There was no news to directly impacting Bluelinx shares, but my best guess is that a weaker-than-expected earnings report out of homebuilder Lennar (LEN.NYSE) weighed on Bluelinx today. Bluelinx plywood, oriented strand board, rebar and remesh, lumber, and other wood products primarily used for structural support, walls, and flooring in construction projects as well as specialty construction products.

If you’re bearish on homebuilders, you NEED to be bearish on construction services names. These two sectors tend to move in tandem with each other and until the homebuilders show sustained improvement, I’ll take a pass on the construction services names.

For more on Bluelinx Holdings, go here: http://www.bluelinxco.com

The bears laid into Colorado-based Delta Petroleum after the company reported disappointing gas volume results out of the Columbia River Basin. Delta Petroleum said the six lowermost zones showed high pressure, though only fresh water flows. Other areas showed water and gas, but not enough to make the test results anything more than disappointing.

Add in the plunges in crude oil and natural gas futures and it was not the best of days to own Delta Petroleum shares. Larger names weren’t immune either as 33 of the 40 energy stocks in the S&P 500 fell today.

These are dicey times to be involved with oil and gas stocks. Until oil can stay above $75 a barrell and volatility abates somewhat, it’s too tough to make a call on the energy patch.

For more on Delta Petroleum, go here: http://www.deltapetro.com

News that Dell (DELL.NSDQ) will acquire Perot Systems for $3.9 billion jolted the stock higher. The offer represents a nearly 68% premium to Perot’s closing price on Friday and has some on the Street saying Dell is overpaying…by a lot.

Dell is trying to bolster its IT services business in the healthcare and government sectors, but may take until 2012 for the acquisition to pay dividends for the company. That’s a long time wait for a buy of this size to bear fruit. J.P. Morgan analyst Mark Moskowitz said the price is 1.4 times Perot Systems’ sales.

With today’s news, Perot Systems shares have more than doubled year-to-date, but this is more abotu Dell than it is Perot Systems.

Florida-based VeriChip said it was granted an exclusive license to patents dealing with a triage detection system for swine flu and that sparked the big rally. The company is developing the system with privately held Receptors LLC.

VeriChip said the patents can also be applied to detection systems for other viruses and biological threats. Last week, VeriChip announced plans to fund its existing partnership with Receptors to develop the virus triage detection system for the H1N1 virus, or swine flu, according to the Associated Press.

For more on Verichip, go here: http://www.verichipcorp.com

Delaware-based Dover Motorsports owns racetracks in Delaware, Missouri and Tennessee that host races for the Indy Racing League, NASCAR and the National Hot Rod Association. While there was no news to spark the sell-off in Dover Motorsports shares, it’s easy to surmise why the bears may be sinking their teeth into the stock. When the economy is bad, people simply don’t attend races the way they do when the economy is good.

Dover shares are down nearly 72% in the past 52 weeks, making this a very risky play as race attendance continues to lag. Don’t be deceived by the low price tag, either. Dover trades at nearly 47 times forward earnings, making it downright expensive.

For more on Dover Motorsports, go here: http://www.dovermotorsports.com

California-based Taitron Components discrete semiconductors, including transistors, diodes, rectifiers, and bridges; and optoelectronic devices, such as light emitting diodes, infrared sensors, and opto couplers, as well as passive devices, which include resistors, capacitors, and inductors.

What’s odd about the decline in Taitron’s shares today is that the Nasdaq was up today and technology issues have been a market leader during the recent rally. In all fairness, Taitron is up nearly 37% in the past 52 weeks, so perhaps today’s down move is just a little profit taking. Keep an eye on Taitron for Monday trade.

For more on Taitron Components, go here: http://www.taitroncomponents.com

Even on no news volume was brisk in Gray Television at nearly five times the daily average. Georgia-based Gray Television operates 36 television stations, including 17 affiliated with CBS Inc.; 10 affiliated with the National Broadcasting Company, Inc.; 8 affiliated with the American Broadcasting Company (ABC); and 1 affiliated with FOX Entertainment Group, Inc. (FOX).

As I’ve said before regarding media stocks, if you need to be involved in the sector, go for the higher quality names such as Disney (DIS.NYSE) and Viacom (VIA.NYSE). Stay away from the smaller players.

For more on Gray Television, go here: http://www.gray.tv

Even on no news, Columbia Bancorp traded more than 2 million shares, nearly 100 times the daily average. So even though there was not a news catalyst to jolt Columbia’s shares today the strong volume could be a sign of more bullish things to come for the stock.

Oregon-based Columbia Bancorp provides retail and commercial banking services to small and medium sized businesses, and individuals in Oregon and Washington. The company offers traditional banking services as well as insurance and annuity products.

I don’t want to be the bearer of bad news, but the Oregon and Washington markets are not the most vibrant right now and that could mean Columbia Bancorp’s rise today may be a one-time event. That said, these type of banks need all the pops they can get.

For more on Columbia Bancorp, go here: http://www.columbiariverbank.com

More than 152 million Synovus shares changed hands today compared with average daily trade of 6.8 million shares. Of course there was a reason for all that noise and of course it was bad news. Not surprisingly, that bad news involved a dilutive share offering which will see Synovus sell 150 million shares at $4 each.

The underwriters of the stock offering will have a 30-day option to purchase up to an addition 22.5 million shares, the company said, so the offering could wind up to be more dilutive than previously thought.

J.P. Morgan was sole book-running manager of the offering and Sandler O’Neill & Partners and SunTrust Robinson Humphrey served as co-managers, Synovus said.

If you need to invest in a regional bank, which I hope you really don’t, stay away from Synovus. Frankly, treat this stock like the Black Plague. Stay far, far away. That’ what the Street is doing.

Combining today’s losses and those of Wednesday means that eDiets.com has given back nearly all of the gains made on Tuesday. Guess what? That means there really wasn’t much to substantiate the gains in the first place and the stock has acted accordingly.

Florida-based eDiets.com offers various digital subscription-based diet plans according to an individual’s weight goals, food and cooking preferences, and related shopping lists and recipes, as well as provides subscription-based weight loss oriented meal delivery services.

For more on eDiets.com, go here: http://www.ediets.com

Chicago-based Strategic Hotels owns the fee interest in 11 hotels, comprising approximately 4,961 rooms, located in Arizona, California, Florida, Illinois, and Louisiana, and in Mexico. The company also has interest in European hotels in France, Germany and the Czech Republic.

Strategic Hotels operates hotels under the brands of Embassy Suites, Four Seasons, Hilton, Hyatt, InterContinental, Loews, Marriott, and Ritz-Carlton.

As I noted, Strategic Hotels qualifies as a REIT, which means that 90% of the company’s profits are paid out to shareholders in the form of dividends. The downside to that equation is that the REIT business is in serious trouble due to mounting debt loads and Strategic Hotels is no exception with $1.74 billion in debt and just $34 million in free cash flow.

For more on Strategic Hotels, go here: http://www.strategichotels.com

As is always the case with big moves in the biotech sector, there was a catalyst to spark the buying in Speedus shares. News that the FDA approved Signal X6 heart and lung scanner, which can take cardiac scans and transmit them through the Internet to specialists sent Speedus shares soaring.

Signal X6 is manufactured by Zargis Medical, which is majority owned by Speedus. Speedus said X6 will be available soon for delivery to the U.S. Army. Speedus is worth keeping an eye on over the next couple of days from both bearish and bullish sides.

For more on Speedus, go here: www.speedus.com

The Georgia-based company said after the close on Tuesday forecast full-year adjusted earnings of 84 cents to 90 cents per share, and revenue of $595 million to $605 million, according to the Associated Press. Analysts had been expecting Premier Global to earn $1 per share on revenue of $617 million for the year.

The lowered forecast resulted in a Northland Securities analyst downgrade of Premier Global to ”market perform” from ”outperform.” So we have a lower profit forecast and an analyst which means we have a stock that you should probably take a pass on at this point.

For on Premier Global Services, go here: http://www.premiereglobal.com

There was no news to spark the sell-off, but I might guess that it was delayed reaction to a $600,000 private placement announced by Florida-based Ediets last week. Another guess, and probably a better one, would be Ediets fell victim to some profit taking today after gaining 41% yesterday.

Ediets is down 35% in the past 52 weeks and with $14.2 million in debt and no free cash, this could be a stock the bears tag with some aplomb. Try a biotech stock at a similar price if you want some real action.

For more on Ediets, go here: http://www.ediets.com

New York-based iStar provides custom-tailored financing to high-end private and corporate owners of real estate. Its financing products include senior and mezzanine real estate debt, senior and mezzanine corporate capital, corporate net lease financing, and equity. The company is also heavily involved in the scary commercial real estate sector.

The recent market rally has led to a dash for trash in the financial sector and it appears that momentum may have found its way to iStar. Remember, iStar has $11.88 billion in debt and no free cash and that’s scary.

For more on iStar Financial, go here: http://www.istarfinancial.com

News that Keryx’s cancer drug Perifosine will get orphan drug status from the FDA sent the bulls running into the stock. Orphan drug status is given to drugs aimed at rare conditions or conditions that have a lack of treatments on the market, according to the Associated Press.

Orphan drug status is huge for a small company like Keryx as it means seven years of market exculusivity for Perifosine and assistance in clinical trials. Keryx would also be subject to reduced user fees and tax credits.

Although Keryx has more than quardupled in the past 52 weeks, today’s news says there’s more room to run in the stock, so put Keryx on your watchlist.

For more on Keryx, go here: http://www.keryx.com

California-based Quicksilver was done in by a dour fiscal third-quarter earnings report that saw profits fall by 53% and sales slump by 11%. Unfortunately for Quicksilver, back-to-school sales won’t juice sales the way investors may have hoped. A report by Wedbush Morgan today said back-to-school sales may fall short of expectations, impacting retailers of all stripes.

Robert W. Baird analyst Mitch Kummetz cut his price target on Quicksilver to $1 from $3 while keeping a "neutral" on the shares. With parents and teens spending less on back-to-school this year, apparel retailers are dicey bet. If you need to be involved in the sector, go with the best of breed and that would be Aeropostale (ARO.NYSE).

For more on Quicksilver, go here: http://www.quiksilver.com

Not surprisingly, volume was downright insane at more than 30 times the daily average on news that Array’s arthritis drug failed to meet the main goal of a mid-stage trial. In biotech parlance, this was terrible news.

The company said the study examining ARRY-162, the arthritis treatment, showed that patients with rheumatoid arthritis were not completely responsive to the drug, according to Fox Business News.

The failed trial led to three analyst downgrades and two price target cuts. Boenning & Scattergood pared its rating on Array to "neutral" from "outperform" while Robert W. Baird did the same while lowering its price target to $3 from $10 a share. Leerink Swan cut its rating on Array to "market perform" from "outperform" and reduced its price target to $2 from $6.

All I can say is yikes. Array BioPharma may be worth keeping an eye on simply for a rebound or any good news, but both scenarios may a long way off.

For more on Array BioPharma, go here: http://www.arraybiopharma.com/

Esterline isn’t a name that gets a lot of media attention, but perhaps it should. After the close yesterday, Esterline said fiscal third-quarter net income was $32.6 million, or $1.09 per share, up 59 percent from $20.5 million, or 68 cents per share, in the same period last year, according to the Associated Press.

Esterline followed that up by raising 2009 guidance to between $3.10 per share and $3.30 per share, from its previous estimate of $3 per share to $3.20 per share. The Street just loves it when companies raise their earnings guidance and though it’s not a frequent event in the current environment, the market rewards companies that do see brighter times ahead. Case and point: Esterline Technologies.

The balance sheet is in decent condition as well with $528.4 million in long-term debt, but $104.6 million in free cash. Esterline looks like a safe bet for long-term investors at this point.

For more on Esterline Technologies, go here: http://www.esterline.com

News that Biogen Idec (BIIB.NSDQ) will purchase Facet for $356.1 million in a deal that values Facet at $14.50 a share. What’s odd about this marriage is that Biogen was publicly critical of Facet’s partnership with Trubion Pharmaceuticals (TRBN.NSDQ) on a leukemia drug. Biogen said Facet’s partnership with Trubion reduced the value of the takeover.

Biogen and Facet have been working together since 2005 to develop the cancer drug candidate volociximab and the multiple sclerosis drug daclizumab, according to the Associated Press. Biogen said it would not have to borrow any cash to get the deal done.

Merger and acquisition activity looks to be picking up and the biotech is load with ready buyers and sellers. I doubt this is the last we’ve heard on the biotech M&A front. In fact, today’s deal could portend larger deals to come.

For more on Facet Biotech, go here: http://www.facetbiotech.com

Even when there’s good news, the shares rise for a day and then get hammered, giving back all the gains and more. Yesterday, Vongage said Apple (AAPL.NSDQ) approved the Vongage iPhone app, which is a pretty big deal.

What happened today? Vonage got whacked, falling 23 cents, or 13.5%, to $1.48, making the stock the biggest loser on the New York Stock Exchange. Volume was robust at nearly five times the daily average. The stock is down about 40% in the past few days and last week’s positive news about Google (GOOG.NSDQ) possibly expressing in the Voice Over Internet Protocol (VOIP) technology that Vonage pioneered seems like a distant memory.

Vonage is a company that just can’t seem to get out of its own way. In addition, Vonage faces stiff competition from big, better-capitalized rivals. Stay far away from this stock.

To spark a sell-off like this there had to be a negative catalyst and there was. The bears jumped on Amedisys on news that the company’s Chief Operating Officer Larry Graham resigned over differences related to the company’s timeline for Graham to takeover as chief executive officer. Basically what I’m saying is that Graham wanted to become CEO sooner than the board of directors wanted him to assume the top spot.

Amedisys said that Graham’s duties will be temporarily assumed by CEO William Borne. The home healthcare and hospice services provider said Chief Information Officer Alice Ann Schwartz also resigned to pursue other opportunities, according to Reuters.

I guess it’s nice to see the big companies can fight like a bunch of little kids, but something worries me about a stock falling more than $9 just because a couple of executives are leaving. Reading the tea leaves here, Amedisys might not be the best place for your money at this point.

For more on Amedisys, go here: http://www.amedisys.com

Georgia-based Oxford Industries said second-quarter profit fell 64% to $533,000 and earnings of 3 cents a share, compared with net income of $1.5 million and earnings of 9 cents a share in the second quarter of 2008. Second-quarter sales were down about 16 percent to $192.9 million.

This dour news was outweighed by KeyBanc Capital Markets analyst upgrade of Oxford shares to "buy" from "hold." KeyBanc gave Oxford shares a price target of $18, which is to say there isn’t a lot of room left to run in the stock from current levels. I find it odd that an analyst upgrade from second-tier brokerage moved the stock more than the glum earnings did, but that’s life in the stock market.

For more on Oxford Industries, go here: http://www.oxfordinc.com

Investors obviously shrugged off yesterday’s news that Imperial Industries has asked for a second forebearance on a credit facility and that it must reduce the credit line during September to have continued access to capital.

Florida-based Imperial Industries engages in the manufacture and distribution of building materials to dealers and others located primarily in Florida, Mississippi, and Louisiana. The company makes products such as exterior and interior finishing wall coatings and mortar products for the construction industry, as well as purchases and resells building materials from other manufacturers.

The exposure to real estate in a market like Florida makes Imperial Industries an extremely risky play at this point, today’s gain aside. Focus on yesterday’s news and take a pass on the stock.

For more on Imperial Industries, go here: http://www.imperialindustries.com

DHT fell $1.08, or 21%, to $4 today, making the stock the biggest loser on the New York Stock Exchange. Volume was robust at more than 13 times the daily average. A dour second-quarter earnings report led to the decline.

DHT posted a second-quarter profit of  $5 million, or 10 cents a share, compared to a profit of $10.3 million, or 29 cents a share, a year earlier. That’s good for a 51% tumble and a miss of analyst estimates of 16 cents a share.

The company’s announcement that its dividend is now subject to quarterly reviews didn’t help the shares today. Jefferies & Company Inc. said in a research note that it was reiterating its "Buy" rating on DHT Maritime’s stock, but that it was lowering its price target, according to the Associated Press.

DHT sports a dividend yield of over 19%, which is dangerously high, and the company’s balance sheet shows almost $343 million in debt and and just $48.5 million in free cash so there is cause for concern regarding the dividend.

For more on DHT Maritime, go here: http://www.dhtmaritime.com

The sell-off in Imperial Industries came on news that the company entered into a second amendment to a forebearance agreement with its commercial lender to extend the terms of a credit facility. The amendment allows for continued funding of Imperial’s credit facility if the company reduces its existing $500,000 credit line during September.

Translation: Imperial Industries is not the most well-capitalized company on the Street and it is obviously facing some financing problems. That’s a big deal in this environment and that makes it hard to be bullish on the shares.

For more on Imperial Industries, go here: http://www.imperialindustries.com

As you probably know, there has been a mad dash for trash in the financial sector lately with names like AIG (AIG.NYSE) and Fannie Mae (FNM.NYSE) becoming favorite targets of day-traders. Perhaps there has been a trickle-down effect to names like Vestin Realty Mortgage.

Nevada-based Vestin Realty Mortgage invests in loans secured by real estate through deeds of trust or mortgages in the United States. It invests in raw and unimproved land, acquisition and development, construction, commercial, residential, and bridge loans.

The company operates primarily in Arizona, California, Hawaii, Nevada, New York, North Carolina, Oklahoma, Oregon, Texas, Washington, and Wisconsin.

Obviously, on a regional basis, Vestin Realty is well diversified, but the mortgage space is still a dangerous place to play right. This stock is nothing more than a trade at this point.

For more on Vestin Realty Mortgage, go here: http://www.vestinfunds.com

K-V encountered some problems earlier this year after the the U.S. Department of Justice sued the drugmaker to block it from making and distributing adulterated and unapproved drugs, after an inspection by the FDA found the company had violated manufacturing guidelines and continued to manufacture unapproved drugs, according to Reuters.

K-V has been working to rectify that situation and its plan to address the problems was accepted by the FDA today, leading to the pop in the shares. The company has started rehiring some workers in anticipation of a restart in production. The FDA will reinspect K-V’s factories later this year.

For more on K-V Pharmaceuticals, go here: http://finance.yahoo.com/q?s=KV-A

I’m going to blog about the second-biggest loser, which was embattled insurance firm American International Group (AIG.NYSE), which followed up yesterday’s 10% loss by losing nearly 21% today.

AIG has been benefiting from short-covering and a dash for trash that has seen momentum traders lift the shares of downtrodden financials like AIG, Fannie Mae (FNM.NYSE) and Freddie Mac (FRE.NYSE). The market basically thinks the latter two are worthless and AIG is darn close. All three owe Uncle Sam tens of billions of dollars in bailout loans and fundamentally, their businesses stink,

AIG had soared from under $9 after a reverse stock spilt to over $55 before the bears started have their way yesterday. Now the shares have broken support at $40 and the chart screams more pain is on the way. AIG shares are hard to borrow for short sales, so it might be time to look at some puts. Either way, don’t buy this stock as a long-term portfolio addition.

News that Acadia’s drug candidate pimavanserin failed to meet key treatment goals in a late-stage study focusing on patients with Parkinson’s disease psychosis led to the stock’s tumble today. Nearly 1.5 million Americans suffer from Parkinson’s disease, so the potential is there for Acadia to make some nice profits if it can get going in the right direction.

The Street may not be willing to wait around. Citigroup analyst Dr. Lucy Lu downgraded shares of Acadia to "Sell" from "Hold" and reduced her price target to $1.50 from $4.50, citing the study failure. She said slashed 2011 revenue estimates to $8.4 million from $23.3 million and 2012 estimates to $7.6 million from $46.3 million, according to the Associated Press.

For more on Acadia Pharamceuticals, go here: http://www.acadia-pharm.com

This is a prime example of how weak the market was today. Of all the stocks that trade on the NYSE, something in the order of 3,000 (or more), Cenveo is the top gainer. That’s kind of  a sad commentary that the best the market could offer up is this stock.

Paper stocks have been decimated over the past year, but to its credit, Cenveo has nearly quadruple off its March low. In addition, the stock popped through an important resistance level at $5.25 today.

I’m certainly bullish on the paper sector, but Cenveo is looking like it be a good short-term trade. At least that’s what the charts are saying.

For more on Cenveo, go here: http://www.mail-well.com

The strong volume and price actkion in US Energy today were impressive for a number of reasons, not the least of which was the fact that there was no news out on the company to spark the bullish move. In addition, the broader market took a big hit today. And of course we cannot forget that commodities have been taking it onthe chin for the past few sessions and US Energy is directly involved in that sector.

Wyoming-based US Energy engages in the acquisition, exploration, holding, sale, and/or development of mineral properties. Its principal mineral interests are in molybdenum, base, and precious metals.

Lest we forget that US Energy also has exposure to oil and natural gas and that makes today’s rise even more impressive given the declines in those two commodities. US Energy is obviously showing some signs of strength and I can’t argue with that.

For more on US Energy, go here: http://www.usnrg.com

Rhode Island-based LIN TV operates as a local television and digital media company, owning and/or operating 27 television stations in 17 U.S. markets, all of which are affiliated with a national broadcast network.

I’ve talked at length about the problems facing traditional media companies such as newspaper publishers and local TV station operators like LIN. Not to be smug, but I’m surprised LIN TV is still a public company. Stay away from the shares.

For more on LIN TV, go here: http://www.lintv.com

Oddly enough, Keycorp upgraded several Cost Plus rivals today, but Cost Plus was left out of the equation. Even downtrodden competitor Pier One (PIR.NYSE) received an upgrade while Cost Plus was passed over.

One thing is certain and that is home furnishings is a tough business to be in right and Cost Plus’s most recent earnings report tells as us (read my post from Friday for more info). Another think I know: If Pier One beats a stock to an upgrade it’s time to sell that stock.

For more on Cost Plus, go here: http://www.costplus.com

Disney may be overpaying as the price tag values Marvel at 37 times its estimated 2009 earnings, and offers shareholders a 29% premium to Friday’s closing price. Marvel is a lucrative franchise to be sure and Disney knows this.

The realease of the Iron Man sequel and the fourth Spiderman movie along with the Avengers over the next couple of years is sure to boost profits for Mickey Mouse. Disney also gets access to over 5,000 Marvel and the lucrative marketing and merchandising rights that have been a huge source of sales for Marvel.

This is a short-term win for Marvel and long-term win for Disney and that’s a nice compromise. Disney actually looks cheap right now at just 14 times forward earnings.

In addition to textbookls, New Jersey-based Peoples Educational produces state-customized, print and electronic test preparation, assessment materials, print work texts, and print and Web-based delivered assessments. The company also distributes and publishes instructional materials for high schools honors, college preparation, and advanced placement courses.

The company has $13.9 million in debt and $6.71 million in free cash flow, so the balance sheet is fair and the stock could be a decent play if  education spending becomes a Congressional priority again.

For more on Peoples Educational Holdings, go here: http://www.peoplespublishing.com

A weak second-quarter earnings report spurred the bears today in Cost Plus. California-based Cost Plus said late Thursday its loss narrowed to $20.8 million in the fiscal second quarter, but added that it expects a third-quarter loss of $19 million to $24 million, compared with a loss of $21 million in the prior year.

As of January 31, 2009, the company operated 296 stores in 33 states under the names World Market, Cost Plus World Market, Cost Plus Imports, and World Market Stores.

As I’ve noted several times in the past, the current economic environment is challenging to say the least for retailers of all stripes. Cost Plus is no exception. That said, current valuation makes me think there could be some near-term upside to Cost Plus shares.

For more on Cost Plus, go here: http://www.costplus.com

When I mentioned Vonage earlier this week it was on news that Google (GOOG.NSDQ) will introduce a new voice communications platform that may use Voice Over Internet Protocol (VOIP) technology that Vonage brought to the forefront of telecom technology.

Before today, Vonage shares had surged five-fold in the span of less than a week, so some profit-taking was to be expected. Additionally, I did caution investors that Vonage still faces significant hurdles in the form of competition from major telecom carriers and almost $225 million in debt doesn’t help matters.

The Google news may eventually prove to be bullish for Vonage, but the stock still has some issues to work through. Remember Vonage has been a public company for more than three years and never traded above its $17 IPO price.

For more on Vonage, go here: http://www.vonage.com

Investors should note that Culp was rising ahead of Monday’s earnings report, so it’s possible that the Street is expecting good things. Either that or the smart money is preparing to sell into the news. The Street expects Culp to earn 12 cents a share on sales of $44.9 million.

The textile industry has been hit hard by foreign competitors and the weak economy, so any good news from Culp could be a welcome respite for investors in the sector. North Carolina-based Culp makes fabric and upholstery for furniture.

For more on Culp, go here: http://www.culpinc.com

As is usually the case when a biotech stock pops or drops, there was a news catalyst to spark trade in Trubion Pharmaceuticals. Trubion signed an agreement to with Facet Biotech to market Trubion’s leukemia drug that could be worth up to $196 million.

Under the terms of the agreement, Trubion will get $20 million upfront from Facet and may get up to $176 million more for the worldwide development and commercialization of its chronic lymphocytic leukemia (CLL) drug if certain development, regulatory and sales milestones are met, according to press reports.

This is certainly bullish news for Trubion and bodes for the company’s long-term prospects. That said, the Washington-based company needed the cash as it has $8.88 million in debt and negative free cash flow.

For more on Trubion Pharmaceuticals, go here: http://www.trubion.com

News that NCI will commence a dilutive debt exchange offer rocked the stock today. The company said it plans to launch the exchange offer on Friday, under amended terms that would see private equity firm Clayton, Dubilier & Rice Inc. take a 68.5 percent stake in NCI for $250 million in newly issued convertible participating preferred shares, according to the Associated Press.

Existing noteholders will get $500 in cash and 390 shares of NCI stock and that will dilute current shareholders. The Texas-based company is trying to reduce its $476 million debt load by $323 million.

An admirable move to be sure, but the Street just hates these dilutive share offerings. In addition, NCI’s exposure to commercial real estate makes it difficult to get bullish on the stock. You want to talk about toxic? That’s anything related to commercial real estate.

For more on NCI Building Systems, go here: http://www.ncilp.com

The bears got into Nextwave Wireless in a big wave after Skymark Research issued a massive 74-page report on the company. That’s a hefty report that’s as small as Nextwave and I have to confess I have not read the report in its entirety. The report did illuminate me to the fact that Nextwave retained Canacord Adams to explore strategic alternatives for some of its businesses earlier this year.

Before today’s decline, California-based Nextwave was up 53% in the past 52 weeks and trading at nearly 2.5 times sales, the company appeared a wee bit overvalued. Not to mention the company is suffocating under more than $692 million in debt. That’s too much for my tastes.

For more on Nextwave Wireless, go here: http://www.nextwave.com

Today’s example of financial rot turning to gold for a day at least, is embattled bond insurer Ambac Financial (ABK.NYSE), which rose 57 cents, or 46%, to $1.80, making it the biggest NYSE gainer. Volume was robust at more than 11 times the daily average.

There was no news to spark the rally in Ambac’s shares today. As I said, it’s a momentum play. In fact, two weeks ago today press reports said Ambac and its primary rival MBIA (MBI.NYSE) are facing severe liquidity problems that will impair their capital positions. The reports also noted the companies have had to put new business plans on hold as a result.

Unless you’re a day trader, stay away from these stocks. Ambac and MBI have very few merits as long-term investments.

For more on Ambac, go here: http://www.ambac.com

Actually, the aforementioned earnings report is now 10 days old, but in a search for catalyst to explain the pop in Peoples Educational Holdings today I could find nothing else. Even that report wasn’t all that great, but the company did reduce its debt load by $2.2 million and the Street loves to see that.

New Jersey-based Peoples Educational Holdings publishes and markets supplementary educational textbooks and materials for K–12 school market in the United States. Publishers of all stripes have faced some steady headwinds since the recession tipped off in 2007. That said, if Peoples Educational can make it’s way above resistance at $2.75, it could be a buy.

For more on Peoples Educational Holdings, go here: http://www.peoplespublishing.com

Florida-based Dycom committed a cardinal sin by guiding lower on its fiscal first quarter revenue estimates. Dycom told analysts that it anticipates first-quarter revenue will be flat to down. Analysts polled by Thomson Reuters are looking for higher revenue of $284.5 million.

That’s not news the Street wants to hear, especially in this era of company’s cutting costs, not increasing sales, to meet or beat analyst estimates. The news was especially disappointing considering that only yesterday Dycom said its fiscal fourth-quarter profit doubled.

Dycom is down about 15% in the past 52 weeks. The company $136.9 million in debt, but its free cash flow is strong at $71.7 million. Dycom could be a good long-term play once it starts boosting the top line again.

For more on Dycom Industries, go here: http://www.dycomind.com

So what’s confusing about this drop in CAS Medical shares? The FDA approved a labeling expansion for its FORE-SIGHT Cerebral Oximeter so it can be used on all patients, including infants that weigh less than 2.5 kilograms, according to the Associated Press.

Typically, FDA approvals spark rallies in medical device stocks like CAS Medical, so this decline is puzzling. The stock traded between $2.01 and $2.45 today, a pretty wide range for a stock that is so lowly priced. I’d be cautious on any stock that falls on good news, though CAS Medical obviously has a compelling long-term story given today’s FDA approval.

For more on CAS Medical, go here: http://www.casmed.com

Vonage Holdings touched a 52-week high of $2.63 today before peeling back on news of Google’s (GOOG.NSDQ) interest in Voice over Internet Protocol, the telecom technology Vonage is a main propreitor of. Google’s Voice application is seen as a catalyst to raise competition for mobile phone customers and that spark interest in Vonage technology.

Vonage is still far below its May 2006 IPO price of $17, but renwed interest in VOIP could possibly spark takeover chatter involving the company. A common thesis surrounding Vonage has been that it needs a larger telecom rival to eventually buy the company.

Vonage was one of the first company’s to offer Internet-based voice services and the company even reported its first quarterly profit earlier this month, but Vonage still faces significant challenges from a weak economy and competition from rivals.

Today’s move in Vonage is a testament to what a market mover Google is, but vonage is definitely worth keeping an eye on at this point.

While Patriot National’s loan portfolio includes commercial mortgage and construction loans, working capital loans, and equipment loans. Patriot National Bancorp also offers commercial real estate and construction loans to area businesses and developers; real estate loans, including home mortgages, home improvement loans and home equity loans, the company appears to be one of the smallcap regional banks that is likely to survive the maelstrom facing the sector.

That’s probably due to the fact the Connecticut has not seen the foreclosure problems that have stymied real estate markets from Florida to California. Investors are seeking out high-quality financial names and if Patrio National fits the bill, the market will reward the stock. And hey, the shares yield 6.9% right now, so it is a dividend play as well.

For more on Patriot National Bancorp, go here: http://www.pnbdirect.com

Noah Education reported some disappointing second-quarter earnings results and that was the bearish catalyst that sent the shares lower today. The report was fairly difficult to decipher, but I was able to discern that sales rose 21.6% to $17.4 million, but net income fell 41% to $2.6 million. Don’t even ask about EPS numbers because the company reported those in Chinese yuan.

This may be one quarter of weakness for Noah and with its access to online education and the Chinese market, the long-term story appears fairly compelling. Not to mention China stocks have been on a tear recently. It’s probably safe to start a small position in Noah Education on today’s pullback.

For more on Noah Education Holdings, go here: http://www.noahtech.com.cn

California-based eON Communications offers integrated voice mail, unified messaging, and fax messaging services, as well as an array of advanced desktop telephones to employees for information access. So we can surmise that eON’s bottom line is held hostage by corporate information technology spending, which has been weak in the wake of the recent recession.

Making eON a tough play at this point is $4.57 million in debt and no free cash flow. That debt is actually  more than 25% higher than eON’s paltry market cap which is barely above $3 million. I don’t see the Street getting excited about this stock anytime in the near-term.

For more on eON Communications, go here: http://www.eoncc.com

There was no news directly impacting Reddy Ice today, but one guess as to why the bulls were running the show may be further reaction to last week’s news that Reddy Ice’s chief executive officer and chief financial officer will be buying some shares of the company.

That said, the stock did pop on that news last week. It was worth noting that Reddy Ice has $390.6 million in debt and just $4.68 million in free cash. How a company that makes ice has that much debt is anyone’s guess. Reddy Ice may be due for a little pullback, but it should find support at $4.75.

For more on Reddy Ice, go here: http://www.reddyice.com/

News that Willdan received a $68 million contract from electric utility giant Consolidated Edison sent the bulls running into Willdan shares. The amount of that contract is nearly equal to California-based Willdan’s 2008 revenue of $73.2 million.

Willdan Energy Solutions will implement the program for small business customers. Through the program, ConEd will offer free energy surveys and payment of some costs related to installing energy-saving devices, according to the Associated Press.

This is extremely bullish news for Willdan, which is down 53% in the past 52 weeks. The stock still appears reasonable at these levels, though it is worth noting the shares traded as high as $5.25 today before pulling back today.

For more on Willdan Group, go here: http://www.willdangroup.com

The decline in Torch Energy was somewhat odd considering that crude oil was up on the day. Torch Energy holds net profits interests, to receive payments from Torch Royalty Company and Velasco Gas Company, Ltd.

Royalty trusts like Torch are interesting investment opportunities for income seeking investors and they don’t get a lot of press. Due to their corporate structure, royalty trusts pay out at least 90% of their income to shareholders in the form of dividends. In the case of Torch, that rate is 95%.

Royalty trusts normally have high pay outs and dividend yields and Torch is no exception, paying out $1.40 a share while yielding 17%. Another advantage of royalty trusts includes the fact that distribution and depletion costs are passed onto the investor which essentially means they get a tax deduction.

For more on Torch Energy, go here: http://www.torchroyalty.com

Nobility Homes may be an anomaly among the homebuilders because the sector has been showing some strength lately. Despite the fact that there was no news on Florida-based Nobility, the decline isn’t without explanation.

After all, Nobility Homes is based in Florida and makes manufactured homes there. We could argue back and forth about what state has a worse real estate market, California or Florida, but the fact remains both stink and that will hamper Nobility’s share price. The brigh side for Nobility? It has no debt, believe it or not.

For more on Nobility Homes, go here: http://www.nobilityhomes.com

All the activity surrounding Fannie Mae and kissing cousing Freddie Mac (FRE.NYSE) has been odd considering both companies are essentially worthless on an equity basis and both owe the federal government $15 billion each. That said, Freddie has nearly tripled in the past month and Fannie has more than doubled.

Let’s not ignore the fact that Morningstar has a price target of ZERO on both stocks. These aren’t long-term investments. They’re not even swing trades. These are just day trades, so unless you’re an intraday trader, stay away from Fannie and Freddie.

You know what I always say about strong bullish moves accompanied by strong volume. It’s a good sign, especially since there was no direct news catalyst to impact Mercer International.

Paper stocks have taken their fair share of punishment over the past year or so and Mercer International is no exception, down 57% in that time span. That’s triple the decline for the S&P 500 in the same time frame. All of that said, Mercer shares have nearly doubled in the past few weeks, so maybe this market rally is encompassing beaten down paper names as well.

For more on Mercer International, go here: http://www.mercerint.com

There was no news impacting the stock today, but it is worth noting that big pharma stocks haven’t really participated in the recent market rally, so it’s hard to get bullish on smaller players like Quigley.

Looking at Quigley’s chart, the stock failed miserably above $3 and will likely find support at a downward trendline that rests at $1.75. If the shares fell to that level and no further, then a bounce higher is possible. However, if Quigley violates $1.75, I’d stay away.

For more on Quigley, go here: http://www.quigleyco.com

As I mentioned yesterday a righs offering that will see BankAtlantic sell $100 million in stock at $2 a share is the catalyst behind the bearish move. What this means is that the bank can’t find buyers for the shares at $4. At least no new institutional buyers because the rights offering is aimed at only current shareholders.

Knowing that, there is no reason for to pay more than $4 for BankAtlantic stock. Heck, there really isn’t a reason to pay more than $2.

For more on BankAtlantic, go here: http://www.bankatlantic.com

Sterling said after the market close on Wednesday that its second-quarter loss more than doubled to $946,000, or 16 cents per share, in the second quarter, compared to a loss of $400,000, or 7 cents per share, in the same period a year ago. The company has lost almost $1.4 million this year and has reported losses in five of the last six quarters.

Sterling set aside $7 million for bad loans in the second quarter compared to less than $3 million in the comparable period a year earlier. And yet the stock was the best performer on the Nasdaq today. Go figure. Sterling said the loan weakness is due to problems in commercial real estate, something I’ve mentioned before as a reason to stay away from select bank stocks.

There’s no reason to take a gamble on Sterling Bank, even at just $1.50.

For more on Sterling Bank, go here: http://www.sterlingnj.com/

The catalyst was the fact that the Department of Transportation cleared ExpressJet in any wrong doing related to the now infamous  flight earlier this month that was held on a Minnesota airport tarmac for 14 hours. ExpressJet was operating the flight on behalf of Continental Airlines (CAL.NYSE).

Rather, the blame, accordingly to DoT, lies with Mesabe Airlines, a unit of Delta (DAL.NYSE), the largest airline in the world. Mesaba employees refused to allow the ExpressJet plane to come back to the terminal after it couldn’t take off due to bad weather because the airport was closed and no Transportation Security Administration employees were on duty.

Before I get too carried away, it is important to mention that after the close Thursday, ExpressJet added $10 million to a buyback program that had $5.5 million left as of July. This is why you have to watch buyback news. ExpressJet obviously new that it would get a favorable DoT ruling today and announcing the buyback addition yesterday was a smart move.

I’m not a fan of investing in airlines. Just look at what an airline did to Gordon Gekko in "Wall Street." And hey, in real life, airlines are a tough place to park your money. That said, ExpressJet may be worth a small position here.

While Florida is known for its sunny days and pleasant climate, the climate for banks of all sizes operating in the Sunshine State has been cold to say the least. Florida has one of the highest foreclosure rates in the country and home values there have plummeted over the past 18 months.

I’ve also talked about the need for capital that many smallcap banks currently have and the lengths they’ll go to get it. Case and point BankAtlantic. The company is going to sell $100 million worth of stock at $2 a share. That’s obviously well below today’s closing and a sign the company is desperate for cash. The rights offering is being to current BankAtlantic shareholders.

At $5.53 a share, BankAtlantic is not cheap. It’s risky. If you want to get into a bank stock for a similar price, try Citigroup (C.NYSE).

For more on Bank Atlantic, go here: http://www.bankatlantic.com

Sellers hammered Cerus a day after the company announced bullish news, saying that  a Swiss regulatory agency approved the use of blood platelets treated with Cerus’s Intercept Blood System, which is intended to turn off viruses and other particles in donated blood, according to the Associated Press.

Today’s down move may have profit taking to blame, but more than likely it was news that California-based Cerus plans to sell $12.2 million in stocks and warrants through a dilutive offering. The transaction is expected to close on August 25.

The capital raise is interesting considering Cerus has no debt. Then again, it has no free cash flow so it needs cash from somewhere. The overall them with Cerus appears somewhat bullish, so today’s pullback may be a buying opportunity.

For more on Cerus, go here: http://www.cerus.com

As of December 31, 2008, Interstate Hotels & Resorts and its affiliates managed 226 hotel properties with 46,448 rooms in North America and internationally. As of December 31, 2008, it owned 7 hotels with 2,051 rooms; and held non-controlling equity interests in 18 joint ventures, which owned or held ownership interests in 50 of its managed properties.

Buyers ran into Interstate Hotels shares after the company reported a second-quarter loss of $6.7 million, or 21 cents a share, yesterday after the close. That compares with a profit of $100,000, or 1 cent a share, earned in the year-earlier period. However, excluding one time items, Interstate Hotels earned 2 cents a share.

Hotel stocks have battered over the past year, but if you look at stocks like Expedia (EXPE.NSDQ) and Priceline (PCLN.NSDQ), there might be some positive signs starting to emerge from the travel sector and that would benefit the likes of Interstate Hotels. For less than two bucks, Interstate could be worth a small speculative stake.

For more on Interstate Hotels & Resorts, go here: http://www.ihrco.com

The rally was sparked by news that the FDA approved Anika’s drug to treat knee ailments a day after rival Q-Med (QMED.NSDQ) had a similar treatment rejected by the FDA. Anika also said its Monovisc injection for the treatment of osteoarthritis of the knee was approved by Canadian health regulators.

Susquehanna Financial analyst David Turkaly said Anika stands to benefit from both its drug being approved and Q-Med’s treatment being rejected. Anika expects to start selling Monovisc in Canada within a month and expects to deliver final data on the drug to the FDA by the end of this year.

Monovisc has been availalbe in the European Union since last year and if it can wide acceptance in the US, Anika would certainly stand to benefit. The biotech sector is full of smallcap names worth watching and Anika should certainly be added to that list.

For more on Anika Therapeutics, go here: http://www.anikatherapeutics.com

There was no news to prompt the sell-off in Irwin Financial, but it is worth noting that it was a tough day for finanicals as both the KBW Bank Index (BKX.NYSE), which tracks the 24 largest US banks, and the Financial Select SPDR ETF (XLF.NYSE) both declined on the day.

Irwin Financial has nearly $570 million in debt and with no free cash flow, that debt load is extremely concerning. If you’re intent on playing the regional banks, go for a bigger name like BB&T (BBT.NYSE) or Cullen Frost (CFR.NYSE).

For more on Irwin Financial, go here: http://www.irwinfinancial.com

The stock tumbled 27 cents, or 26%, to 78 cents today to again win the dubious distinctio as the Nasdaq’s biggest loser. As I mentioned earlier this week, WGNB has for all intents and purposes been taken over by the Federal Reserve and has 60 days to submit a capital raising plan.

The bank’s ability to raise capital appears grim at this point and WGNB has been ordered by the Fed to stop paying dividends. To make matters worse, WGNB will delist its shares from the Nasdaq, making a capital raise even more difficult.

It’s safe to say this stock has been left for dead and you should just leave it alone.

As I said, there was no news to spark this kind of buying in Reddy Ice, but I took a look at the chart and it is worth noting that the shares have soared past an important resistance point $2.90 and there isn’t much in the way of resistance looming ahead.

Reddy Ice may be trading exclusive of its fundamentals given that its balance sheet is loaded with more than $390 million in debt and less than $5 million in free cash flow. In other words, buying the stock means you’ll be speculating on ice demand. Unfortunately, there are no ice futures to track to watch said demand.

For more on Reddy Ice, go here: http://www.reddyice.com

The FDA approved EDAP’s ultrasound device used to dissolve kidney stones and that led to the bull run in the shares. The device has been used in Europe since 2007, though there is no set date for its US release.

EDAP makes other products to treat urological diseases and prostate cancer. This certainly bullish news for a stock many US investors may not be familiar and EDAP could be worth a small speculative play at these levels.

For more on EDAP, go here: http://www.edap-tms.com

Simcere said higher costs and weaker sales, a toxic combination, helped shrink second-quarter profits by 61%. The company earned $5.4 million, or 9 cents a share, compared with $13.9 million a year earlier as sales slumped to $62.1 million from $63.9 million.

Simcere said sales of its generic drugs, along with its cancer drug Endu, fell short of expectations. In an environment that should be favorable to pharma companies, Simcere reported disappointing results and now Chinese stocks look to be topped out, so this would be an extremely speculative play at this point.

For more on Simcere Pharmaceutical, go here: http://www.simcere.com

WGNB shares fell 24 cents, almost 19%, to $1.05 today, making the stock the biggest loser on the Nasdaq. Volume was more than 15 times the daily average.

The Federal Reserve said on Tuesday that it has put WGNB on its watch list for banks that need to raise more capital and ordered the company to halt divided payments. WGNB must also submit a capital raising plan to the Fed within 60 days.

Today’s bad news comes on the heels of last week’s announcment that WGNB, with $848 million in assets, will voluntarily delist its shares from the Nasdaq. WGNB also has $62.8 million in debt and no free cash flow. It’s safe to say there’s nothing bullish about WGNB at this point.

For more on WGNB, go here: http://www.wgnb.com

I thought something might be afoot when I saw some active call buying in Huron options recently and that suspicion was affirmed today when Huron shares surged $5.15, or almost 38%, to $18.84, making the stock the biggest gainer on the Nasdaq. Volume was strong at more than 12 times the daily average.

The bulls got involved in Huron shares today after the company’s second-quarter earnings report topped Street estimates and today’s gains helped erase part of the 70% plunge the stock suffered earlier this month when the company said it would restate earnings for 2006-2008 after company executives were improplerly compensated for acquisitions Huron made. The announcement led to the departure of several top Huron executives.

Huron said after the close Monday that net income for the second quarter was $9.6 million, or 47 cents per share, compared with $1.1 million, or 6 cents per share, in the same period a year ago

Huron was also bolstered by an SEC announcement that no further restatements would be necessary and that may have prompted a lot of short covering rather than actual buying of the shares from the long side.

Today’s move was a good start, but Huron still faces significant hurdles before it earns back investors’ trust. If you’re intent on being involved with the stock, it might be best to do so with options to keep your cost basis low.

Not to mention GM and Chrysler are American Axle’s two biggest customers, so I wondered what was the case for a bullish play in the shares. I shrugged off the theory that American Axle couldn’t fall any further and thought that it would actually go to zero or pretty darn close.

All that aside, American Axle more than doubled today, soaring $3.08, or 118%, to $5.70, making the stock the biggest gainer on the New York Exchange. Volume was robust at more than 13 times the daily average.

American Axle negotiated an extension of its credit facility that was coming due this Thursday. The new deadline is August 31. The company said it reached an agreement in principle in which GM will pay $110 million to cover several expenses, including cure costs associated with contracts assumed or terminated by the automaker during its Chapter 11 bankruptcy filing, according to the Associated Press.

This is all fine news for American Axle and if you ignored me and bought the shares recently, kudos to you. I’m still not convinced it’s a good long-term bet, but American Axle does look like a great trade at this point.

Rosetta Stone had been one of the hottest IPOs to come to market this year in what has been a fairly weak climate for new issues and the company’s brand name is one that legions of investors are familiar with due to all the commercials Rosetta Stone runs on CNBC.

Rosetta Stone lowered its third-quarter EPS guidance to r adjusted net income of 25 cents to 27 cents a share, compared with its previous forecast of 33 cents to 35 cents. To make matters worse, the company withdrew a secondary stock offering just a week after announcing it. Analysts had been expecting the company would earn 32 cents in the quarter.

Research firm Robert W. Baird cut its price target on the stock to $29 from $36, but maintained an "outperform" rating on the stock. Rosetta Stone, which offers language learning products for 31 different languages, has more than doubled in size over the past few years, so today’s earnings cut is especially toxic. Keep in mind IPO investors are notoriously skiddish and today’s announcement did little to keep those investors in Rosetta Stone’s shares.

For more on Rosetta Stone, go here: http://www.rosettastone.com

Of course it wasn’t good news that led to this dramatic haircut in AEterna Zentaris shares. Phase 3 trials for the company’s Z-033 and the safety trial Z-041 in benign prostatic hyperplasia showed no clear improvements in patients taking part in the trial.

The point of these drug trials, as far as shareholders are concerned, is to show improvements, not flat results, so it’s fair to say that AEterna Zentaris committed a biotech cardinal sin. The company partners with French pharma giant Sanofi Aventis and that could help keep the company headed in the right direction, though at this point, an all out acquisition by Sanofi might be the best thing for AEterna shareholders.

While the company has no debt, AEterna still trades for more than 48 times book value, making it an expensie way to speculate on the biotech sector.

For more on AEterna Zentaris, go here: http://www.aeternazentaris.com

Last week, the FDA approved CryoLife’s CryoPatch SG pulmonary human cardiac patch and that sent the bulls running into the shares today. The patch is expected to be used in procedures to treat patients, inlcuding children, with congenital heart problems. The first patches are expected to ship in the current quarter.

It would appear that CryoLife is operating in its own universe at this point and that is a universe of bulls. The shares are still well off their 52-week high of $16.64 and if CryoLife can clear resistance at $8, the stock could run some more from there. Keep an eye on this one.

For more on CryoLife, go here: http://www.cryolife.com

The move in Quigley is surprising considering the broader market was thrashed today and there was no news directly impacting the stock. In fact, it was just 12 days ago that Quigley reported a wider second-quarter loss, but healthcare-related stocks tend to be a place investors head to on down days and that may be why Quigley was so strong today.

Quigley definitely hasn’t participated in the market rally as the stock is down almost 60% year-to-date and the performance hasn’t been much better over the past two months while the market has been surging. On the bright side, the company has no debt on its balance sheet, so if the market is bracing for a pullback, it may head to companies like Quigley that aren’t confounded by large debt loads.

For more on Quigley, go here: http://www.quigleyco.com/

Tennessee-based Verso Paper reported a net loss of $10.2 million, or 20 cents per share, in the second quarter compared to a loss of $44.7 million, or $1 a share, a year earlier. Verso had $298 million in net sales in the second quarter of 2009, compared to $451 million in 2008.

The Street wasn’t impressed with the narrower loss because the 2008 loss was attributed to IPO-related expenses. Now Verso Paper is showing legitimate weakness in its core business and the Street never likes that. Verso expects some improvement in its business sometime this year, but how that will trickle down to the share price is anyone’s guess.

And don’t be fooled by the lofy 5.1% dividend yield. That lies more with the stock price being low than the actual payout being high. Verso’s dividend in dollar terms is 12 cents a share.

For more on Verso Paper, go here: http://www.versopaper.com

Georgia-based TRX was done in by a dour second-quarter earnings report that saw the company earn just $22,000, or breakeven on a per share basis, compared with net income of $13.1 million and earnings of 71 cents a share in the second quarter of 2008. Sales slipped 60% to $15.1 million.

TRX is expanding into some new businesses and that should help the company going forward. In addition, TRX has no debt on its balance sheet. Still, the prudent way to play this stock is cautiously, if at all.

For more on TRX, go here: http://www.trx.com

On the bright side, we have Irwin Financial (IFC.NYSE), which raced up 24 cents, or 22%, to $1.34 today, making the Indiana-based regional bank the top gainer on the New York Stock Exchange today. Volume was more than triple the daily average.

It might be a tad early to get really excited about Irwin’s shares as the company reported a second-quarter loss last week of $57 million, or $1.92 per share, compared with a loss of $107 million, or $3.64 per share a year earlier. That was due to some bad mortgage loans.

Irwin Financial also has almost $570 million in debt and no free cash flow and that makes this a purely speculative play at this point.

For more on Irwin Financial, go here: http://www.irwinfinancial.com

For the second quarter of 2009, Patrick reported a net loss of $0.7 million or $0.07 per diluted share, compared to net income of $1.9 million or $0.25 per diluted share for the 2008 period. All things considered, that loss wasn’t all that bad given Patrick’s exposure to the residential real estate sector.

That exposure actually makes Patrick Industries worth a look here because from the housing sector has been getting progressively better over the past few weeks. Patrick Industries also has exposure to auto and recreational vehicle industries and if the economy really starts to perk up, that could spark further buying in Patrick shares.

For more on Patrick Industries, go here: http://www.patrickind.com

The sun has been setting on solar stocks recently and LDK wasn’t able to escape Mr. Market’s wrath today when the company reported soft second-quarter results. After the market close on Wednesday, LDK Solar said it lost $216.9 million, or $2.03 a share in the second quarter.  Analysts had been expecting LDK to lose just 91 cents a share. Plummeting solar wafer prices ate into LDK’s profits.

Revenues also fell in kind by 48% from the year-earlier period, landing at $228.3 million. You simply cannot get around the fact that solar stocks used to be the toast of Wall Street, but after frustrating investors for too long, it appears the Street is simply taking a pass on the group, at least in the near-term.

For around the same share price as LDK, you can certainly find better opportunities in the market right now, China stocks included.

Maryland-based Fortress reported a second-quarter loss of $16.8 million, or $1.32 a share, compared with a loss of $6 million, or 50 cents a share, a year earlier. Predictably, sales fell to $14.9 million from $20.1 million a year earlier. Backlog totaled $42.7 million as of June 30, 2009, compared to $45.5 million as of March 31, 2009.

Fortress also said its capital position is somewhat impaired and that there are no guarantees that will be able to raise enough cash to stay in business. In addition, the firm may delist its shares at some point in the near future from the Nasdaq. Fortress has $4.4 million in debt and $2.76 million of free cash, but it apparently needs more.

For more on Fortress International, go here: http://www.thefigi.com

Capital Bancorp offers traditional banking services and commercial, consumer and real estate loans. Given the company’s exposure to small business and real estate in the ultra-depressed Michigan economy, today’s pop is a wee bit surprising.

In addition, Capital Bancorp’s balance sheet is saddled with almost $530 million debt and the company has no free cash flow. And we all know what I’ve been saying about the ability of regional banks to raise capital. It ain’t easy prying money out of investors’ hands these days for regional banks.

For more on Capital Bancorp, go here: http://www.capitolbancorp.com

The company said it expects to report a profit of $1.3 million to $1.4 million for the first half of this year compared to a loss of almost $7 million for the year earlier period. Zareba also reduced the amount outstanding under its bank credit facilities to $2.1 million at June 30, 2009 from $4.7 million at the end of fiscal 2008.

Minnesota-based Zareba Systems makes energizers, high tensile fence systems, insulators, poly wire, tape and rope, automatic gate openers, and perimeter security fence systems for human and animal control, containment, detection, and deterrence.

There is something to like here with this stock no debt and over $1.1 million in free cash flow. The Street loves strong balance sheets and so should you. Zareba fits the bill.

For more on Zareba Systems, go here: http://www.ZarebaSystemsInc.com

The down for Freddie Mac should be concerning given the fact there was bullish news about home sales out today and one press report went so far as to say that the eye of the real estate storm had passed.

Freddie Mac and its rival Fannie Mae (FNM.NYSE), another government-run mortgage entity, reported strong earnings last week that sent both stocks above $1 for the first time in three months, but those results were bolstered by favorable accounting rules, not an actual increase in business.

At the end of the day, it’s way too early to get excited about any stock tied to the mortgage business and Freddie Mac is holding almost $62 billion in bad loans on its balance sheet. Fannie and Freddie are mere shells of their former selves and now isn’t the time to come running into the shares just because they look cheap at less than $2. They could be back at 50 cents in the blink of an eye.

The stock fell 53 cents, or almost 24%, to $1.72, making it the Nasdaq’s top loser. Volume was more than eight times the daily average. OccuLogix did substantially cut its second-quarter loss to $1 million, or 10 cents a share, from $2.5 million, or $1.11, a year earlier. However, sales slumped to about $97,000 from $127,000 a year earlier.

You could see a decline like this coming given how buyers were gobbling up OccuLogix earlier this week and I mentioned as much yesterday. Of course, the revenue decline played a part in today’s losses, too. The move has probably passed in OccuLogix.

The FDA approved CryoLife’s CryoPatch SG pulmonary human cardiac patch and that sent the bulls running into the shares today. The patch is expected to be used in procedures to treat patients, inlcuding children, with congenital heart problems. The first patches are expected to ship in the current quarter.

Today’s approval news comes on the heels of last week’s news that CryoLife received approval to market its BioFoam Surgical Matrix product in Europe, so things are looking pretty bullish for CryoLife. The Street loves approvals for biotech companies, so don’t fight this trend.

For more on CryoLife, go here: http://www.cryolife.com 

Paulson Capital reported a net profit for the six months ended June 30, 2009 of $1,041,918, or 18 cents a share, compared with a net loss of $6,958,622 , or $1.16 a share, a year earlier. Revenues soared to $9.3 million from just over $1 million a year earlier.

Paulson specializes in public offerings for companies in the $5 million to $45 million market segment. If the IPO market starts to heat up, Paulson could be worth watching. If nothing else, I’m encouraged to see a company reporting good earnings that don’t center around costs cuts. Kudos to Paulson for increasing its top line.

For more on Paulson Capital, go here:  http://www.paulsoninvestment.com

Investors soured on the shares after Colorado-based Petroleum Development said it will sell 3.8 million shares to raise between $50 million and $70 million, diluting shareholders in the process. Some analysts believe the move will dilute current shareholders by as much as 11%.

RBC Capital Markets downgraded its rating for Petroleum Development to "Sector Perform" from "Outperform." RBC noted that even with the offering, the company will have a debt to total capital ratio of about 41 percent, which is still above the industry average, according to the Associated Press.

Lest I forget to mention that natural gas futures are trading around $3.55 for August delivery, about half of what they traded at a year ago. Petroluem Development appears to be an ideal candidate for a short or consider buying some puts if you can find them.

For more on Petroleum Development, go here: http://www.petd.com

The bears tore in Anthracite, which is imperiled by significant commercial real estate exposure, after the company reported a third-consecutive quarterly loss and said it may not be able to meet some debt obligations that come due on September 30.

For the second quarter, the company posted a net loss of $110.1 million, or $1.39 a share, compared with a profit of $28.2 million, or 38 cents a share, a year earlier, according to Reuters. The company set aside $48.6 million for bad loans during the quarter. Anthracite also said that it doesn’t plan to make any new investments this year.

Anthracite shares are down more than 50% year-to-date and commerical real estate is widely expected to be the next "shoe to drop" by those in the know. Commercial real estate firms are loaded with massive debt totals and Anthracite is no exception, holding $1.88 billion in debt, and that has put these companies in the Street’s crosshairs. Stay away.

For more on Anthracite Capital, go here: http://www.anthracitecapital.com

The pop came after Assisted Living said yesterday after the close yesterday that it earned $3.9 million, or 33 cents a share, in the second quarter compared with $4.3 million, or 34 cents a share, in the year earlier period. The company reported a loss for the first six months of this year compared with a profit for the same period a year ago.

Yesterday, the company authorized a $15 million share repurchase program that will last a year and that was probably the catalyst behind today’s rally in Assisted Living shares. The Street hasn’t been getting a lot of buyback news lately and this type of news is generally bullish, indicating that companies are feeling their shares are underbvalued.

On the basis of Assisted Living’s potential to benefit from healthcare reform and an aging US population, the company looks like a decent long-term play.

For more on Assisted Living Concepts, go here: http://www.alcco.com

I mentioned yesterday that OccuLogix appeared to be rallying ahead of Wednesday’s earnings report and that if the buyers followed through today it might be a good sign for Wednesday’s earnings.

That said, if you didn’t get into OccuLogix on Monday or at some point today, you’re going to have to be cautious. The voracious buying in the past two days has all the makings of the smart money running the share price up so they can sell into some good news tomorrow and on Thursday. If you’re intent on starting a position in OccuLogix, keep it small and use a tight stop-loss.

For more on OccuLogix, go here: http://www.occulogix.com

Chinese stocks have been red hot lately, but steel has been a different story throughout the world and General Steel said  its second-quarter loss widened due to lower selling prices and increased expenses offset higher volumes.

General Steel lost $23.4 million, or 80 cents per share, compared with a loss in the year-earlier period of $20.9 million, or 69 cents per share. Although sales rose nicely, General Steel was hampered by rising costs, a dangerous tonic for makers of raw materials. As is the case with many commodities makers, General Steel has a high debt load at $436 million, but has no free cash flow with which to tame that debt.

For more on General Steel, go here: http://www.gshi-steel.com

I mentioned last week that Triad appeared to be rising in sympathy with other mortgage insurers and that the buying may be overdone given the considerable problems facing the sector. Triad prove me right by reporting a huge second-quarter loss after the close on Friday. Triad lost $359.4 million, or $23.91 a share, compared with a loss of $198.8 million, or $3.86 a share, for the second quarter of 2008.

Perhaps Triad thought by reporting those punk results after the close on a Friday would help its stock escape the market’s wrath today. Wrong. Mr. Market is an intrepid fellow and he always finds the weakest links. The company has $34.5 million in debt and negative free cash flow.

Market sentiment doesn’t seem to favor mortgage insurers at this point as more foreclosures and writedowns for bad loans are looming. Stay away from this sector.

For more on Triad Guaranty, go here: http://www.tgic.com

California-based OccuLogix makes treatments for dry eye disease. OccuLogix has operations in the United States, Canada, Europe, and Israel. The company’s TearLab product is currently marketed in 14 countries.

It would appear that the Street is expecting some exciting results out of OccuLogix and if the buying continues tomorrow, that should be confirmation that the company is set to report solid numbers on Wednesday. Keep an eye on this one for the next couple of days.

For more on OccuLogix, go here: http://www.occulogix.com

With no news on Doral, which operates in Puerto Rico, it’s hard to surmise what the catalyst was behind today’s pop in the shares. Perhaps it was delayed reaction to last Thursday’s boffo second-quarter earnings report that saw Doral earn $8.2 million compared to $1.8 million in the year earlier period.

Today’s rise sends Doral shares above critical resistance at $4 and now the stock will have to fight the $4.50 area to show some real strength and encourage fresh buying. The company has $4.9 billion in debt, so tread carefully.

For more on Doral Financial, go here: http://www.doralfinancial.com

Leap said after the close on Thursday that its second-quarter loss totaled $62.8 million, or 89 cents per share, compared with a loss of $26.6 million, or 39 cents per share, in the year earlier period. Analysts had been expecting a loss of 30 cents a share. Leap attributed the loss to debt-reduction efforts.

Thomas Weisel downgraded Leap shares to ”market weight” from overweight and Soleil Securites pared its rating on Leap to ”hold” from ”buy” and cut its price target to $19 from $48. Pali Research went the other way and upgraded Leap to ”neutral” from ‘’sell.”

With increased competition in the prepaid wireless from major players like Sprint (S.NYSE) and Verizon (VZ.NYSE), it’s hard to get excited about Leap’s near-term prospects. It could be a takeover target, but making that bet is risky to say the least.

For more on Leap Wireless, go here: http://www.leapwireless.com

Ambac couldn’t participate in the financials party due to a spate of bad news, not the least of which included a $2.4 billion second-quarter loss. That works out to a loss of $8.33 per share, compared with a profit of $823.1 million, or $2.80 per share, in the year-earlier period.

Cardinal sin time: Analysts had been expecting Ambac would lose only $1.04 a share for the quarter. Showing that all is still not well in the mortgage market, Ambac blamed the dour results on steep losses from investments in mortgage-backed securities.

Making matters worse, Standard & Poor’s revised its outlook on Ambac Assurance Corp’s debt ratings to negative on Friday, citing deterioration of the firm’s insurance portfolio, according to Reuters.

Throw in the fact that Ambac is suing Citigroup (C.NYSE) and Credit Suisse, saying the two companies misrepresented the risk in $2 billion of mortgage-backed securities and it’s hard to find any bullish news on Ambac. The Street is saying stay away.

For more on Ambac Financial, go here:  http://www.ambac.com

There was no direct news impacting EuroBancshares today, but it appears the market is warming to financials of all kinds and that bullish sentiment may be trickling down to names like EuroBancshares.

EuroBanchsares does have exposure to residential and commercial real estate in its loan portfolio, so it will be interesting to see if the company faces any of the same problems that larger banks have for similar loan portfolios. The company has nearly $518 million in debt and no free cash.

For more on EuroBancshares, go here: http://www.eurobankpr.com

After the close on Thursday, Iowa-based FBL reported second-quarter earnings of $24.4 million, or $0.81 per diluted common share compared with a loss of $16.6 million, or $0.56 per diluted common share, for the second quarter of 2008.

I talked a little about the property and casualty insurance space earlier this week when Phoenix Cos. (PNX.NYSE) reported dour results, but FBL Financial would have none of that and stunned the Street with some strongly bullish news today.

Adding to the bullish news, FBL Financial said it has no debt coming due until 2011 and that its book value increased to $19.39, an increase of 129% from $8.46 at December 31, 2008.

And the company has a decent dividend yield at 2.4%, so it might be worth a look here.

For more on  FBL Financial, go here: http://www.fblfinancial.com

The culprit behind MiddleBrook’s dour day was a second-quater loss that widened to $19.6 million, or 23 cents a share, compared to a loss of $3.7 million, or 7 cents a share a year earlier. Sales fell to $2.1 million from $2.5 million. Even cost-cutting, a favorite tactic of US corporates in these glum economic times, couldn’t deliver MiddleBrook to profitability.

Maryland-based MiddleBrook makes treatments for pharyngitis and tonsillitis and KEFLEX capsules for the treatment of skin and skin structure infections and upper respiratory tract infections.

While those products may one day deliver nice returns, as I’ve said so many times, companies that are reporting disappointing earnings with no encouraging guidance aren’t deserving of your investment dollars.

For more on MiddleBrook Pharmaceuticals, go here:  http://www.middlebrookpharma.com

MetroPCS had second-quarter net income of $26 million, or 7 cents a share. That was down from $50 million, or 14 cents a share, a year earlier. Revenue rose 27% to $856 million. The company added 206,000 new customers during the quarter, but that was less than the 400,000 analysts had expected.

MetroPCS rival LEAP Wireless (LEAP.NSDQ) also announced a punk earnings report today, and that stock tumbled more than 20%. Competition for prepaid wireless customers is increasing as large carriers such as Sprint (S.NYSE) and Verizon (VZ.NYSE) enter this lucrative market. The increased competition could weigh on shares of MetroPCS and Leap going forward.

One analyst called MetroPCS’ results "ugly." I’m not going to argue with that and the near-term outlook doesn’t look any better.

For more on MetroPCS, go here: http://www.metropcs.com 

Vitro makes safety glass, insulated glass units, laminated, and table top glass for the construction industry, distributors, retailers, installers, and furniture and home appliances manufacturers; and automotive glass, such as windshields, side laminated glass, and rear and side tempered glass for the automotive original equipment manufacturers and AGR market.

It’s hard to put a finger on what prompted the buying in Vitro shares today, but it may be worth keeping an eye on the stock going forward. Sure, the company has $1.49 billion in debt, but $441 million in free cash flow makes that debt somewhat manageable.

For more on Vitro Sociedad, go here: http://www.vitro.com

Central Bancorp reported second-quarter profits of $145,000, or 10 cents a share, compared to $401,000, or 29 cents a share, a year earlier. Of course, increased bad loan provisions ate into the most recent results, but the Street appeared to be OK with that.

Earnings were also reduced by $153,000 due to the sale of preferred shares and warrants to Uncle Sam as part of Central Bancorp’s $10 million participation in the Troubled Asset Relief Program (TARP).

So things weren’t all that bad for Central Bancorp and investors took note of that. Central Bancorp has a tolerable $156,900 in debt and no free cash flow, but things appear to be improving.

For more on Central Bancorp, go here: http://www.centralbk.com

The bears got a hold of Xerium after the company said second quarter earnings fell to $1.6 million or $0.03 per share, compared to a net income of $14.1 million or $0.31 per share for the second quarter of 2008. Sales tumbled to $120.8 million, a 29.1% decrease from net sales for the 2008 second quarter of $170.4 million.

On the bright side, Xerium said it believes it has found a bottom in its various markets and it could start to see some momentum by the middle of next year. Still, the company has more than $609 million in debt with just $81.4 million in free cash flow. If you buy here, you might be holding the shares for quite a while.

For on Xerium Technologies, go here: http://www.xerium.com

While BigBand Networks said it earned 4 cents a share in the second quarter compared to 2 cents a year ago, beating Street estimates, the company committed the cardinal sin of lowering estimates for the current quarter.

BigBand expects a third-quarter loss of 13 cents to 15 cents a share on sales of $20 million compared to Street estimates of a profit of 6 cents a share on sales of $45.8 million. As a result, Avondale Securites lowered its rating on BigBand to ”market perform” from ”market outperform” while reiterating a $5 price target.

This is simply not the time to be guiding lower, though there’s never a good time to do that, and BigBand was punished as a result.

For more on BigBand Networks, go here: http://www.bigbandnet.com

The buying is encouraging as it comes ahead of Triad Guaranty’s second-quarter earnings report on Friday after the close. North Carolina-based Triad Guaranty lost $55.2 million, or $3.86 a share, in the first quarter of this year.

It’s tough, if not risky, to bet on Triad Guaranty surprising the Street in similar fashion to Radian. In fact, I wouldn’t bet on it. While there is no debt number available in Triad’s corporate statistics, the company does have negative free cash flow. Don’t chase the momentum among the mortgage insurers.

For more on Triad Guaranty, go here: http://www.tgic.com

Radian, which provides mortgage insurance, surprised the Street with a second-quarter profit, saying it it earned $231.9 million, or $2.82 per share, compared to a loss of  $392.5 million, or $4.91 per share, a year earlier.

In the latest quarter, Radian said it recorded a $272.3 million gain on credit derivatives and cut expenses by 77%, according to the Associated Press. Radian did say it expects mortgage delinquencies to rise this year, but that didn’t keep the bulls away from the stock. Buyers were perhaps encouraged by news that Radian will focus more on higher quality borrowers.

While today’s news on Radian Group is certainly bullish, take it with a grain of salt as the company has $1.06 billion in debt and negative free cash flow. Not to mention housing has only started to recover and that recovery is in its nascent stages to be sure.

For more on Radian Group, go here: http://www.radiangroupinc.com

Phoenix lost lost $111.2 million, or 96 cents per share, compared to a profit of $6.2 million, or 5 cents per share in the year earlier period. Analysts had been expecting Phoenix to earn nine cents a share for the quarter.

The results included $68.8 million in realized losses, including credit-related impairments and losses related to investments and hedging, according to the Associated Press.

Phoenix has been hampered by downgrades from ratings agencies that have led few insurance agents to sell Phoenix products. The decline in Phoenix shares is especially forboding given how well rivals Hartford Financial (HIG.NYSE) and Lincoln National (LNC.NYSE) have performed this year. Phoenix shares are down almost 30% year-to-date compared to positive performances for its rivals.

So it’s clear Phoenix may be the weakest link in the property and casualty insurance sector. At least that’s what the Street thinks and it would be wise not to bet against the Street in this case. Oh yeah, the company has more than $452 million in debt and no free cash.

For more on Phoenix Companies, go here: http://www.phoenixwm.phl.com

The sell-off came on news that Gamynia Limited, a private investment firm, will acquire WPT for just over $9 million. That news was announced after the market close on Monday. WPT will still operate independently, but investors don’t appear to be keen on the acquisition.

Under the terms of the agreement, WPT will sell will sell its television library, including all related intellectual property rights, brand names, trade names, certain assumed contracts and tangible personal property. WPT may use proceeds from the acquisition to acquire new businesses, the company said.

Everyone knows how popular poker is these days and that makes WPT an interesting speculative. Keep in mind the company has no free cash flow and $2.65 million in debt.

For more on WPT Enterprises, go here:  http://www.worldpokertour.com

To recap, Georgia Gulf more than doubled last Thursday, tacked on another 38.5% yesterday and added 34% on top of that today. Talk about compound interest. In fact, the stock traded above $47 a share today before pulling back in a huge way.

More than 4.6 million shares changed hands today compared to average daily volume of just under 126,000 shares. The wild action in Georgia Gulf shares has led to an inquiry from the NYSE and that may be an ominous sign.

The rally in the stock may be attributable to the tiny float of just 1.4 million shares and a reverse stock split that the company recently engineered. Georgia Gulf plans to increase its float to 100 million shares by converting preferred shares to common stock and that may imperil anyone that has been buying the stock on this rally.

As I said earlier, Georgia Gulf traded above $47 today and most of the decline took place late in the trading day, perhaps a sign that profits are being taken. Approach this stock with extreme caution.

At this point, the rapid run up in Chinese stocks is well known, but Wuhan General is a name that isn’t known to many investors. I’ll say this: A pop like this on extremely unusual volume is a classic sign that new money is starting to pay attention to this stock.

Wuhan makes blower products include axial fans that provide air for larger power stations; and centrifugal blowers, which offer air at higher pressures in medium-sized power stations for blowing coal dust into furnaces, as well as for aeration in sewage treatment plants. The company also makes steam and water turbines.

The downside to this stock is the fact that Wuhan has $28 million in debt and negative free cash flow. Normally, I’m not a fan of stocks with negative free cash flow, but I might be willing to make an exception in the case of Wuhan General.

For more on Wuhan General, go here: http://finance.yahoo.com/q/pr?s=WUHN

iStar, which has $15 billion in assets, derives the bulk of its revenue from the commercial real estate sector, which is a minefield unto itself right now. Some analysts have said iStar’s results will continue to be poor while others have publicly doubted whether the company will even be in business 12 months from now.

It appears iStar needs a private investor to come in to save the company from bankruptcy, but even that move would be dilutive to current shareholders. Many on the Street are speculating that commercial real estate will be the last area of the credit markets to show any signs of recovery.

iStar has a massive debt load standing at $12.26 billion which is nearly 60 times its ever-dwindling market cap of $214.1 million. It’s hard to be a fan of stock in a financial quagmire like that.

For more on iStar Financial, go here: http://www.istarfinancial.com

Huron, which is a distant cousin another infamous (and now defunct) accounting firm, Arthur Andersen, said its entire top management team would leave the firm and that it will restate three years of quarterly results. In one of the more ironic twists of fate you’ll ever hear about, Huron is in the business of helping its clients avoid such problems.

As a result of the news, no less than five analysts pared their ratings on Chicago-based Huron. Oppenheimer cut its rating to ”underperform” from ”outperform.” SunTrust Robinson Humphrey slased its rating to ”neutral” from ”buy,” while Deutsche Bank pared its rating to ”hold” from ”buy.” Robert W. Baird now rates Huron ”underperform” from a prior rating of ”neutral” and cut its price target to $15 from $50. William Blair also lowered its rating on Huron to ”market perform” from ”outperform.”

A Huron audit committee discovered shareholders of four businesses that Huron acquired between 2005 and 2007 redistributed portions of their acquisition-related payments among themselves and to certain Huron employees, according to Reuters.

The company sent its CEO and CFO packing on Friday, but the damage to the company’s reputation and bottom line is significant. Restating those earnings reports will raise the company’s costs for 200-2008 and for the first quarter of 2009. In other words, don’t buy Huron’s stock.

Today’s move comes on the heels of Geogria Gulf’ss huge pop last Thursday when the company announced it would reduce its debt by 50%. At the beginning of July, the stock changed hands for just $7, but with the huge volume coming into the shares, it appears this rally is for real.

Monday’s move in Georgia Gulf sent the stock soaring above a critical resistance level at $20 and the chart shows a break above a long-term downward trend line. In other words, some extremely bullish signals are coming from Georgia Gulf’s stock right now. Now the stock needs to clear its 200-day moving average just below $30 and if it does, watch out.

For more on Georgia Gulf, go here: http://www.ggc.com

This is an extremely bullish sign going into Commercial Vehicle Group’s earnings report on Wednesday. Analysts are expecting the company to lose 35 cents a share on sales of $116.18 million, but apparently some on the Street are thinking those numbers will be beaten and they loaded up on the stock today.

Ohio-based Commercial Vehicle makes auto parts such as air suspension seats, static seats, bus seats, heavy truck seats, and construction and other commercial vehicle seats. The company also makes office equipment. That’s kind of an odd business mix and it makes the stock especially sensitive to economic downturns, but who am I to argue with today’s rally?

Commercial Vehicle as $165.5 million in debt and $37.2 million in free cash flow and it will be interesting to see if the company comments on any debt reduction plans on Wednesday. Keep on eye on the stock for the next few days.

For more on Commercial Vehicle Group, go here: http://www.cvgrp.com

What else drags down financials these besides glum earnings reports and increased provisions for bad loans? New York-based iStar committed both cardinal sins today, reporting a second-quarter loss of $292.3 million, or $2.85 a share, compared with a profit of $18.9 million, or 14 cents per share, in the same period a year earlier.

The company said almost 40% of its loans, representing $4.6 billion, were rendered non-performing at the end of June. iStar booked $435 million in loan provisions during the quarter and said free cash flow fell to $417 million from $1 billion a year earlier. None of this is news the Street wants to hear and when it does hear it, stocks will be punished accordingly.

For more on iStar Financial, go here: http://www.istarfinancial.com

Synaptics (SYNA.NSDQ), the maker of components for mobile computing and entertainment devices, was hammered today, falling $11.88, or 33%, to $23.97 after lowering its fiscal 2009 and 2010 revenue outlooks.

After the close Thursday, Synaptics said it expected fiscal first-quarter sales of $113 million to $119 million. That’s below the average analyst estimate of $127.4 million. For 2010, the company expects sales to range between $495 million and $525 million and that increase from 2009 apparently isn’t good enough for the Street.

Today’s glum news from Synaptics led to four analyst downgrades. Collins Stewart and Lazard Capital pared their ratings on the stock to ”hold” from ”buy” and Jefferies did the same thing while lowering its price target on Synaptics shares to $26 from $44. Caris & Company lowered its rating to ”average” from ”above average” and cut its price target to $36 from $39.

For more on Synaptics, go here: http://www.synaptics.com

The ills of the auto parts sector have been well documented lately and I’ve certainly opined several times recently about ArvinMeritor rival American Axle (AXL.NYSE). There was no news on ArvinMeritor today, but perhaps the run up is a delayed reaction to yesterday’s news that the company will shutter a plant in Kentucky this year to cut costs.

Unfortunately, that will lead to 83 layoffs, but cutting costs is the only way auto parts companies can survive in this tough operating environment. I’ve talked about Lear seeking bankruptcy and American Axle on the brink of doing the same. While ArvinMeritor isn’t there quite yet, it is worth noting the company has $1.52 billion in debt and negative free cash flow.

For more on ArvinMeritor, go here: http://www.arvinmeritor.com

Of course there was FDA-related news to spur the buying in Anadys shares. The FDA approved the design of an Anadys study of a potential hepatitis C treatment. The mid stage study includes Anadys’ drug candidate ANA598, according to the AP.

Anadys currently has no drugs on the market, but it is working on two Hepatitis C treatments and one for cancer. Today’s news led an analyst at ThinkEquity to upgrade Anadys to ”accumulate” from ‘’source of funds.” I’m not sure what those ratings mean and I’ll just assume it’s the equivalent of going to a ”buy” from a ”hold.” The price target was also boosted to $3 from $1.50.

Anadys is expecting trial data to be released later this year and in 2011, so there might be some more room to run in the stock.

For more on Anadys, go here: http://www.anadyspharma.com

iCAD reported a second-quarter loss of $1.4 million, or 3 cents a share, compared with a profit of $2.4 million or 6 cents a share, a year earlier. Sales plunged to $5.7 million from $10.5 million a year earlier. The company’s top and bottom line numbers for the first six months of this year are also lagging last year’s pace.

iCAD makes products that enable radiologists and other healthcare professionals to identify pathologies and pinpoint cancer earlier. On the surface, this would seem like pretty compelling technology, but the Street seems to feel differently. On the bright side and I mentioned this earlier in the week, iCAD has no debt and $3.9 million in free cash flow.

For more on iCAD, go here: http://www.icadmed.com

After a spate of surpisingly good news from newspaper publishers over the past few weeks, Lee couldn’t add fuel to the fire today when it reported a fiscal third-quarter loss of $24.5 million, or 55 cents a share. The Iowa-based company had a profit $2.8 million, or 6 cents per share, a year earlier.

Of course, Lee cited weaker ad sales as the culprit behind the quarterly loss. Lee, the publisher of the St. Louis Post-Dispatch, said sales dropped 20.5 percent to $203.8 million due to increased competition from the Internet.

This is exactly what the Street does NOT want to hear from old-line media companies. Traditional media needs to adapt to the Internet or risk going the way of the dodo bird. What’s worse is Lee’s debt load of $1.21 billion compared to free cash flow of just $57.9 million.

For more on Lee Enterprises, go here: http://www.lee.net

First California provides commercial banking services to individuals, professionals, and small- to mid-sized business in California. Perhaps today’s run up was a delayed reaction to First California’s bullish second-quarter earnings announcement on Monday. The company said it returned to profitability in the second quarter after posting a first-quarter loss.

That’s certainly good news, but I’d like to see the company do something about its $189 million debt load. First California has $133.1 million in operating cash, so the Street is probably hoping the company doesn’t need to do a dilutive capital raise to pare down its debt. Keep an eye on this one if the bull market legitimizes itself.

For more on First California Financial, go here: http://www.fcalgroup.com

Bulls scurried into the stock after the company announced it pared its debt load by more than 50% through a debt-for-equity exchange. Georgia Gulf accepted about $736 million, or 92%, in aggregate principal amount of senior notes in exchange for convertible preferred and common stock.

While that may have led some investors to shrug off the news because of its potentially dilutive effects, the prospect of a significantly improved balance sheet was too much for investors to ignore. The stock has traded between $5.50 and $121 over the past 52 weeks so Georgia Gulf has a long way to go to get back to its high.

Along those same lines, the one-year target estimate on Georgia Gulf is $46.88 and if that happens, that’s almost a triple from today’s closing price. The Street loves lower debt loads, so keep an eye on Georgia Gulf going forward.

For more on Georgia Gulf, go here: http://www.ggc.com

Like so many of its rivals, American Axle has been teetering on the brink of bankruptcy due to the significant downturn in the auto industry. Keep in mind that American Axle depends on General Motors and Chrysler for the bulk of its sales. Talk about a pair of troubled customers…

American Axle said it remains in talks with its lenders regarding a $470 million line of credit. American Axle said in June that operating shutdowns at GM and Chrysler could reduce sales by $300 million, leading to a $90 million to $95 million reduction in second- and third-quarter operating results, according to the Associated Press.

While today’s news about the loan waiver was enough to juice the shares, it doesn’t change the long-term fundamental picture for American Axle or its industry. You know what to do.

For more on American Axle, go here: http://www.aam.com

While volume was more than 11 times the daily average, there was no news to spark the buying. That said, the stock did trade as high as $2.07 today. First Federal is the holding company for Vantus Bank, which operates in Nebraska and South Dakota. Those aren’t exactly the most lucrative banking markets in the U.S., but it is what it is. The company also offices in Iowa, again not the bastion of banking booms, but these First Federal’s chosen markets.

What is interesting about First Federal Bankshares is the fact that the company has more than $91 million in debt, an absolutely staggering some for a company with a market cap of just $5.45 million. Believe it or not, there may better options among the smallcap banks than First Federal.

For more on First Federal Bankshares, go here:  http://www.firstfederalbank.com

What else besides a weak second-quarter earnings report could be the culprit? AM Castle said its second-quarter numbers slid to a loss of  $5.5 million, or 24 cents a share, compared with earnings of $11.3 million, or 49 cents a share, a year earlier. Revenue fell about 51 percent to $195.1 million. That’s good for a 52% decline in sales in the metals division and a 50% plunge in the plastics division, the company said.

The glum earnings news led analysts from Davenport and Next Generation to downgrade AM Castle to "hold" from "buy" and Davenport lowered its price target on the stock to $11 from $14.

For more on AM Castle, go here: http://www.amcastle.com 

Frontier Financial committed a double whammy of sorts by saying it lost money in the second quarter and that plans to raise capital through a private equity investment. Actually, consider today’s news a triple whammy because Frontier said it increased its provisions for bad loans to $77 million from $24.5 million a year earlier.

For the second quarter, Frontier said it had a net loss of $50 million, or $1.06 a share, compared with a net income of $2.1 million, or 4 cents a share last year. Analysts had been expecting a loss of 77 cents a share. 

In March, the company received a ceases and desist order from federal regulators under which the bank agreed to bolster its capital position. Frontier has hired an investment bank for help on that front, but the fruits of those labors remain to be seen.

It’s clear the Street doesn’t like this stock right now. Stay on the sidelines until we get some news about the capital raise.

For more on Frontier Financial, go here: http://www.frontierbank.com 

Robert W. Baird analyst Christopher J. Raymond cut his rating on Cerus to ”neutral” from ”buy” on the basis that the stock has more than doubled in just a couple of weeks. He did reaffirm a $3 price target and that’s a pretty good percentage move from $2.30.

California-based Cerus makes the Intercept system, which is used to clean donated blood of bacteria, viruses and parasites before transfusion. Cerus is heavily dependent on France and Germany as end markets for Intercept because the system is not yet approved for use in the U.S.

For more on Cerus, go here: http://www.cerus.com

The bears ripped into USEC after the Department of Energy denied the company a $2 billion loan to build a new uranium-enrichment plant in Ohio. The announcement apparently caught both the company and the Street by surprise. USEC has already investred $1.5 billion in the project and may have to come up with new financing to clean up the site, though the government has said it will help with those costs.

Today’s news led Jefferies analyst Laurence Alexander to downgrade USEC shares to ”hold” from ”buy” and trim his price target to $3.25 from $8. Ouch.

What’s odd abou the government’s decision is that building a factory like this would surely create some new jobs in a state has lost many over the past couple of years. In fact the plant was expected to employ at least 400 people. The government claims it will create 1,000 jobs at the cleanup site. We shall see. In the meantime, keep an eye on news about this project as it pertains to USEC shares.

For more on USEC, go here: http://www.usec.com

Sprint will pay $5.50 a share for Virgin Mobile, which it already owns more than 13% of. Virgin Mobile is a dominant provider of prepaid cell phone services, an area of the mobile phone market that has seen rapid growth in recent years as more consumers opt for the pay-as-you-go flexibility offered by these providers rather than cumbersome and lengthy contracts offered by the likes of Verizon and AT&T.

Virgin Mobile has 5.2 million subscribers who pay an average of $20 per month. Sprint has 49.1 million subscribers, including those using the network through wholesalers like Virgin Mobile, according to the Associated Press.

Sprint will be nice enough to retire $205 million in Virgin Mobile debt, but none of this solves Sprint’s problems when it comes to competing with Verizon and AT&T for more lucrative cell phone customers. If Sprint wants to make a real splash in prepaid, it may need to make another acquisition, such as Metro PCS (PCS.NYSE) or Leap Wireless (LEAP.NSDQ).

This is positive news for Virgin Mobile shareholders, but only time will tell for Sprint.

iCad makes products that enable radiologists and other healthcare professionals to identify pathologies and pinpoint cancer earlier. The company recently submitted data to the FDA seeking 510(k) marketing clearance of its VeraLook computer-aided detection (CAD) technology for CT colonography, essentially a virtual colonoscopy, according to press reports.

Of course, that could be a boon for the shares if good news is released. That’s a familiar theme we’ve seen recently with many biotech stocks. Perhaps iCad will offer an update on VeraLook during its conference call on Thursday.

Even if it doesn, the buying pattern today suggest the bulls are either excited about the earnings or prepping to sell into a rally. iCad is expected to lose a penny a share for the second quarter.

For more on iCad, go here: http://www.icadmed.com

As is often the case with the small banks, there wasn’t any news that resulted in the drop, it’s just negative sentiment on behalf of the Street. As I’ve been saying for months, small and even select medium-sized banks are firmly in the Street’s crosshairs over capital raising concerns and while those concerns have yet to directly apply to Bank of Virginia, consider this is a tale of guilt by association.

Bank of Virginia has $10 million in debt and that is cause for concern for a company with a market cap of just $13.7 million. To boot it, doesn’t pay dividend, which most banks do. The stock has actually outperformed the S&P 500 over the past 52 weeks, but I’m not betting on that being a lasting trend.

For more on Bank of Virginia, go here: http://www.bankofva.com

News that Mylan (MYL.NYSE), the world’s third-largest generic drugmaker, is facing quality control issues at on its production facilities dragged down rivals such as KV. KV faced similar issues earlier this year.

Don’t underestimate the importance of news like this as it pertains to pharma companies. This means the FDA gets involved and that’s not good news. I think the decline in KV is likely a one-day event, especially given that the negative news didn’t directly apply to the company.

That said, even at less than $2 a share, there are probably some better ways to speculate on the smallcap pharama space. Biotechs anyone?

Acco Brands adjusted second-quarter profits beat Street estimates and that sent the bulls running into the stock on Monday. The company earned 11 cents on an adjusted basis compared to analyst estimates of three cents. The Street just loves it when companies beat by a wide margin like that.

In addition, Acco Brands said it expects second-half sales to fall by less than previously expected. The company previously forecast a 27% slump in second-half sales and said today that sales will likely fall by 15%-20%.

Acco also said it expects a modest improvement in 2010 results attributable to lower commodities costs and favorable foreign currency exchange rates. That’s good news, but the Street will want to see increased market share and sales at some point.

For more on Acco Brands, go here: http://www.accobrands.com

While this may seem like an unusual move for stock in the home furnishings sector, consider that new home sales improved by 11% in June and that news was met with open arms by the Street during Monday’s trading session. And we cannot forget that Select Comfort reported a smaller second-quarter loss on Friday and that bullish news probably carried over to today’s session.

Minnesota-based Select Comfort distributes its products through retail, direct marketing, and e-commerce channels primarily to end users, home furnishings retailers, and specialty bedding retailers. As of January 3, 2009, it had 471 company-owned stores and 801 retail partner doors.

It’s hard to be a fan of any stock related to consumer spending at this point in the business cycle, but people will spend money on improving their homes and if home sales data continues to improve, Select Comfort’s shares may follow suit.

For more on Select Comfort, go here: http://www.selectcomfort.com

Amcol said second-quarter earnings fell 59% as weak sales from its minerals business and foreign currency exchanges weighed on the company’s bottom line. For the quarter, Amcol earned $6.1 million, or 20 cents a share, down from $14.8 million, or 48 cents a share, a year earlier. Sales slumped 27% to $171.2 million.

Analysts had been expecting Amcol to earn 31 cents a share on sales of $201.4 million, so today’s news was a severe disappointment. Amcol shares were about 11% year-to-date before today’s drop.

With earnings estimates already low and most companies beating those low numbers, stocks that miss or disappoint are going to pay for it as Amcol found out today. Don’t disappoint the Street is the maxim here.

For more on Amcol International, go here: http://www.amcol.com

Bank of Granite offers traditional banking services in North Carolina. The company also engages in mortgage lending and that may be the red flag the Street saw today. Oddly enough, Bank of Granite shares are up more than 20% year-to-date, far outpacing North Carolina rivals like Bank of America (BAC.NYSE) and BB&T (BBT.NYSE)

It’s still too early to be getting excited about small banks and as it appears that more than a few may go by the wayside before all is said and done. I’m not saying that is going to happen with Bank of Granite. In fact, it appears the stock may be one of the better smallcap banks to bet on. Just pick your spot cautiously.

For more on Bank of Granite, go here: http://www.bankofgranite.com

Horizon reported better-than-expected second quarter results on the back of workforce cuts and lower fuel costs. In the second quater, Horizon had a net loss of $31.1 million, or $1.02 a share, compared with a net income of $5.8 million, or 19 cents a share, last year.

But when charges are backed out, Horizon earned $4.1 million, or 13 cents a share, well ahead of the Street’s estimate of 3 cents a share. Horizon also expects adjusted EBITDA for 2009 to remain above levels that would jeopardize its compliance with financial covenants in its credit agreement, according to Reuters.

As of the end of 2008, Horizon had $563.6 million in debt and $93.3 million in free cash flow. Larger transport stocks have been on the move lately and that appears to be trickling down to Horizon lines. Keep on the sector for the rest of earnings season.

For more on Horizon Lines, go here: http://www.horizonlines.com/

Tennessee-based NN makes metal bearing components, plastic and rubber components, and precision metal components for bearing manufacturers worldwide. I have to say I’d be surprised to hear that that business is booming right now, which I doubt it is.

Still, NN shareholders are likely happy with today’s big move. After all, this stock trader for nearly $16 a year ago and has been beaten up by Mr. Market ever since. NN has almost $101 million in debt with just over $13.5 million in free cash flow.

For more on NN, go here: http://www.nnbr.com

The troubles hampering the auto parts sector have been well-documented over the past few months and the bankruptcies of GM and Chrysler have obviously weighed on the auto parts group, American Axle included.

I mentioned a couple of weeks ago that American Axle may follow rival Lea (LEA.NYSE) in seeking bankruptcy protection. American Axle is currently working with legal advisors on a restructuring plan that may eventually include bankruptcy.

American Axle shares have been in a death spiral since topping out at $3.50 just a few weeks ago. The Street apparently wants to wreck this stock agin. Stay away.

See what I’ve been talking about regarding the biotech sector lately? This sector ain’t for the faint of heart to put it mildly. Repros specializes in treatments for reproductive disorders in both men and women, but today’s culprit behind the sell-off was dour news regarding the company’s experimental drug for uterine fibroids.

Sellers were keen to knock the stock down following news that Repros has yet to effectively control the adverse effects of elevated liver enzyme levels the drug causes. That news contradicts statements by Repros earlier this month that it had gottent that issue under control.

Repros has already discontinued use of a higher dosage version of the drug known as Proellex. Some analysts have expressed concern over the issues facing Repros and Roth Capital downgraded the shares to ”hold” from ”buy” while paring its price target to $4 from $11. Ouch.

For more on Repros Therapeutics, go here: http://www.reprosrx.com

Despite a decline in second-quarter earnings, TrueBlue still beat Street expectations and that was enough to get the bulls excited. For the quarter, net income fell 78 percent to $3.7 million, or 9 cents a share. Revenue fell 33 percent to $247 million. Analysts had been expecting a loss of 4 cents a share on sales of $229.3 million. The company also offered a bullish outlook for the current quarter.

That will get the job in terms of getting a stock to move higher. Beat earnings. Beat sales. Guide higher. Beat, beat, guide. It works everytime. BMO Capital Markets analyst Jeffery Silber upgraded shares of TrueBlue to ”outperform” from ”market perform” as a result of today’s earnings report. Silber raised his price target on TrueBlue to $12 from $9.

For more on TrueBlue, go here: http://www.trueblueinc.com

A move like this on strong volume is a good sign and probably not without a catalyst. And indeed there was a catalyst. A bullish media reported noted that investors seem to be getting more and more interested in California-based Somaxon as the company makes progress on its insomnia treatment. Clinical trial results are scheduled to be reported in December.

Sure, that’s long way off, but what is known is that nearly 70 million Americans suffer from insomnia, making the market lucrative for Somaxon’s treatment. More than 63 million prescriptions for insomnia were written by doctors in 2008, and that bodes well for Somaxon’s drug, Silenor.

Somaxon believes Silenor will at least be approved for prescription use and trial data shows that nine of 10 doctors have shown a willingness to prescribe the drug, according to press reports.

It would appear that now is not the time sleep on Somaxon. One thing to note: The stock did trade as high as $4.78 today, just two cents off its 52-week high before being sold-off.

For more on Somaxon, go here:  http://www.somaxon.com

The bears hammered Allegheny Technologies after the company said it lost $13.4 million, or 14 cents per share, compared with a profit in last year’s second-quarter of $168.9 million, or $1.66 per share. Analysts had been expecting a profit of 3 cents a share.

Sales tumbled to $710 million from $1.46 billion, less than the $816.6 million the Street had expected. The company cited slack demand for nickel and titanium alloy from aerospace customers.

This is the world in which we live right now. Upside surprises are reward and downside reports are punished. It’s that simple and that makes Allegheny Technologies somewhat risky fare at this point. The company has $503.5 million in debt and $339 million in free cash flow.

For more on Allegheny Technologies, go here: http://www.alleghenytechnologies.com

The company said it expects to report a profit of $1.3 million to $1.4 million for the first half of this year compared to a loss of almost $7 million for the year earlier period. Zareba also reduced the amount outstanding under its bank credit facilities to $2.1 million at June 30, 2009 from $4.7 million at the end of fiscal 2008.

Minnesota-based Zareba Systems makes energizers, high tensile fence systems, insulators, poly wire, tape and rope, automatic gate openers, and perimeter security fence systems for human and animal control, containment, detection, and deterrence.

There is something to like here with this stock no debt and over $1.1 million in free cash flow. The Street loves strong balance sheets and so should you. Zareba fits the bill.

For more on Zareba Systems, go here: http://www.ZarebaSystemsInc.com

Cardica said the full results of the PAS-Port system multi-center pivotal trial, known as the EPIC trial, were published in a recent issue of The Journal of Thoracic and Cardiovascular Surgery. The report showed the PAS-Port system was effective in creating a secure connection, or anastomosis, between a vein graft and the aorta, the main artery in the human body, during coronary artery bypass grafting.

This is a pretty big deal in terms of treating patients with heart problems and makes me wonder if Cardica may link up with a bigger pharma or medical device player to market the PAS-Port system. After all, this has been the trend in the life sciences space recently. Plus, Cardica has $2 million in debt and negative free cash flow, so it may need some additional capital.

For more on Cardica, go here: http://www.cardica.com

Journal Communications reported earnings news yesterday that wasn’t as bad as the Street was expecting, but Media General reported legitimately good news today by saying it earned 90 cents a share in the second quarter compared with a year-ago loss of $25.12 a share. While the gains were mostly attributable to cost-cutting and the sale of two TV stations, Media General shareholders were likely happy with today’s pop.

Two years ago, Media General traded for nearly $29 a share and the company has been whacked along side its rivals as ad spending has slowed amidst the current recession. I’m not prepared to say a bottom has been put in by the Street concerning smaller media stocks, but it is obvious some members of the group are reporting upside surprises this earnings season. Still newspapers and local TV news stations have seen better days and that makes me pensive about endorsing the sector at large. If you need to play the media sector, head toward Disney (DIS.NYSE).

For more on Media General, go here: http://www.media-general.com 

There was no news directly impacting Headwaters shares today, but the company is no stranger to bad news. Just a few weeks ago, Headwaters said it would breakeven or earn just 20 cents a share in 2009 compared with previous estimates of a profit of 25 cents to 40 cents a share. The company recently amended $227.5 million in debt, but it does have $25 million in debt coming due in December and the Street has speculated that an asset sale may be necessary for Headwaters to pay that tab.

Headwaters rocky performance over the past mont or so is troubling considering that coal stocks have outperformed the market. The Market Vectors Coal ETF (KOL) is up more than 70% year-to-date. So what gives with Headwaters? Obviously the company is facing some headwinds that are weighing on the shares and there are certainly better ways to play the coal sector at this point.

For more on Headwaters, go here: http://www.hdwtrs.com

Positive results for a clinical trial of Idenix’s Hepatitis C drug were overshadowed by a glum second-quarter earnings report that was released after the close on Monday. The company lost 28 cents a share on sales of $2.4 million. Analysts had forecast a loss of 25 cents a share on revenue of $3.4 million.

The dour results led JMP Securities analyst Liisa Bayko to downgrade the shares to "market perform" from "market overweight" and question the company’s ability to raise capital going forward. She said Idenix only has have enough cash to carry it into the first quarter of 2010 and that it may need to initiate a dilutive share offering to raise capital.

In other words, this a double whammy for Idenix shareholders with a bad earnings and possible share offering on the horizon. On the bright side, some analysts speculated that the performance of Idenix’s Hepatitis treatment could prompt pharma giant Novartis AG to make an investment in Idenix. That’s a risky bet to make though.

For more on Idenix, go here: http://www.idenix.com

JDA Software reported stellar second-quarter earnings that sent the bulls running into the shares today. JDA Software reported results after the close on Monday, saying  that its second-quarter profit nearly tripled from the year before as sales climbed 8 percent. The company earned an adjusted profit of 47 cents a share, blowing by analyst estimates of 30 cents a share.

JDA makes software that helps retail stores manage their inventories and while retail stocks have been slumping, that apparently hasn’t dampened demand for JDA products.

An earnings beat like this is just the kind of news the Street loves and it makes JDA Software worth watching going forward. Oh yeah, today’s close is a new 52-week high.

For more on JDA Software, go here: http://www.jda.com

Second-quarter earnings that may be considered less worse than expected may have prompted the buying in the shares. Journal Communications, which owns the Milwaukee Journal-Sentinel and several TV and radio stations, lost $4.8 million, or 11 cents per share in the second quarter, compared with a year-earlier profit of $9 million, or 16 cents per share.

Sales tumbled 22%, but the company said it cut its debt by $22 million to $178 million in the quarter. That’s a positive, but the Street has been saying for more than a year that newspaper publishers are a dying breed and that there is simply no reason to get excited about these stocks. As I’ve said in the past, the New York Times is on the brink, so that negative sentiment is going to impact smaller players like Journal Communications even more deeply.

In addition, the weak economy means less advertising dollars and if you see that trend turning around anytime soon then you have more foresight than I do.

For more on Journal Communications, go here: http://www.journalcommunications.com

Harman shares were taken to the woodshed after the maker of audio and electronic products denied that it was in talks with a suitor interested in acquiring Harman. Not much is known about the potential other than that it may be a Saudi investment group.

Harman was the target of a takeover by private equity firm KKR and Goldman Sachs (GS.NYSE) in 2007, but the deal fell apart and was believed to be the failed transaction that touched off a spate of failed leveraged buyouts by private equity firms.

Harman has $662.3 million in debt and almost $126 million in free cash flow. The Street is never a fan of false acquisition rumors, but it is clear that Harman has some appeal to potential buyers. If this rumor materializes into something more significant, the shares should rally.

For more on Harman International, go here: http://www.harman.com

Infinera shares tumbled after Jefferies analyst George Notter said that a Chinese competitor won a contract to provide network gear to Level 3 Communications. Level 3 accounted for nearly 24% of Infinera’s 2008 sales. "In a worst case scenario, we expect Infinera — over time — to lose roughly $75 million in annual sales with Level 3," Notter said.

Notter lowered his rating on Infinera to "Underperform" from "Hold" and lowered his price target to $6.75 from $8. So if he’s right, there are more declines on the way for Infinera.

In Infinera’s favor is the fact that the company has no debt. Then again it has no positive cash flow either. Losing a major customer such as Level 3 is never good news, so the Street rightfully bashed the stock today. Good news looks hard to come by for Infinera at this point.

For more on Infinera, go here: http://www.infinera.com/

New York-based Capital Trust operates as a real estate investment trust (REIT) specializing in credit sensitive structured products. The company also makes investments on behalf of individuals and institutional investors. Given that line of business it’s surprising to see a stock like Capital Trust pop, but it’s not surprising to see the low valuation.

Capital Trust has $1.93 billion in debt with a market cap of just $33.3 million and no free cash flow. That is a startling debt load for a company of this size and that makes me apprehensive about endorsing the shares, even after today’s bullish move.

Even though some financials have made nice moves recently, the Street remains concerned about the commercial real estate sector and that means there are concerns about stocks like Capital Trust.

For more on Capital Trust, go here: http://www.capitaltrust.com

Lupus is a hard to treat auto-immune disease and the success of Human Genome’s drug Benlysta seemed to catch the Street by surprise. Benlysta still has one more trial to undergo before coming to market, but it may be available sometime in 2010 and could provided Human Genome and its partner GlaxoSmithKline (GSK.NYSE) with more than $1 billion in sales.

Citigroup analyst Yaron Werber said that the success of Benlysta may make Human Genome Sciences a takeover target for its partner.

This is bullish news to be sure for Human Genome shareholders, but the stock is already up more than 400% year-to-date as a result of today’s pop. Another day, another wild run from a biotech stock.

Wilmington Trust told the Street today that expects second-quarter earnings to come in below estimates, leading some analysts to forecast a profit of just 11 cents a share. The company is boosting its provisions for bad loans to $54 million, up from $29.5 million in the first quarter.

Wilmington Trust also expects second-quarter earnings to be hit by a pre-tax charge of about $23 million for other-than-temporary impairments on pooled trust-preferred investment securities, according to Reuters.

One analyst noted that Wilmington Trust’s tangible common equity is lower than its peers, a sign that the company may need to raise additional capital. In other words, the Street isn’t going to be confusing Wilmington Trust with Goldman Sachs (GS.NYSE) anytime soon.

In this environment, there may nothing worse for a financial services firm to say than that it needs to raise additional capital or that is setting aside more funds than previously expected for bad loans. Given that, it’s easy to see why Wilmington Trust drew Mr. Market’s ire on Friday.

For more on Wilmington Trust, go here: http://www.wilmingtontrust.com

WHX fabricates precious metals and their alloys into brazing alloys consisting of gold, silver, palladium, copper, nickel, and aluminum based materials. The company also offers electronic materials, including high performance materials, as well as silicone rubber-based insulation materials; and coated materials comprising adhesive coated cast and calendared vinyl films, cast vinyl fabric, and custom-engineered laminates, as well as coated and laminated films, foils, foams, and papers.

WHX has a fairly diversified line of business with customers in the transportation, utility, medical, semiconductor, aerospace, telecom and defense industries. Unfortunately, that hasn’t stopped the stock from tumbling from $10 in December to less than $2 in July. One problem may be WHX’s $210.1 million in debt compared to free cash flow of $12.1 million.

For more on WHX, go here: http://www.whxcorp.com/

Capitol Bancorp has been divesting assets this week in an effort to raise cash. On Thursday, the company said it sold Community Bank of Rowan, a $147 million affiliate in North Carolina, to First American Financial Management. On Tuesday, the company said it reached an agreement with Global Consumer Acquisition Corp. for the sale of 21 Colonial Bank branches in Nevada. Those branches had about $492 million in deposits.

And on Monday, Capitol Bancorp announced the sale of some banking assets in California. Throw in last week’s sales of a bank in Illinois and Capitol Bancorp has been busy divesting assets in an effort to position itself for federal assistance.

Sure, the asset sales are better than a dilutive share offering, but they also indicate Capitol Bancorp may not be in the best of financial health. The balance sheet shows as much. Capitol Bancorp has almost $560 million in debt.

For more on Capitol Bancorp, go here: http://www.capitolbancorp.com

BioCryst said its intravenous flu drug saw "positive results" in phase-three studies and that was enough to spark today’s massive rally. The company is seeking approval of its flu drug for use in treating the infamouse swine flu virus in the event of another outbreak.

BioCryst shares sold off in May after saying an oral version of the drug, known as peramivir, failed in a clinical trial. Obviously, Friday’s news was a lot better and the Street may be signaling that BioCryst is worth keeping an eye on going forward.

For more on BioCryst Pharmaceuticals, go here: http://www.biocryst.com

Take the example of MGIC Investment (MTG.NYSE), a provider of mortgage insurance. The stock soared 76 cents, or 19%, to $4.70, making it the biggest gainer on the New York Stock Exchange today. That’s despite reporting a wider second-quarter loss as foreclosures increased due to rising unemployment.

Sounds bad, huh? FBR Capital Markets may have saved the day for MGIC by upgrading the stock to "outperform" from "market perform." That didn’t do much to keep Fitch Ratings from downgrading the insurer financial strength rating of MGIC "BBB-" from "BBB" and placed it and the long-term debt and senior debt ratings of MGIC Investment Corp. on Rating Watch Negative, according to the AP.

MGIC is trying to restructure itself so that its MGIC Indemnity Corp. unit can begin writing mortgage loans. That would certainly help, but the mortgage market is fraught with risk at this point and it remains to be seen if MGIC can again be profitable.

For more on MGIC, go here: http://www.mgic.com

While there wasn’t any news of a successful trial or recently approved drug to spark the rally in ARCA Biopharma shares today, I took a look at the chart and it appears sellers in the stock may have finally acquiessed to buyers after punishing the stock over the past few weeks.

At the end of May, ARCA trade for above $13 a share, but it has been in a death spiral ever since. The stock has a long way to hit its 50-day moving average at $6 a share and it appears dubious that can even happen. Then again, some positive news to spark more buying would certainly help.

For more on ARCA Biopharma, go here: http://www.arcadiscovery.com

The sell-off in MTM Technologies, a provider of information technology (IT) solutions services, access, unified communications, virtualization, and managed services, isn’t surprising considering the company said earlier this week it will be delisting its shares from the Nasdaq.

MTM’s move to a less prestigious stock exchange doesn’t hide the fact that company has $50.6 million in debt and negative free cash flow. So we’ve got high debt, negative free cash flow and a delisting from a senior exchange. And we also have no reason to buy this stock.

For more on MTM Technologies, go here: http://www.mtm.com

Volume was brisk of course, with more than 441 million shares changing hands, compared to average daily trade of 30.4 million shares. CIT will likely be seeking what will workout to be the fourth-largest bankruptcy in US history after being crushed under an enormous debt load.

Some debt holders are considering rescue financing for CIT and The Wall Street Journal reported late Thursday that a group of CIT’s "large bondholders" are discussing a plan to exchange $5 billion in debt for equity in the firm. It is not known if the two groups of bondholders overlap in any way.

Two years ago, CIT was a multi-billion company trading for nearly $50 a share. Today it has a market cap below $160 million and a share price below $1. My how times change.

What is surprising is that federal regulators decided to experiment with letting a major financial services company implode and that it was CIT. CIT is a major lender to small and medium-sized businesses throughout the U.S. and many of CIT’s customers use loans from the company to meet payroll obligations. In other words, letting CIT fail could have aftershocks throughout the economy.

The sell-off in 3Par shares was sparked after the company projected a possible loss for the June quarter and lower-than-expected revenue. 3Par said installation delays and sluggish demand have hurt the estimate for its fiscal first quarter, which ended in June, according to the Associated Press.

3Par now expects an adjusted loss of a penny per share or a break-even quarter on sales of $44.2 million to $44.5 million. That’s down from a previous forecast of $48 million to $50 million, the AP said.

One analyst mentioned that the long-term prospects for 3Par remain bright and that the company could be an acquisition target for the likes of IBM (IBM.NYSE), Hewlett-Packard (HPQ.NYSE) and NetApp (NTAP.NSDQ) as those companies seek to compete with EMC (EMC.NYSE), the king of the data storage space.

It might be best to let the dust settle in 3Par before getting in and forcing yourself to hold the stock waiting for an acquisition that may never materialize.

For more on 3Par, go here: http://www.3par.com

What’s interesting about OXiGene’s decline today is the fact that it wasn’t tied to bad news about a failed drug trial or an FDA request for more information. You know, the usual culprits behind biotech declines. Rather, OXiGene said it will raise $10 million via a dilutive stock offering.

OXiGene said it will sell 6.25 million shares at $1.60 each in an effort to raise additional cash. OXiGene, which develops small-molecule therapeutics to treat cancer and eye diseases, has no debt, but it also has negative free cash flow. Hence the need for additional capital.

I’m never a fan of dilutive share offerings and you shouldn’t be either. Wait for OXiGene to talk about an impressive new product before getting involved.

For more on OXiGene, go here: http://www.oxigene.com

Ohio-based Ferro inorganic specialty products, including glazes, frits, enamels, pigments, dinnerware decorations, and other performance materials; organic specialty products, such as polymer specialty materials, engineered plastic compounds, pigments dispersions, and high-potency pharmaceutical active ingredients; and electronic materials comprising high-performance dielectrics, conductive pastes, metal powders, and polishing materials.

While there was no news to prompt the buying in Ferro today, other large chemicals makers such as Dupont (DD.NYSE) and Celanese (CE.NYSE) were both up today, so it’s possible that Ferro’s rise is a case of a rising tide lifting all sales.

For more on Ferro, go here: http://www.ferro.com

As is always the case with biotech stocks making large moves in either direction, there was drug data news out today on Targacept. Targacept said its depression drug candidate, called TC-5214, was successful in treating some symptoms of major depression disorders in clinical trials.

Targacept expects to start late stage trials of the drug in the second quarter of 2010 and the company is in talks with several partners for marketing rights to the drug. Through a partnership with AstraZeneca PLC, Targacept is testing drugs for cognitive disorders, including attention deficit hyperactivity disorder and Alzheimer’s disease, according to the Associated Press.

This is extremely bullish news for Targacept, especially when considering how lucrative the market for depression treatments is in the U.S. Major pharma companies derive billions of dollars in sales from depression treatments every year, but there is apparently room for another competitor and that benefits Targacept.

For more on Targacept, go here: http://www.targacept.com

A small research firm initiated coverage of Boise today, but that was about the only news to find on the name. Paper stocks haven’t been in favor for years and they have been taking a beating recently as countless daily newspapers across the country have gone out of business.

Boise has over $1 billion in debt and just over $58 million in free cash flow. Management had better get control of the debt or we could be reading more dour news on Boise in the near future.

For more on Boise, go here: http://www.boiseinc.com

News that Sinclair may seek Chapter 11 bankruptcy protection sparked the sell-off. Sinclair, which owns 58 television stations in 35 markets, has been battered by a decline in advertising spending and stymied by an enormous debt load of $1.33 billion. Holders of its 3 percent convertible senior notes and 4.875 percent senior subordinated notes may require Sinclair to buy back nearly $500 million worth of that debt within the next 18 months, according to the Associated Press.

In a filing with the SEC, Sinclair said it doesn’t have the cash to repurchase the debt and that it is attempting to restructure the debt with its creditors. The company doesn’t expect ad spending to recover until the second half of 2010.

Lest we forget that Sinclair eliminated its dividend in February and pared its workforce by 200. Media stocks have been getting blasted over the past year and if you’re not in Disney (DIS.NYSE) or other select names in the sector, you’re in trouble. I mean the New York Times (NYT.NYSE) has been pushe to the brink, so obviously a company like Sinclair is going to be in a tough spot.

For more on Sinclair Broadcast Group, go here: http://www.sbgi.net

The usual culprits behind sell-offs in bank stocks hurt Central Pacific today: Weak earnings news and a dilutive share offering. Central Pacific said it expects a wider-than-expected second-quarter loss due to higher credit costs. Making matters worse, the bank will issue $100 million in common stock to shore up its capital position.

Central Pacific Financial said it expects to post a loss of about $33 million to $37 million or $1.22 to $1.35 per share, in the second quarter, compared to the average analyst estimate of a loss of 17 cents a share.

Central Pacific expects credit costs of about $77 million to $83 million in the quarter driven by a surge in provision for bad loans compared with $29.6 million in the first quarter, according to Reuters.

Let’s see. We have a bank issuing new shares that is hampered by bad loans. The Street is telling you to stay away from this stock. Heed the advice.

For more on Central Pacific Financial, go here: http://www.cpbi.com

Hi-Tech’s robust fiscal fourth-quarter earnings results sparked the buying today. Hi-Tech earned $5.1 million, or 45 cents per share, for the three months ended April 30 compared with profit of $277,000, or 2 cents per share, a year ago. For the full fiscal year, profits and sales also rose.

Hi-Tech said sales of generic pharmaceuticals rose 95 percent to $33.3 million. Sales of the anti-glaucoma treatment Dorzolamide with Timolol ophthalmic solution helped boost sales, according to the Associated Press.

With healthcare reform looming in Washington, generic drug makers could be poised to benefit as Congress attempts to find way to cut healthcare costs. Keep an eye on how Hi-Tech performs in the coming weeks. It has broked above a long-term trendline and looks poised to run some more.

For more on Hi-Tech Pharmacal, go here: http://www.hitechpharm.com

Koninklijke’s offer values iBasis at $1.55 a share, or $48.2 million. In October 2007, iBasis received $55 million in cash from KPN in exchange for 40.1 million shares of iBasis common stock, according to press reports. iBasis also provides prepaid phone service.

The $1.55-per share offere is better nothing, but it probably does little to comfort iBasis shareholders that have held the stock for a while. This was a $3.50 stock in October 2008, but has been in a death spiral ever since then. Now the stock will disappear as a result of the acquisition and its doubtful the Street will miss it.

For more on iBasis, go here: http://www.ibasis.com/

There was no news on Valhi today, but the stock touched a 52-week low of $6.03 just a week ago, so perhaps the buying today was touched off by value-seeking investors. Valhi has 6.5% dividend yield, which is excellent, particularly in today’s environment where dividends are frequently in danger of being reduced or eliminated.

The thing that worries me about Valhi is an enormous debt load of $952 million, which is almost equal to its market cap of $961 million. Factor that in with negative free cash flow, and that’s a recipe for concern. Valhi also competes with companies such as Dupont (DD.NYSE)) and Allegheny Technologies (ATI.NYSE), both of which have better balance sheets than Valhi.

Given the wild action in Valhi shares recently, it might be best to see what kind of numbers they report during their next earnings release and if they offer any guidance for 2009 and 2010.

For more on Valhi, go here: http://www.valhi.net

CardioNet withdrew its 2009 outlook as Pennsylvania Medicare carrier Highmark cut the reimbursement rate for mobile cardiac outpatient telemetry services, according to Reuters. That news was enough to send the bears rushing in again and a Jefferies & Co. analyst lowered his price target on CardioNet shares to $5 from $17.  Cowen & Co analyst Sara Michelmore, who rates the stock "neutral," told investors to stay on the sidelines, Reuters reported.

A month ago CardioNet traded for over $18. A week ago it had a P/E of 30, which was far too high. Now it has a P/E of 18 and that’s still too high. Don’t be fooled. Even at just below $6, CardioNet shares are fraught with risk.

For more on CardioNet, go here: http://www.cardionet.com

News that American Dairy expects 2009 sales to come in below estimates sparked the sell-off. The company said it expects revenue for 2009 between $330 million and $360 million, which is below the average analyst estimate of $404.6 million. If you’re looking for a silver lining, the 2009 sales number will be between 71% and 86% higher than the 2008 number.

At the open Monday, American Dairy shares had doubled on the year. Kiss that performance good bye. The shares have traded between $6.40 and $44 in the past year, so if you got in at the lower end of the range, you’re still in good shape.

American Dairy is probably a great long-term growth story. After all, it makes baby formula in China, which has the world’s largest population Read: More babies that need American Dairy products. That said, it’s probably best to be cautious with the stock given today’s drubbing.

For more on American Dairy, go here: http://www.americandairyinc.com

Doubts are swirling on the Street that CIT can get government aid to back its corporate debt. CIT is still awaiting word on whether it will receive funds from the Federal Deposit Insurance Corp.’s Temporary Liquidity Guarantee Program, according to the Associated Press.

To date, the program has guaranteed more than $335 billion in corporate debt for various companies. CIT said it is still in talks with the government, but some analysts doubt the company will be successful in obtaining the necessary funding.

CIT faces maturing debt of $7.4 billion in the first quarter of 2010 and dwindling options with which to raise capital. CIT has been hammered by the subprime mortgage debacle and its debt ratings have been cut by both Moody’s and Standard & Poor’s.

In other words, CIT is in a death spiral. Stay away from this stock.

For more on CIT Group, go here: http://www.CIT.com

GrayMark acquires and operates independent retail pharmacy stores that sell prescription drugs and a small assortment of general merchandise. The company owns and operates 18 retail pharmacies located in Colorado, Illinois, Missouri, Minnesota, and Oklahoma.

As there was no news on GreyMark today, it’s hard to pontificate on why the stock got hammered today. One reason may be the fact that GrayMark has almost $47 million in debt, a market cap of just over $39 million and no free cash flow. Not to mention the entire healthcare sector has been on pins and needles over President Obama’s healthcare reform package.

For more on GrayMark Healthcare, go here: http://www.graymarkhealthcare.com

Barclays Capital analyst Brian A. Johnson upgraded Dana shares to "overweight" and raised his price target for the stock to $3.50 from $2. Johnson said Dana is not likely to breach its debt covenants and said the company is likely to start benefiting from cost cuts it implemented earlier this year and increased demand from Ford for auto parts.

By not violating its debt agreements, Dana will likely avoid Chapter 11 bankruptcy protection, an avenue that has been sought by rivals such as Lear (LEA.NYSE). American Axle (AXL.NYSE) is another auto parts supplier that is on the brink of bankruptcy so this sector is anything but healthy right now.

Dana said in May it was optimistic about its survival and while that outlook appears accurate, it’s far too early to be rushing into this sector.

For more on Dana Holding, go here: http://www.dana.com

News that Prana will update investors on  its PBT2 drug for the treatment of Alzheimer’s Disease at a conference in Austria this weekend touched off the buying in today’s session. Prana said results have positive thus far.

It goes without saying that Prana Biotechnology should be on your watch list for Monday’s trade. If news is good, and it appears it will be, Prana shares should rocket.

For more on Prana Biotechnology, go here: http://www.pranabio.com

Novogen had soared earlier this week on news that researchers in New Zealand found Novogen’s drug Phenoxodiol to be effective in trials of terminating proliferating T-Cells, which could make Phenoxodiol effective in the treatment of leukemia or other T-Cell-driven diseases. The drug is being developed in the U.S. as a treatment for ovarian and prostate cancers.

There was no news to prompt to the selling in Novogen today, and if I’m right about the profit taking theory, that’s not really bad newsd for Novogen shareholders. Obviously, the stock is in play and more good news about Phenoxodiol could touch off a new round of buying.

For more on Novogen, go here: http://www.novogen.com

News that a Citigroup analyst believes that there is a 70% chance that AIG’s stock is worthless encouraged voracious put buying in the August strikes and that help drag the shares lower. On June 29, AIG said  declines in the value of some European derivatives contracts could have an adverse impact on the company’s results going forwad.

In other words, AIG continues to be a poster child for financial malfeasance and if you’re bound and determined to get involved with the stock, do so from the short side. If the reverse stock split did one thing, it was to boost liquidity for the shorts. And remember this stock was booted from the Dow Jones Industrial Average. There truly is no reason to be long AIG right now.

For more on AIG, go here: http://www.aig.com

Superior offers traditional banking services at 77 locations throughout Alabama and Florida. As we have seen over the past couple of months, there is substantial risk for small banks operating in Florida due to the crash in real estate values there. We’re not saying that applies to Superior Bancorp, but it is a factor worth noting.

Superior has nearly $352 million in debt and just $120 million in cash on hand, so that’s another potential cause for concern.  The company posted a net loss of $686,000 for the first quarter after making a similar profit in the year earlier period.

For more on Superior Bancorp, go here: http://www.superiorbank.com

If you think that auto parts companies have been struggling in the wake of the Chrysler and GM bankruptcies, you would be correct. American Axle rival Lear (LEA.NYSE) recently entered bankruptcy protection and American Axle itself if probably headed down a similar path.

Yesterday, American Axle amended a credit facility, but that didn’t keep the bears at bay and the stock was hammered by 30%.  JPMorgan analyst Himanshu Patel said  he thinks there is a better than 50% chance American Axle will seek bankruptcy protection.

As of June 30, American Axle had about $280 million of
liquidity, consisting of available cash, short-term investments
and committed borrowing capacity on its credit facility, according to Reuters.

That’s enough to get interested in this stock here. The only option truly is to wait and see what becomes of American Axle once enters and reemerges from bankruptcy court.

For more on American Axle, go here: http://www.aam.com

ARYx was hammered by sellers on news that the company’s experimental anticoagulant tecarfarin failed to meet a key treatment goal in a late-stage study, according to press reports. The treatment was to tested on patients with blood clot issues and a history of heart problems.

Jefferies & Co. analyst Dr. Marko Kozul  maintained his "buy" rating on ARYx, but slashed his price target to $7 from $9. He noted that a partnership with a larger pharma player is possible later this year for ARYx.

That seems to be the order of the day for small biotech companies that are struggling to get their drugs to market: Hook up with larger pharma company that has cash to spend but a weak pipeline of new drugs. We’ll see if ARYx travels this route.

For more on ARYx, go here: http://www.aryx.com

Steak n Shake shares surged after the company said its same-store sales for its fiscal third quarter jumped 5% on a big boost in customer traffic, according to the Associated Press. The company said its customer traffic climbed 13.4 percent for the quarter ended July 1.

Indiana-based Steak n Shake has about 415 company-owned and 75 franchised restaurants in 21 states. This is a good story, especially in these trying economic times, but beware of Steak n Shakes $165.1 million in debt which easily surpasses its levered free cash flow of $17.7 million.

For more on Steak n Shake, go here: http://www.steaknshake.com

Gravity said sales for its first quarter ended March 31 rose by more than 9% to almost $13 million from $11.9 million a year earlier. Sales in the company mobile game, licensing and subscription units all rose impressively during the quarter.

Gravity could be an interesting way to play South Korea, a market that has been producing robust returns this year. The company has no debt and almost $1.60 a share in cash. The Street will like that story.

For more on Gravity, go here: http://www.gravity.co.kr

Just as there wasn’t much in the way of news to explain Monday’s buying, there was no news that would have provoked today’s sell off, so it’s obvious today’s pullback in the Puerto Rico-based bank was simply profit taking.

It was a mixed day for banking stocks today, but most of the bigger names in the sector closed down on the session and that glum performance may have trickled down to Santander Bancorp. As I noted yesterday, this is probably a speculative play until the banking sector shows signs of considerable improvement.

For more on Santander Bancorp, go here: http://www.santandernet.com

Weaker than expected second-quarter results were the culprit behind today’s sell-off. Hansen Medical expects second-quarter revenue of $3.1 million to $3.3 million, while analysts on average expected it to post revenue of $8.7 million, according to press reports.

The company also withdrew its outlook for 2009 system placements given the weak market in which it currently operates. Analysts at Lazard Capital Markets and Brean Murray lowered their ratings on Hansen Medical to "hold" from "buy."

All I can is this not the environment for earnings disappointments. The Street will take stocks that falter to the lower end of their estimates to the woodshed. Just ask Hansen Medical.

For more on Hansen Medical, go here: http://www.hansenmedical.com

A strong second-quarter earnings report sent buyers rushing into GenCorp shares. The company said second-quarter profit rose 59%, helped by lower costs. GenCorp  earned $11 million, or 18 cents per share, for the period ended May 31, compared with $6.9 million, or 12 cents per share, a year ago.

GenCorp supplies parts to the aerospace industry and manages a real estate portfolio, so it’s hard to get too worked up about a company exposed to those sensitive industries. Not to mention the company’s sales slid 6% in the quarter.

The Street’s affinity for cost-cutting is limited, so GenCorp will have to find a way to grow the top line at some point before the bears get a hold of this stock.

For more on GenCorp, go here: http://www.gencorp.com

The buying spree was touched off by news that researchers in New Zealand found Novogen’s drug Phenoxodiol to be effective in trials of terminating proliferating T-Cells, which could make Phenoxodiol effective in the treatment of leukemia or other T-Cell-driven diseases. The drug is being developed in the U.S. as a treatment for ovarian and prostate cancers.

What’s interesting is the fact that US news services didn’t pick up the story on Novogen today and the stock still popped. Novogen is still well off its 52-week high of $7.45, but more positive trial data on phenoxodiol could send the shares surging again. The Street could be saying now is the time to keep an eye on this stock.

For more on Novogen, go here: http://www.novogen.com

The sell-off was triggered by news that Spectrum received a request for more information on its drug Zevalin, which is used to patients with relapses of non-Hodgkin’s Lymphoma. Spectrum has applied to have Zevalin be used as a first option treatment for the disease.

Spectrum said that the FDA’s data request is not for any additional clinical studies or analysis of data. Well, that begs the question: What is the reqeust for?

In May, Spectrum was a $2.50 stock, though it recently traded as high as $8. The company said last week it raised $21 million in new capital from investors, so today’s news isn’t going to scare Spectrum out of business.

That said, I’m eager to here what the FDA is after and if Spectrum can appease the agency. The share price probably hangs in the balance.

For more on Spectrum Pharamaceuticals, go here: http://www.spectrumpharm.com

The sell-off was triggered by a host of factors. Regis said same-store sales fell 4% in the fourth quarter and that is planning on closing 80 underperforming stores.

To make matters worse, Regis is planning a dilutive share offering of about 11.5 million shares and $125 million aggregate principal amount of convertible senior notes due 2014 to raise capital and reduce its debt by $267 million.

Regis also amended its credit facility and reduced its borrowing capacity by $50 million to $300 million. According to Reuters, Regis said it expects total debt of $635 and $650 million at the end of fiscal 2009, below its prior target of $700 million. Regis’ debt stood at $807 million as of Sept. 30, 2008

The silver lining here is that Regis is reducing its debt. That’s really the only good news that I can see.

For more on Regis, go here: http://www.regiscorp.com

Santander Bancorp operates as the holding for Banco Santander Puerto Rico that provides traditional banking services on the island of Puerto Rico. The company also has a brokerage and a wealth management business.

Now don’t get too excited about today’s pop. Santander has $1.3 billion in debt, twice its cash position and more than triple its market cap.

If you’re a believer in Puerto Rico’s economic fortunes, which are explicitly linked to those of the U.S., Santander Bancorp could be a nice play on the cheap. It trades at 17 times forward earnings and that seems fair.

For more on Santander Bancorp, go here:  http://www.santandernet.com

And again, there was no news catalyst to explain the pop in Patrick shares. The Indiana-based company counts the recerational vehicle and manufactured housing industries among its top customers and as I said last week, that makes any surge in the stock all the more vexing as these are two of the worst sectors to be dependent on in the current environment.

Patrick Industries has over $59 million in debt with a market cap of just $13.9 million. No analysts follow the company, though institutional ownership of the shares is surprisingly strong. That’s no enough to compel me to tell you to buy this stock though.

Fore more on Patrick Industries, go here: http://www.patrickind.com

Ah, what does one say about the textiles industry? To say it has been struggling in recent years would be kind. Unfortunately, this is the price we pay for globalization. Companies like Unifi have struggled to compete with the vastly lower costs offered by rivals in developing countries.

Unifi is 40-years old, but its balance sheet is highly leveraged right now with nearly $200 million in debt, but just a $75.7 million market value. Unifi does have $33 million in levered free cash flow, and hey, that’s better than nothing.

For more on Unifi, go here: http://www.unifi-inc.com

The shares fell to their lowest level in 10 years after news broke that a Food and Drug Administration review standard places the approval of Discovery’s drug Surfaxin in doubt. If approved, Surfaxin will be used to treat respiratory ailments. Discovery has been trying to gain FDA approval for Surfaxin to be used on infants suffering from breathing problems.

Discovery is also facing funding issues and that may lead the company to form a partnership with a bigger rival, or as shareholders can only hope for at this point, put itself up for sale. If you’re looking to invest in a small biotech company, perhaps Elan (ELN.NYSE) is the way to go because they’ve already partnered with a larger rival.

For more on Discovery Laboratories, go here: http://www.discoverylabs.com

Elan told the Street it was exploring strategic alternatives earlier this year, and while the acquisition of J&J is not an outright purchase of Elan, we cannot rule such a move out of the equation due to the fact that big pharma companies are desperate to bolster their drug pipelines. Acquisitions of more nimble and small biotech companies represent the perfect way to boost pipelines.

Elan said it plans to use the new funds to cut its debt by 70% to about $400 million. Moody’s Investors Service said it has placed Elan’s ratings under review for a possible upgrade, press reports noted.

Sales of all Alzheimer’s drugs totaled $3.4 billion in the U.S. last year, according to industry data. The Street seems to think J&J can make Elan’s Alzheimer’s treatment bapineuzumab a success because it has better resources than Elan does. I would agree and if J&J eventually takes out Elan via an full acquisition, even better.

For more on Elan, go here: http://www.elan.com

Talk about an odd move, especially given the circumstances surrounding Patrikc’s two main sectors that it supplies. Manufactured homes and recreational vehicles suffer mightily in tough economic times and Patrick’s share performance reflects that. This was a $6 stock in October and has been in a death spiral ever since.

Patrick Industries has over $59 million in debt with a market cap of just $13,9 million. Granted the company has been around of 50 years, so I’m not saying it’s going to disappear, but if consumers are worried about their jobs, they’re not going to be buying polo shirts and khakis, let alone recreational vehicles. It’s too risky to get involved with Patrick Industries here, even at the low valuation.

For more on Patrick Industries, go here: http://www.patrickind.com

Compton Petroleum sells crude oil and natural gas liquieds primarily to refineries and marketers of crude oil and natural gas liquids. Given the recent strength of the Canadian energy market, today’s plunge is somewhat vexing.

Perhaps this is an issue of the men being separated from the boys and if you’re wanting to play Canada’s burgeoning energy sector, sticks with the bigger names like Nexen (NXY) and Suncor Energy (SU). Compton’s debt load is six times greater than its market cap and it has no free cash flow. You know what that means. Stay away.

For more on Compton Petroleum, go here: http://www.comptonpetroleum.com

CardioNet now expects a profit of 30 cents to 35 cents per share and $156 million to $160 million in revenue this year, down from an earlier outlook for 69 cents to 73 cents per share in profit, and revenue between $170 million and $175 million. To make matters worse, the company withdrew its guidance for 2010 and 2011.

Analysts were expecting a profit of 66 cents per share in 2009, $1.25 per share in 2010 and $1.85 per share in 2011. Oh, the pain doesn’t end there. Analysts from Citigroup and Roth Capital downgraded the stock to "hold" from "buy."

CardioNet is downright expensive at 30 times trailing earnings given the dour news it released today. It’s hard to be a fan of a stock with 30 PE that is lowering its profit outlook.

For more on CardioNet, go here: http://www.cardionet.com

Georgia-based Zep releases fiscal third quarter earnings before the bell Thursday and analysts are calling for 14 cents a share in profits. Obviously the Street is expecting the company to at least meet, if not beat that number.

Keep an eye Zep’s earnings report tomorrow and through the summer. This could be an interesting smallcap defensive play and summer should be a robust sales season for Zep as it makes weed killers, among other products. The company also has more than $19 million in free cash flow, another bullish sign.

For more on Zep, go here: http://www.zepinc.com

Audiovox sells mobile multi-media video products, including in-dash, overhead, headrest, and portable mobile video systems; autosound products comprising radios, speakers, amplifiers, and CD changers; satellite radios, such as plug and play models, and direct connect models; automotive security and remote start systems; and automotive power accessories

In other words, Audiovox is a consumer electronics play, and I can get behind that…in a good economy. Audiovox has a stalwart balance sheet with just $14 million in debt and over $59 million in free cash flow. That is a good sign and who knows? Maybe that will entice a buyer to acquire Audiovox.

In the short-term, I’m bullish on this stock, but only as a swing trade, not a long-term buy-and-hold play.

For more on Audiovox, go here: http://www.audiovox.com

New Oriental said it lost $3.7 million, or 30 cents a share in fiscal 2009, compared with a profit of $4 million, or 32 cents a share in fiscal 2008 as sales slumped 48%. The company’s account deficit soared to almost $32 million as it worked to self-fund expansion and reduce debt.

Due to what New Oriental call an "extraordinarily bad year," the company has pushed back the opening of four methanol plants until 2010. On the bright side, the company said some of "the fog is beginning to lift" and that demand from China could pick up in the coming months.

Obviously New Oriental is a commodities play as a well as a play on China, making the stock that much more alluring than your average stock. New Oriental also makes fertilizer, a formerly beloved market sector, so this could be a great name to pick-up on the cheap before the commodities arena rips higher.

For more on New Oriental, go here: www.neworientalenergy.com.

News that the company will sell 25.5 million in stock was the culprit behind the sell off. As I have noted so many times in the past, these dilutive share offerings that appear to be all the rage these days by companies needing capital really draw the market’s ire. After all, selling more shares hurts the current shareholders.

Institutional buyers of the offering can sell the shares later for $4.62 a share, a handsome premium to today’s close in Raser’s stock. I can only assume that the offering will go toward reducing some of Raser’s nearly $90 million in debt. Of course, Raser has little in the way of free cash. I’m not impressed.

For more on Raser Technologies, go here: http://www.rasertech.com

News that Exco will sell Britain’s BG Group PLC a stake in its Haynesville shale natural-gas assets for $1.3 billion sparked the buying spree. Yesterday, Exco said it will sell properties in Kansas, Oklahoma and Texas to Encore Operating LP for $375 million.

Under the terms of the today’s deal, BG Group will acquire a 50 percent interest of 120,000 net acres of Haynesville shale, a region in Texas and Louisiana rich in oil and natural gas.

Exco believes the deal with BG Group will help strengthen its balance sheet and focus on more exploration opportunities going forward. Apparently Mr. Market agrees. Exco could be a $17-$18 stock if oil continues its upward ascent.

For more on Exco Resources, go here: http://www.excoresources.com

News that Novavax signed a deal with Spain’s health ministry and a specialty drug maker there to produce flu vaccines sent the shares soaring. Novavax and Spain’s ROVI Pharmaceuticals are building a factory to make the vaccines with the hopes of selling the products within the European Union by 2012.

Novavax develops a vaccine that acts like a flu virus, but triggers strong immune responses in the human body, causing the body to fight off flu symptoms. Novavax will retain exclusive licenses for the vaccines in North America, Asia and Australia and also would be able to sell them in other countries, except Spain and Portugal, according to the Associated Press.

This is fine news for Novavax and if swine flu reemerges as a threat, look for the shares to receive another boost. For less than $4 a share, investors could do a lot worse than Novavax.

For more on Novavax, go here:  http://www.novavax.com

News that Allis Chalmers said it will buy up to $74.8 million of its senior notes with funds from a rights offering completed on Friday probably prompted the sell-off. The company also expects to reduce debt by $8 million to $10 million in the future and have $41 million in cash on hand later this year.

Allis Chalmers provides its services to companies exploring for oil and natural gas onshore in Texas, Louisiana, Oklahoma, New Mexico, Colorado, Pennsylvania, and Arkansas and offshore in the Gulf of Mexico; and Argentina, Brazil, and Mexico.

In other words, Allis Chalmers is an oil services play and that group, in addition to be exceptionally volatile, is deeply correlated to the price of oil. That makes me interested in a company like Allis Chalmers, especially at the current valuation and given the fact that company seems committed to paring its debt.

For more on Allis Chalmers Energy, go here: http://www.alchenergy.com

Dour earnings news for 2008 was the culprit behind the sell-off in Euro Tech’s shares. The company earned just $149,000 in 2008, compared to $422,000 in 2007. That’s a 65% decrease and not a good thing for Euro Tech shareholders. Oddly enough, Euro Tech’s sales rose 16% last year.

The company doesn’t expect 2009 to be much better, calling the first five months of this year "turbulent." Euro Tech has been cutting overhead and reducing staff and even that may not be enough to the waters flowing in the right direction this year. In other words, the Street is telling you to stay away from Euro Tech shares. Heed the advice.

For more on Euro Tech Holdings, go here: http://www.euro-tech.com

While there was no news on China Distance Education today, the stock may have been rising in anticipation of Apollo Group’s (APOL.NSDQ) earnings release after the close. Apollo Group, operator of the University of Phoenix, did not disappoint, beating analyst estimates, so it will be interesting to see China Distance Education’s performance on Tuesday.

Of course, Chinese stocks have been on fire lately. A fact I have so often lamented. Education stocks, at least the US issues, have probably had their day in the sun, but the sun could just be starting to rise for companies like China Distance Education. The company’s PE is 153, so this is definitely a growth story. Hey, there aren’t a lot of low PE’s among Chinese stocks, so don’t fret and give China Distance Education a look.

For more on China Distance Education, go here: http://www.cdeledu.com

NewBridge offers traditional banking services in North Carolina and Virginia and its recent price action has been interesting to say the least. Sure, a pop on increased volume is always nice, but today’s action had to erase Friday’s plunge. Net-net your ahead of if you bought NewBridge last Thursday, but it would be nice to see more days like today and fewer like Friday.

What is VERY alarming about NewBridge Bancorp is its enormous debt load. At $237.8 million, NewBridge’s debt dwarfs its market cap of $34.4 million. And as has been noted frequently, small banks are having a hard time raising capital, so where does NewBridge turn when it decides to reduce that debt?

It’s fair to say $237.8 million in debt for a $34 million company is like an 800-pound gorilla in the room. You can ignore it for a while, but eventually the gorilla will make its presence known.

For more on NewBridge Bancorp, go here: http://www.newbridgebank.com

The selloff was prompted by news that Constellation’s lenders set the company’s borrowing base at $225 million, down from a previous limit of $265 million. As of June 25, Constellation’s credit lines are 98% drawn.

Under the terms of Constellation’s credit agreements, it cannot pay dividends to shareholders if its credit lines become more than 90% drawn. In other words, Constellation cannot even pay shareholders to suffer through this dark period for the company.

Knowing this, it’s impossible to recommend the shares until Constellation cleans up its balance sheet. It is quite an indictment of the company’s management that is having these difficulties while oil prices have doubled in the past four months.

For more on Constellation, please go here: http://finance.yahoo.com/q/pr?s=CEP

Design Within Reach chairs and tables, workspace and outdoor furniture, lighting, floor coverings, bedroom furnishings and related accessories, bathroom fixtures, fans, and other home and office accessories.

This is exactly the kind of stock that suffers in a weak economy. It’s almot like the Street has a radar for companies like Design Within Reach and as the soon as the economy weakens, these companies get slaughtered. This was nearly a $4 stock a year ago. Now it’s being delisted.

And let’s be clear: Being relegated to the over-the-counter world or the Pink Sheets is not a good thing when a stock has already traded on a senior exchange.

For more on Design Within Reach, go here: http://www.dwr.com

The move by Conseco will increase its capital position and deferred tax allowance by $18 million in the third quarter of 2009, the company said. Conseco will transfer to Wilton Re approximately $409 million in cash and policy loans and $466 million of statutory policy and other reserves.

As have many insurance companies, Conseco has been battered over the past year. On June 26, 2008, Conseco was a $10 stock. It traded as low as 51 cents earlier this year. Insurance is still a risky sector to be making bets in and this news out of Conseco, while positive for current shareholders, shouldn’t fool anyone into thinking the water is safe for a significant bet on the stock.

For more on Conseco, please go here: http://www.conseco.com

China-Biotics makes products to reduce blood pressure, treat blood sugar conditions and energy supplements. Its products are sold in drug stores and supermarkets throughout China.

As I have noted several times lately, China is hot and has been hot throughout the course of 2009, so that alone makes China-Biotics compelling. The addition to an important index could increase the attention the Street pays to the company as well.

Of course, I should not gloss over the fact that the company has over $23 million in cash flow, which can easily tame is $18 million in debt.

For more on China-Biotics, please go here: http://finance.yahoo.com/q/pr?s=CHBT 

Jackson Hewitt said profits for its fiscal fourth quarter fell to $41.3 million, or $1.45 per share, from $57.5 million, or $2.02 per share a year ago. Sales plunged 17% to $141.2 million from $169.4 million a year earlier.

Jackson Hewitt said it had a double-digit decline in tax returns prepared for the 2008 tax year. That’s not good news because tax returns are getting increasingly complex and one would think this would lead more folks to seek professional help from a firm like Jackson Hewitt. In fact, the company prepared 13% fewer returns last year than it did in 2007. Ouch.

For more on Jackson Hewitt, please go here: http://www.jacksonhewitt.com

Of course, a drug trial gone bad was the culprit. Insmed said its drug Iplex failed to treat the most common form of muscular dystrophy in a midstage study. Insmed is planning to ask the Muscular Dystrophy Association for permission to conduct another Phase II trial focusing on patients that have conditions that may react positively to Iplex.

Throw today’s news on top of the fact that Insmed’s CEO resigned last week for health reasons, and there’s not a lot of positive catalysts at play here. At least the company only has $1.74 million in debt and relatively strong balance sheet.

For more on Insmed, go here: http://www.insmed.com

Terms of the deal state that each common share of Tween Brands will be exchanged for 0.47 shares of Dress Barn common stock. Dress Barn will assume almost $165 million in Tween Brands debt. Tween Brands is a former unit of the Limted (LTD.NYSE).

Perhaps news of this acquisition will spark a wave of consolidation in the apparel sector, which has been battered by the weak economy. There are certainly some buys to be had for the sector’s stronger names.

For more on Tween Brands, go here: http://www.tweenbrands.com

The buying was sparked by anticipation of news that China Agriculture has entered into a new agreement with Shanghai Nine Dragon Co. Ltd. to work on projects related to Shanghai Nine’s seven-star hotel. The total value of the contract could be as high as $500 million.

The pop today was interesting because the news was announced after the close of US markets, so it will be interesting to see how China Agriculture performs in Friday’s trade. Even more interesting is the fact that China Agriculture said a project it had been working on in Singapore has been terminated.

I don’t have a crystal ball, but it’s safe to say China Agriculture is in play. Put it on your Friday watch list.

For more on China Agriculture, please go here: www.caebuilding.com.

The catalyst? The fact that American Greetings’ lowered profit estimates for the first quarter beat the estimate by the one analyst that bothers to follow company. The company earned $10.0 million, or 25 cents a share, compared with $13.3 million, or 27 cents a share, a year earlier. The analyst estimate called for 20 cents a share for the quarter.

Don’t get too excited. American Greetings beat the estimate by reducing its workforce, not by selling more greeting cards. On the bright side, American Greetings does expect to have $70 million in cash flow for 2009.

Despite the somewhat bullish news today, the Street knows that companies cannot cut their way to profitability forever and at some point American Greetings is going to boost profits the old fashioned: By convincing consumers to buy their products at higher levels than they are currently.

For more on American Greetings, go here: http://www.americangreetings.com

The buying spree was touched off by news that MTM and one of its partners, privately held Mobile Armor, received a contract to protect electronic data for the U.S. Navy. MTM said the contract could be worth as much as $40 million. The move in MTM’s stock makes its returns positive for the year, though investors should note MTM’s debt load is more than 10 times its market cap.

Any company that depends on the government for the bulk of its revenues can be an interesting play, though MTM would be on the speculative end of that spectrum. Keep an eye on the shares perform in the coming days to see if this announcement induces fresh buying  or just a sell-off.

For more MTM Technologies, go here: http://www.mtm.com

There was no news out on Salem today, though it bears noting that the longer the stock trades below $1, the greater the chances are that the company could have its shares delisted by the Nasdaq. Nasdaq hasn’t commented on such an action to date.

Salem owns 93 radio stations, but media stocks have been squarely in the Street’s crosshairs over the past year as advertising revenues have tumbled. It’s hard for big media players like Fox and Disney to boost ad revenues in this environment, so I can only surmise that small companies like Salem are suffering as well.

For more on Salem, go here: http://www.salemcommunications.com

A weak economy that has led to fewer consumers dining out has likely bitten into Morton’s bottom line, not to mention the fact corporate travel has also been pared, affecting another important source of revenue for the company.

I’m certainly a fan of the product Morton’s puts out, but it’s hard to be a fan of the stock right now. I mean casual dining restaurant operators like Darden (DRI) are missing profit calls by wide margins. In the case of Darden, profits shrank 21% from the year earlier period, so one can only imagine how higher-end restaurants like Morton’s have been impacted by the recession.

Making Morton’s shares even tougher to bite into is the high debt and lack of free cash.

For more on the company or to make reservations, go here: http://www.mortons.com

Allied Capital is a private equity firm specializing in investments in small and middle market companies and as I discussed yesterday when I wrote about Fortress Investment Group (FIG.NYSE), the current environment is, shall we say, difficult for private equity firms.

Crimped credit markets make it hard to execute leveraged buyouts and even though so many possible acquisition targets for a company like Allied Capital have depressed share prices, making them ripe for the picking, Allied and its peers can’t access the cash needed to make deals happen.

Allied isn’t helped by the fact that its debt load is more than quadruple its market cap. The shares are down almost 80% in the past 52 weeks and it’s hard to see any positive catalysts emerging in the near-term to spark interest in the stock.

King Pharamceuticals (KG.NYSE) is jointly developing the drug with Acura. While the FDA’s comments on Acurox are not final, the issue at hand appears to be Acura’s inability to produce the proper data related to Acurox, which contains potent painkillers that some users can become addicted to.

Acura still boasts an exceptionally high P/E of almost 50. The company is over 70 years old and that is encouraging from the standpoint that Acura isn’t likely to just disappear if Acurox fails. Investors should keep an eye on the stock on June 30, next Tuesday.

The company owns 67 properties, including office buildings, furniture outlets and retail stores. Like so many REITs, One Liberty is saddled with a high debt load. According to recent data, the company has over $253 million in debt, but its market cap is just $65 million.

Keep an eye on One Liberty because if it announces news regarding its ability to refinance that debt, the stock will be in play again. For long-term investors, a 16.1% dividend yield has to be appealing.

LabCorp said the deall will reduce earnings this year, but will be slightly accretive in 2010. The company has long coveted treatments for HIV and cancer and will now enter those markets via the acquisition of Monogram.

Monogram is nothing more than an arbitrage play at this point, but cancer and HIV treatments will always be on the Street’s radar so look into some of Monogram’s competitors as possible takeover targets in the future.

At its core, Fortress Investment Group is leveraged buyout firm dependent on access to credit to fund acquisition to create value for investors. With credit markets being tight in the wake of last year’s financial calamity, private equity firms like Fortress are struggling to access the cash they need to execute buyouts.

Fortress went public approximately two years ago and the shares have lost about 75% of their value in that time. That said, when the economy rebounds and credit markets return to normal, Fortress could be an interesting stock to own.

After all, this is a well-known company on the Street and it has some of the brightest minds around working there. And we cannot forget that foreign sovereign wealth funds love to pour money into US hedge funds.

The sell-off was prompted by news that LodgeNet will sell $50 million in preferred stock to raise capital. LodgeNet plans to grant initial purchasers a 30-day option to buy up to an additional $7.5 million of preferred stock, according to press reports.

The preferred shares are convertible to common stock and that’s not good news for existing shareholders because today’s offering is dilutive.

LodgeNet has been and will continue to be hampered by lower occupancy rates at hotels across the world as travel spending suffers at the hands of a weak economy. Look for good news from airlines and hotel operators before buying shares of LodgeNet.

Volume was nearly six times the daily average and perhaps one theory behind the robust gain and increased volume is news that Sally Beauty is presenting at a Barclays Capital investor conference this week.

Texas-based Sally Beauty sells products from the Clairol, Revlon and Conair brand names. The company operates nearly 4,000 stores in North America. Shares of Sally Beauty are down 17.2% this year and this is another example of a company where the debt far outweighs the market value so keep an eye on this one as a short candidate. Mr. Market hates big debt and little market caps.

In fact, Ohio Legacy rose $2, or 133%, to $3.50 making it the biggest gainer on the Nasdaq. Volume was just a bit less than normal and there was no news to prompt the buying spree.

Smallcap banks have been hammered lately. Ohio’s economy is in shambles and the market gets punished today, yet somehow this bank, with a market cap of $7.74 million more than doubles. How odd, that’s all I can say.

Play this hand at your own risk.

The demise of many large daily newspapers has been reported recently and that lowers demand for paper. People reading books via Kindle impacts book publishers’ demand for paper and pulp, too. Throw in the fact that almost every mail-order retailer has a Web site customers can use in lieu of catalogs and the environment for paper producers is downright toxic.

Sappi shares are the epitome of their industry’s decline. They traded for almost $13 a year ago today. The Street sent the warning signs about the paper industry long ago. Heed the advice and stay out of this sector.

There was no obvious catalyst for the sell-off though one guess might be the fact the company said it will pay its seven-cent a share quarterly dividend in spite of having $67.8 million in debt and a market value of just over $28 million.

Kudos to First Business for continuing to pay its dividend, an action eschewed by many banks over the past 18 months. However, it appears the Street may be thinking that debt load should be reduced. I’d have to agree.

Banks in the Midwest have been imperiled by a weak regional economy and we’ve already seen multiple smallcap banks taken to task by the Street, so it might behoove First Business to tidy up its balance sheet.

Hypercom makes payment processing machines used at the point of purchase. Think of those things you slide your credit or debit card through at a retail or grocery store. One could argue a company like Hypercom is poised to benefit as credit and debit cards surpass cash and checks as preferred payment methods.

That said, Hypercom shares are down 74% in the past 52 weeks, so perhaps they’re putting in a bottom. The company’s debt load appears to be managable given its cash situation, so it could be a decent speculative play here.

It has been a familiar refrain lately. The Street has smallcap banks in its crosshairs, but the Street wants to pummel any Florida-based bank it can get its hands. Just a few weeks ago, BankUnited Financial, the largest Florida-based bank, became a ward of the FDIC and its remains were acquired on the cheap by a group of private equity investors.

Given the dour real estate market in Florida, Great Florida’s rise today is all the more perplexing. The company has over $355 million in debt and negative cash flow and that debt load is more than eight times its market value. Yikes. Those are not encouraging numbers.

The Pennsylvania-based bank started the offering last November at 10% discount to the market price of its shares in the hopes of raising as much as $75 million. What stock offering wouldn’t be a success with a 10% discount, I wonder.

Then again National Penn traded over $14 for most of November 2008 and even spent some time above $17, so purchasers of the offering in late 2008 have had to deal with some pain.

One has to wonder why the stock popped if the company fell $2 million short of its goal and shareholders were diluted in the process. Maybe the Street is just desperate for good news out of the banking sector.

The contract will likely help student lenders such as Nelnet and rival Sallie Mae (SLM.NYSE) offset any potential losses that may come from President Obama’s desire to stop subsidizing these companies and allow the government to lend money to students directly. President Obama has said such a move would save taxpayers as much as $4 billion a year.

So all is well for student lenders again (maybe) and the Democrats have proved they’re no smaller fans of big business than their Republican colleagues are. Some things just don’t ever change in Washington.

Security National is engaged in a smattering of businesses, the main ones being life insurance, mortgages and cemeteries. Running a cemetery and mortuary seem like good businesses to be in during a recession, but life insurance and mortgage are businesses that have paid a visit to the cemetery and the Street doesn’t yet know when they’ll be born again.

If Security National specialized in death, that would be one thing, but apparently death specializes in Security National and the insurance and mortgage businesses are only holding this company back.

The maker of the Kate Spade and Juicy Couture brands, among others, said it expects to report a wider loss for the current quarter, which ends July 4, than the 32-cent per share loss currently forecast by analysts.

The company merely said that unspecified items are the culprit behind the dour news and didn’t elaborate further. That probably spooked investors in selling more of the shares.

Here’s what the Street is saying: Retail stocks are a tough place to find winners right now, but there are some, just not Liz Claiborne. Desperate for a winning retail play? Try Aeropostale (ARO.NYSE).

Investors continue to remai concerned about Ashford’s loan portfolio and the company’s lengthy proceedings with Extended Stay LLC in bankruptcy court. Ashford is one of Extended Stay’s largest creditors, owning a $164 million loan to the hotel operator.

Yesterday, Extended Stay won the right to use cash against which creditors have a claim to stay operating and there are rumors a private equity firm may acquire Extended Stay on the cheap.

None of this is good news for Ashford and the Street is telling you to stay from the shares. Heed the advice.

The sell-off was sparked on news that cigarette giant Reynolds American (RAI.NYSE) won a patent infringment lawsuit filed by Star Scientific. Star claimed Reynolds American infringed on patents related to a way to treat tobacco to prevent tobacco-specific nitrosamines from forming.

Star said it will seek a new trial and if that option isn’t granted it will take the case to the the U.S. Court of Appeals for the Federal Circuit. In other words, the drama isn’t over. Not by a long shot.

That said, it could be worth keeping on eye on Star Scientific. If it can gain a more favorable outcome in court, the shares may jump.

There was no news directly impacting MetroGAS today, so the move was odd, but perhaps investors are starting to see that natural gas is undervalued. Nat gas futures have substantially lagged crude oil’s stellar performance in recent months.

Smallcap energy names are always an exciting way to play the energy complex and the fact that MetroGAS is an emerging markets play makes the shares all the more intoxicating. The stock trades at a substantial discount to its $4.56 book value, so it could be a value play at these levels.

Analysts said the news about Trofex is a substantial advancement in the treatment of prostate cancer. Molecular Insight plans to conduct additional studies to investigate the performance of the radio-labeled small molecules in patients with metastatic prostate, press reports said.

This is huge news for patients and for Molecular Insight shareholders and it makes the stock worth watching going forward. The rest of this week will be telling about just how bullish traders are on the stock. If a sell-off doesn’t occur, take that as a positive sign.

Ashford was downgraded to "underperform" from "neutral" by Robert W. Baird analyst David Loeb. Loeb said Ashford faces further problems with its loan portfolio and that is now worth just 25% of book value.

This is the kind of news that can shake REITs and their investors and it is hard to say the well of negative REIT news is likely to dry up anytime soon given the state of affairs in the commercial real estate sector.

It is clear the Street has REITs pegged for more declines, so take a pass unless you’re in a bearish state of mind.

The sell off was prompted by news that the FDA found Zicam, a cold remedy made by Matrixx, has caused 130 patients to lose their sense of smell since 1999. While the FDA did not recall Zicam, it did order Matrixx to cease production of the product.

I’ll eschew any cute olfactory references and just give you the skinny: The Street loves to pound stocks like Matrixx on news like this so it’s hard to endorse the shares until some good news comes out and that may not happpen for a quite a while. Sniff out some better pharma opportunities.

The company said after the close Monday  that profit for the quarter ending April 25 totaled $5.3 million, or 10 cents per share, compared with a loss of $4.4 million, or 9 cents per share, last year. Adjusted results showed a profit of 7 cents a share when analysts had been expecting a loss of 11 cents.

In addition, Raymond James reaffirmed its "strong buy" rating on La-Z-Boy shares, saying the company is well posotioned to benefit when the economy recovers. When that will happen is anybody’s guess, but the Street appears to be a fan of La-Z-Boy here. The company has almost $36 million in levered free cash flow.

The buying in Voxware shares may have been sparked by news that the U.K.’s Somerfield Stores grocery chain is expanding its use of Voxware products. Somerfield operates over 800 stores across the UK with nine out of 10 located in downtown areas or neighborhood locations. No financial terms were disclosed.

Voice recognition software can be considered a hot, but speculative investment area and it appears Voxware is in the sweet spot of the industry. A few more announcements like today’s and Voxware could quickly shed its smallcap status.

An affiliate of the Emmes Group of Cos. purchased the property at what was believed to be a 40% discount. Maguire also announced that it is in discussions with a lender to renogiate terms of commercial mortgage-backed securities loan that the company anticipates it will default on if terms aren’t amended.

Maguire, along nearly every other commercial REIT, has been hammered by slumping occupancy rates as tenants either go out of business or seek cheaper rents.

The stock traded for over $13 a year ago, so today’s move, while not enough to bring the shares all the way back, is significant. Keep an eye on Maguire to see how its refinancing efforts go.

Trial results released today show Jazz’s drug candidate sodium oxybate, or JZP-6, is effective in treating the pain condition fibromyalgia. More than half of the nearly 550 patients in the trial showed some signs of improvement at the end of the 14-week trial period, press reports noted.

Jazz expects the FDA to approve the drug later this year and that could be another boon for shareholders. With the approval still lingering, there may be some room to run in Jazz shares.

Horizon said last week that it settled a $20 million class action suit, but that announcement was made during market hours on Friday and there was no news on the stock today. That said, perhaps today’s sell-off was a spill-over from Friday’s news.

Either way, transport stocks are a tough play in a weak economy. Horizon’s stock is down 58% in the past 52 weeks and the company’s debt load is more than quadruple its market cap. The Street will love that. Yeah, right.