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A Couple More Updates: Cel-Sci (AMEX: CVM) and CalAmp (NASDAQ: CAMP)

There's lots more action to cover from this past week, so let's get to two more of the actively traded ideas I have shared of late.
 

Cel-Sci (NYSE AMEX: CVM): The Squawking and Finger Pointing Was Inevitable

CVM, one of the hottest stocks on the AMEX this year, has come under some fire of late, and I'm not the slightest bit surprised. Whenever a stock trades like this on the promise of some high profile problem the company can "potentially" solve, someone is going to come out of the woodwork and dampen everyone's enthusiasm and cast doubt on the situation.

I published my first edition on this idea back on June 13 at $.36. Those who paid attention will recall my reasonable price target was $.75- boy, was I wrong. There was another double in the stock from there. You never know what's going to happen when these things catch fire.

The stock has been trading huge volume on the perceived potential therapy for the H1N1 virus, more commonly known as the Swine Flu. CVM's L.E.A.P.S. platform has been touted as a potential therapy for the Swine Flu, and Cel-Sci reports it has been given permission by the FDA to start a clinical trial. The exact structure of that trial is a bit murky according to some sources.

This past week Motley Fool has been duking it out with Cel-Sci's fans. Some self appointed expert at Motley Fool is panning the therapy, claiming CVM is using the story to artificially raise the price and volume of its stock. CVM has been responding with its experts, claiming the therapy does indeed have promise and merit.

In my last several editions on this company, I have been suggesting taking profits, and have my feet firmly planted in the air on the Swine Flu issue. The fact is that the author at Motley Fool does not have enough information to pass judgment on the validity of the therapy, and neither do I. Even CVM might not have enough reliable data to know what they have, which is why you do the trial.

I have pointed out the major benefit to all this volume and activity. CVM has wisely chosen to raise a ton of equity cash from its new found fame, which will allow the company to vigorously pursue Multikine, its treatment enhancing compound for head and neck cancer. The company is very nearly ready to enter Stage III clinical trials, and I believe this could hold more immediate promise for shareholders.

When you see detractors like this often times their high profile and poorly informed viewpoints are simply shills for short sellers to unwind losing positions. I don't know if it's the case here.

Again- to be clear- I have no idea if the Swine Flu therapy has any merit, and I don't believe its detractors or its cheerleaders know either. The scientists have some idea of the potential, but can't predict with any certainty where this will all come out.

I was premature suggesting taking profits, but the theme was sound. Take some or all your money off the table, and wait for the market to give up. I'm looking forward to seeing the Q3 10Q as I'd like to see how much net cash they have raised.

When all the hot money guys have given up on this one, we'll have another look as the company gets into its Phase III trial, and catch the next wave of opportunity.
 

CalAmp (NASDAQ: CAMP): Out Early With Promising Numbers

CAMP, the manufacturer of satellite TV transmission technologies and wireless data technologies, reported its Q2 numbers on Thursday after the market closed.

CAMP delivered $23 million in revs for the quarter, up 4% from the previous quarter, and ongoing losses as anticipated. However, during the quarter, CAMP was able to generate excess cash flow it used to deleverage the company and reduce outstanding long term debt by $3.6 million- down to $14.4 million.

I first recommended this one on August 21st at $2.16. The stock closed Friday at $2.87 for a net gain of 29% over this past two months. Longer term- sometime into 2010, I am forecasting $5 on this stock as the company continues to book a bunch of funny money, non cash losses over defective inventory it is repairing. I covered this in a past edition.

The stock sold off rather abruptly just after the earnings date was released, but regained all of its losses in a couple of trading days. As it turned out, that little downturn was a great buying opportunity.

The numbers the company reported were a tad shy of analyst's expectations, but the company's forecast for the remainder of this fiscal year seemed to put a charge back in the stock.

CEO Rick Gold reported CAMP is experiencing a "sharp increase in demand for satellite products", and forecast $29 to $32 million in Q3, a significant bump from the previous forecast. Gold also suggested the company would be able to report GAAP profitability in Q4.

I still like this one for $5, and believe the company's upside is not widely understood by the market. They are repairing a gigantic pile of defective parts. Once this process is completed sometime in the first half of CY '10, a big bulge of GAAP earnings will flow back to the company.

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