It’s the weekend, and that brings about the review of “the unusual suspects” for strange activity or for being key stocks under review for the week ahead.  There are some old hat names here and some new unknown names that will be key.  We have Electro-Optical Sciences, Inc. (NASDAQ: MELA), First Solar, Inc. (NASDAQ: FSLR), Genzyme Corp. (NASDAQ: GENZ), Geron Corp. (NASDAQ: GERN), Jacobs Engineering Group, Inc. (NYSE: JEC), Sears Holdings Corporation (NASDAQ: SHLD), SIRIUS XM Radio Inc. (NASDAQ: SIRI), Salesforce.com (NYSE: CRM), and Spectrum Pharmaceuticals, Inc. (NASDAQ: SPPI) all under review for the week ahead.

Electro-Optical Sciences, Inc. (NASDAQ: MELA) was given a 50% upside call by Barron’s as one company which could revolutionize the screening of skin cancer.  Its MelaFind is under FDA review…. Our own take is that this will pop big Monday morning, but we would point out that the company is projected to lose money this year and next and the revenue expectations are tiny even for a $159 million market cap in 2010.  Our take is that the reality versus the hype won’t be known for some time, and it should get close to a 52-week high.

First Solar, Inc. (NASDAQ: FSLR) is another unusual suspect to watch this week.  The downgrade from Jefferies on Friday made this the worst performer of all in the sector and only added insult to injury from the prior week’s slam by Barron’s.  Solar and wind companies are increasing lobbying efforts in hopes of capturing up to $10 billion more in subsidies, but the charts do not trust the outcome.  First Solar has a totally broken chart now as it is down 40% from highs in May and has now actually traded under the lows right before that gap-down in late February when the market was making its meltdown.

Genzyme Corp. (NASDAQ: GENZ) is going to be one to watch this coming week.  This has recovered off of lows in recent sessions and Leerink Swann just raised its rating on Friday to an “Outperform” on its valuation versus prospects ahead after 2009.  This one also made our BioHealthInvestor.com stock screen review of biotech stocks with unusually low P/E ratios and other cheap valuation metrics (others noted are AMGN, AOB, BIIB, CEPH, CBST, and PDLI).  Genzyme gave its highest close on Friday since July 30, making it a chart watcher stock as well.

Geron Corp. (NASDAQ: GERN) will be one to watch this coming after its bad news this last week about an FDA clinical hold on its spinal cord injury testing. This put a hex on the sector, but there was something interesting. This lost 10% on Tuesday’s news, but despite the gap-up on Wednesday not holding, this never did break back under the $6.49 closing price of Tuesday.  It only hit it and closed at $6.52.  That is hardly an endorsement, but as this is the leader in the speculative stem cell stock group it will be a key one to watch this next week.

Jacobs Engineering Group, Inc. (NYSE: JEC) represented a chart break-out.  But as Joe Kunkle of OptionsHawk.com told us, there was unusual options trading in this and it has in the past been considered a possible buyout target.  The OCT$50 CALLS were noted as active as lots of 1,000 and 1,500 traded but the contracts ended up trading 3,990 contracts versus an open interest of 1,617 contracts. There was also unusual activity in the AUG$45 CALLS but that was likely a close-out trade as the August series expired yesterday.

Sears Holdings Corporation (NASDAQ: SHLD) was given insult on top of injury.  The earnings report, a loss of $94 million, was worse than expected but also came after the deadline that Wall Street and common investors are demanding to see proof of the turnaround.  It isn’t there and patience may be running thin with Eddie Lampert and his promises.  While it added over 1% on Friday to close at $66.02, this one lost 11.8% of its value on Thursday after its earnings and was the worst retailer of the lot.  Now Barron’s gave it the cover story as “Washed Out”… with an inability to keep cutting costs, lower margins. lower market share, lower profitability, and lower cash flow ahead.

SIRIUS XM Radio Inc. (Nasdaq: SIRI) will be one to watch this coming week.  There is supposed to be a new hardware release this coming week and the talk is that this is a SkyDock plug-in device for helping iPods and iPhones become satellite-radio receivers.  The company also was a likely huge winner in the cash for clunkers program.  SIRIUS traded up every day this last week except Monday and volume grew every single day.  It closed at $0.54 Monday and ended the week at $0.70, a gain of almost 30%.  Not bad at all.

Salesforce.com (NYSE: CRM) took the chart and news award as a “best of” this last week.  The closed up significantly higher on Friday and at levels not seen since last September.  There could be some “back-and-fill” trading initially, but after Salesforce.com forgot about the recession by beating earnings and raising guidance it could run more than 10% more from Friday’s close before hitting 52-week highs.

Spectrum Pharmaceuticals, Inc. (NASDAQ: SPPI) is going to have its last full trading week before everyone starts to opine about an upcoming FDA decision for its ZEVALIN, its non-Hodgkin’s lymphoma radio-immunotherapeutic, is due.  This will be a make or break event.  We have some solid background data on what happened here that brought up this as an unexpected issue, and BioMedReports.com has an outlook on the issue coming up.

MACRO-EVENTS FOR THE WEEK AHEAD:

Earnings season is effectively ending after this last week.  We still have many retail earnings releases coming due this week, but the major tech and industrials and the larger index components have just about all reported earnings by now.

On economic numbers, we have Durable Goods and Consumer Confidence both due Tuesday morning, New Home Sales for August on Wednesday, and the first revision to Q2 GDP out on Thursday.

If you want weekly reminders in case you miss “the unusual suspects” or if you want updates on guru investors like Buffett or Icahn or Soros, or if you like data on IPO’s, secondary, offerings, key analyst calls, and merger activity… feel free to join our open email distribution list that goes out several times per week.

JON C. OGG
August 22, 2009

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