAE SYSTEMS INC RAE Producer Durables
READING INTERNATIONAL RDI Consumer Discretionary
RED LION HOTELS CORP RLH Consumer Discretionary
RENTRAK CORP RENT Consumer Discretionary
REPROS THERAPEUTICS INC RPRX Health Care
REPUBLIC FIRST BANCORP FRBK Financial Services
REVLON INC REV Consumer Discretionary
REWARDS NETWORK INC DINE Financial Services
ROCHESTER MEDICAL CORP ROCM Health Care
ROCKWELL MEDICAL TECH RMTI Health Care
ROSETTA STONE INC RST Consumer Discretionary
SABA SOFTWARE INC SABA Technology
SANTARUS INC SNTS Health Care
SATCON TECHNOLOGY CORP SATC Producer Durables
SCICLONE PHARMACEUTICALS SCLN Health Care
SENECA FOODS CORP SENEA Consumer Staples
SIGA TECHNOLOGIES INC SIGA Health Care
SMARTHEAT INC HEAT Producer Durables
SOLARWINDS INC SWI Technology
SPECTRUM CONTROL INC SPEC Technology
SPECTRUM PHARMACEUTICALS SPPI Health Care
SPORT SUPPLY GROUP INC RBI Consumer Discretionary
SRS LABS INC SRSL Technology
STANDARD MOTOR PRODUCTS SMP Consumer Discretionary
STANLEY FURNITURE CO INC STLY Consumer Discretionary
STARTEK INC SRT Producer Durables
STEMCELLS INC STEM Health Care
STURM RUGER & CO INC RGR Consumer Discretionary
SUMTOTAL SYSTEMS INC SUMT Technology
SUPERGEN INC SUPG Health Care
SUREWEST COMMUNICATIONS SURW Utilities
SYNTROLEUM CORP SYNM Energy
TGC INDUSTRIES INC TGE Energy
TICC CAPITAL CORP TICC Financial Services
TIER TECHNOLOGIES INC TIER Technology
TODD SHIPYARDS CORP TOD Producer Durables
TOWER BANCORP INC TOBC Financial Services
TRANSCEND SERVICES INC TRCR Health Care
TRANSCONTINENTAL REALTY TCI Financial Services
TRAVELZOO INC TZOO Producer Durables
TRIANGLE CAPITAL CORP TCAP Financial Services
UMH PROPERTIES INC UMH Financial Services
UNITED SECURITY BANC INC USBI Financial Services
UNITIL CORP UTL Utilities
UNIVERSAL INSURANCE UVE Financial Services
UNIVERSAL TRAVEL GROUP UTA Consumer Discretionary
URANERZ ENERGY CORP URZ Materials & Processing
URANIUM ENERGY CORP UEC Materials & Processing
US AUTO PARTS NETWRK INC PRTS Consumer Discretionary
US GOLD CORP UXG Materials & Processing
USA TRUCK INC USAK Producer Durables
UTAH MED PRODS INC UTMD Health Care
VANDA PHARMACEUTICALS VNDA Health Care
VANTAGE DRILLING COMPANY VTG Energy
VASCULAR SOLUTIONS INC VASC Health Care
VICAL INC VICL Health Care
VIRAGE LOGIC CORP VIRL Technology
WASHINGTON BANKING CO WBCO Financial Services
WEST MARINE INC WMAR Consumer Discretionary
WHITE ELECTRONIC DESIGNS WEDC Technology
WILBER CORP GIW Financial Services
WILLIS LEASE FINANCE WLFC Producer Durables
X-RITE INC XRIT Producer Durables
YORK WATER COMPANY YORW Utilities
YOUBET COM INC UBET Consumer Discretionary
YOUNG INNOVATIONS INC YDNT Health Care
ZAPATA CORP ZAP Materials & Processing
ZION OIL & GAS INC ZN Energy
ZIX CORP ZIXI Technology

Stocks Deleted from Russell Index 2009 (276 Changes):

Company Symbol Sector
A. H. BELO CORP AHC Consumer Discretionary
ABRAXAS PETE CORP AXAS Energy
ACADIA PHARMACEUTICALS ACAD Health Care
ADVANTA CORP ADVNB Financial Services
AKEENA SOLAR INC DE AKNS Energy
ALEXZA PHARMACEUTICALS ALXA Health Care
AMCORE FINANCIAL INC AMFI Financial Services
AMERICAN OIL & GAS INC N AEZ Energy
ANCHOR BANCORP INC ABCW Financial Services
ARBOR REALTY TRUST INC ABR Financial Services
ARISTOTLE CORP ARTL Consumer Staples
ARLINGTON ASSET INVMT AI Financial Services
AUTHENTEC INC AUTH Technology
AXCELIS TECHNOLOGIES INC ACLS Technology
BANCTRUST FINANCIAL GRP BTFG Financial Services
BEACON POWER CORP BCON Producer Durables
BIDZ COM INC BIDZ Consumer Discretionary
BIOFORM MEDICAL INC BFRM Health Care
BLOCKBUSTER INC BBI Consumer Discretionary
BMB MUNAI INC KAZ Energy
CACHE INC CACH Consumer Discretionary
CALIPER LIFE SCIENCES CALP Health Care
CALLON PETROLEUM CO CPE Energy
CANO PETROLEUM INC CFW Energy
CAPITAL TRUST INC CT Financial Services
CAPITOL BANCORP LTD CBC Financial Services
CAPSTONE TURBINE CORP CPST Energy
CASCADE BANCORP CACB Financial Services
CASELLA WASTE SYSTEMS CWST Consumer Discretionary
CASUAL MALE RETAIL GROUP CMRG Consumer Discretionary
CELL GENESYS INC CEGE Health Care
CHAMPION ENTERPRISES INC CHB Consumer Discretionary
CHINA ARCHITECTURAL ENG CAEI Materials & Processing
CHINA DIRECT INDUSTRIES CDII Financial Services
CITY BANK CTBK Financial Services
COLEMAN CABLE INC CCIX Producer Durables
COLUMBIA LABORATORIES CBRX Health Care
COMMERCIAL VEHICLE GROUP CVGI Producer Durables
CORUS BANKSHARES INC CORS Financial Services
CUMULUS MEDIA INC CMLS Consumer Discretionary
DIGIMARC CORPORATION DMRC Technology
DOUBLE EAGLE PETROLEUM DBLE Energy
DOVER MOTORSPORTS INC DVD Consumer Discretionary
ELIXIR GAMING TECH INC EGT Consumer Discretionary
ENCORE BANCSHARES INC EBTX Financial Services
ENERGY XXI (BERMUDA) LTD EXXI Energy
ENTERCOM COMMUNICATIONS ETM Consumer Discretionary
ENTRAVISION COMM CORP EVC Consumer Discretionary
FEDERAL AGRIC MTG CO AGM Financial Services
FEDERAL HOME LN MTG FRE Financial Services
FEDERAL NATL MTG ASSOC FNM Financial Services
FIBERTOWER CORPORATION FTWR Utilities
FINISAR CORP FNSR Technology
FIRST PLACE FINANCIAL FPFC Financial Services
FIVE STAR QUALITY CARE FVE Health Care
FLOTEK INDS INC DEL FTK Energy
FRONTIER FINANCIAL CORP FTBK Financial Services
GASCO ENERGY INC GSX Energy
GEOGLOBAL RESOURCES INC GGR Energy
GEOMET INC GMET Energy
GERBER SCIENTIFIC INC GRB Producer Durables
GLOBAL TRAFFIC NETWORK GNET Consumer Discretionary
GLOBALSTAR INC GSAT Utilities
GRAY TELEVISION INC GTN Consumer Discretionary
GREEN BANKSHARES INC GRNB Financial Services
GREENHUNTER ENERGY INC GRH Energy
GRUBB & ELLIS CO GBE Financial Services
GUARANTY FINANCIAL GROUP GFG Financial Services
GUIDANCE SOFTWARE INC GUID Technology
HANMI FINANCIAL CORP HAFC Financial Services
HERITAGE COMMERCE CORP HTBK Financial Services
HOUSTON AMERICAN ENERGY HUSA Energy
HSW INTERNATIONAL INC HSWI Technology
HUDSON HIGHLAND GROUP HHGP Producer Durables
HUTCHINSON TECHNOLOGY HTCH Technology
HYPERCOM CORP HYC Technology
ICO GLOBAL COMM HLDGS ICOG Utilities
IDT CORP IDT Utilities
INGERSOLL-RAND CO LTD IR Producer Durables
INTEGRA BANK CORP IBNK Financial Services
JAZZ PHARMACEUTICALS INC JAZZ Health Care
KEY TECHNOLOGY INC KTEC Producer Durables
LADENBURG THALMAN FIN SV LTS Financial Services
LECG CORP XPRT Producer Durables
LEE ENTERPRISES INC LEE Consumer Discretionary
LODGIAN INC LGN Consumer Discretionary
LTX-CREDENCE CORP LTXC Technology
LYDALL INC LDL Producer Durables
MAGMA DESIGN AUTOMATION LAVA Technology
MAGUIRE PPTYS INC MPG Financial Services
MARINEMAX INC HZO Consumer Discretionary
MARSHALL EDWARDS INC MSHL Health Care
MATTSON TECHNOLOGY INC MTSN Technology
MAUI LAND & PINEAPPLE CO MLP Financial Services
MCCLATCHY CO MNI Consumer Discretionary
MEDIA GENERAL INC MEG Consumer Discretionary
MEDIS TECHNOLOGIES LTD MDTL Producer Durables
MERCER INTERNATIONAL INC MERC Materials & Processing
MERIDIAN RESOURCE CORP TMR Energy
MIDWEST BANC HOLDING MBHI Financial Services
MITCHAM INDUSTRIES INC MIND Energy
NATIONAL COAL CORP NCOC Energy
NAUTILUS INC NLS Consumer Discretionary
NEWCASTLE INVESTMENT NCT Financial Services
NEXTWAVE WIRELESS INC WAVE Technology
NN INC NNBR Materials & Processing
OCLARO INC OCLR Technology
ONE LIBERTY PROPERTIES OLP Financial Services
ORBCOMM INC ORBC Utilities
PACIFIC ETHANOL INC PEIX Energy
PALM HARBOR HOMES PHHM Consumer Discretionary
PARK OHIO HOLDINGS CORP PKOH Producer Durables
PATRIOT CAPITAL FUNDING PCAP Financial Services
PENFORD CORP PENX Materials & Processing
PLUG POWER INC PLUG Producer Durables
PRESSTEK INC PRST Producer Durables
PRG-SCHULTZ INTL INC PRGX Producer Durables
PROTECTION ONE INC PONE Producer Durables
QUANTUM FUEL SYS TECH QTWW Consumer Discretionary
QUEST RESOURCE CORP QRCP Energy
RAM ENERGY RESOURCES INC RAME Energy
REDDY ICE HOLDINGS INC FRZ Consumer Staples
RENTECH INC RTK Materials & Processing
REXAHN PHARMACEUTICALS RNN Health Care
RHI ENTERTAINMENT INC RHIE Consumer Discretionary
RICKS CABARET INTL INC RICK Consumer Discretionary
RIVIERA HOLDINGS CORP RIV Consumer Discretionary
RUSS BERRIE & CO INC RUS Consumer Discretionary
SANMINA-SCI CORP SANM Technology
SEACOAST BANKING CORP FL SBCF Financial Services
SIRIUS XM RADIO INC SIRI Consumer Discretionary
SONIC SOLUTIONS SNIC Technology
STRATUS PROPERTIES INC STRS Financial Services
SYNTHESIS ENERGY SYS INC SYMX Utilities
TARGACEPT INC TRGT Health Care
TERRESTAR CORP TSTR Technology
THERMADYNE HLDGS CORP THMD Producer Durables
THESTREET COM TSCM Financial Services
THOMAS PROPERTIES GROUP TPGI Financial Services
TRICO MARINE SERVICES TRMA Energy
TRI-VALLEY CORP TIV Energy
TYCO ELECTRONICS LTD TEL Technology
ULTRA CLEAN HOLDINGS INC UCTT Technology
UNITED CMNTY FINL CO UCFC Financial Services
UNITED SECURITY BANC UBFO Financial Services
URANIUM RESOURCES URRE Materials & Processing
VERSO PAPER CORP VRS Materials & Processing
VISION-SCIENCES INC VSCI Health Care
VONAGE HLDGS CORP VG Utilities
W HOLDING CO INC WHI Financial Services
WABASH NATIONAL CORP WNC Producer Durables
WEST COAST BANCORP WCBO Financial Services
XERIUM TECHNOLOGIES INC XRM Materials & Processing
XOMA LTD XOMA Health Care


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Profit from a Pandemic: 30 Bullish Biotech & Drug Stocks to Watch

As stated on April 27 of this year in my blog post U.S. Futures Looking Dismal but Possible Swine Flu Profit Play, I gave you a look at how the media plays a role in helping stocks performance over a period of time. Since then the H1N1 Flu (Swine Flu) has been declared a pandemic. Although I don't expect the media to be reporting about the Swine Flu too much over the next week or two, unless something drastic happens (due to other stories that have crept up recently), this is still an issue we have to deal with, and don't think drug companies have stopped the R&D process on finding another pill.

I was doing my nightly research and I noticed an unbelievable amount of stocks from the healthcare sector (Biotech and Drugs) which have been strong the last 30 days (Swine Flu has been a popular topic in the media over the past 30 days, but note that all of the companies in this article are not trying to develop a vaccine for the Swine Flu, but are in the healthcare sector), and are still demonstrating strength on the technical level. The ratio used in evaluating these stocks is called the Bull:Bear ratio, which is defined on my blog post Bull Bear Ratio Defined. I don't like using just one piece of software so I go to another source which is Investor's Business Daily (IBD) as they give a very nice composite rating for these stocks. For details on how IBD ranks these stocks check out my blog post One of My Methods to Finding Bullish Stocks.

Company Ticker IBD Rating Bull: Bear Ratio
Abaxis Inc ABAX 83 11:1
Acorda Therapeutics Inc ACOR 49 12:0
Alexion Pharmaceuticals Inc ALXN 98 10:2
Alexza Pharmaceuticals Inc ALXA 28 10:1
Alkermes Inc ALKS 38 10:2
Auxilium Pharmaceuticals Inc AUXL 31 11:1
Avanir Pharmaceuticals Inc AVNR 92 13:0
Biovail Corp BVF 87 13:0
Celgene Corp CELG 91 11:1
Charles River Laboratories International Inc CRL 53 8:4
Chattem Inc CHTT 78 7:4
Dr Reddy Labs Depository Receipt RDY 95 13:2
Endo Pharmaceuticals Holdings Inc ENDP 78 10:1
Forest Laboratories Inc FRX 51 11:2
Gilead Sciences Inc GILD 98 9:2
Hospira Inc HSP 95 11:0
InterMune Inc ITMN 22 12:1
Ista Pharmaceuticals Inc ISTA 95 13:0
Jazz Pharmaceuticals Inc JAZZ 74 10:1
Meridian Bioscience Inc VIVO 84 10:2
Metabolix Inc MBLX 23 11:1
Momenta Pharmaceuticals Inc MNTA 19 14:1
Myriad Genetics Inc MYGN 93 10:3
Noven Pharmaceuticals Inc NOVN 98 14:0
Orexigen Therapeutics Inc OREX 58 12:1
Savient Pharmaceuticals Inc SVNT 51 12:1
United Therapeutics Corp UTHR 98 10:1
Valeant Pharmaceuticals International VRX 99 13:1
Vertex Pharmaceuticals Inc VRTX 55 13:0
Watson Pharmaceuticals Inc WPI 91 12:1


From the list above the stocks I like the most and believe have a good chance of being winners in the near future are Valeant (VRX), Noven Pharamaceuticals (NOVN), and Ista Pharmaceuticals (ISTA).

Strategies I'll be using:

Strategy #1: Valeant showed up in this list and was a stock I've been bullish on since April 27 as you can see from my blog post linked to in the first paragraph. I think this stock has some upside left and I am going to be more aggressive and speculate by being the buyer of call options on this stock. I am currently looking at the September 25 Calls which can be purchased for less than 10% the cost of the stock price at close, therefore a 10% move up in the stock will give me my money back and a return. Not to mention this stock is trading above 26 which puts this call option already in the money by $1.18 a share. This stock has nearly doubled since I first blogged about it, and it could go down just as fast. This is the reason I may be purchasing calls in the money versus the common shares of this stock. To learn more about trading options check out my E-Books.

Strategy #2: I was thinking of using the buy/write option strategy for this stock, however If I purchased the stock I am afraid I would not be able to write out any options on it, as the options on this stock are almost illiquid. For this I would use the simplest strategy of all, and buy common shares. I would look to get in on weakness though, such as a 7%-10% pull back. Once I hold the stock I will monitor the options market to see if a decent premium can be made on heavier (more liquid) options volume.

Strategy #3: ISTA more than doubled since my blog post on April 27, but is still strong in both of my ratings obtained. The stock made a new 52 week high June 25, 2009 at 4.40 before closing at $4.19 a share. This stock looks like it wants to continue the breakout, and could very well do so. I am looking to accumulate common shares of this stock, as options are not issued on this stock. Again I will look to purchase shares on weakness, such as a 7%-10%.

For your convenience, I have put together a printable list of the 30 stocks in the table ranked by Bull: Bear Ratio as well as by IBD score.

(Click images to enlarge and print)




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