Palm, Zanett: Week's Big Volume Movers
The major sticking point in Wednesday's release was Star Scientific's warning that the results of preliminary testing do not necessarily translate to human testing, and additional work needs to be completed to determine whether the compound will have significant B-amyloid lowering effects in humans. By the end of the session, the stock had lost more than 16%.
Worry over the compound's effect in humans didn't stop one writer on Seeking Alpha from assigning Star Scientific with a price target of $15 to $20. The article, which hypothesized that Star Scientific's compound is not a drug but instead a "nutraceutical" that can be easily tested in humans, was cited as the catalyst for the 13% jump in shares on Thursday.
Some wary traders posting on Twitter called the $15 to $20 price target range for Star Scientific "wild." Several Internet posts made note that the author of the Seeking Alpha article held a long position in Star Scientific. Others noted that Star Scientific, which traded under the ticker symbol STSI until late 2009, has been unprofitable quarter after quarter.
With all the talk of finding a cure for Alzheimer's, heavy insider buying went almost unnoticed by traders. Regulatory filings on Wednesday showed that several Star Scientific insiders bought up large amounts of stock at $2.72 a share, which gave believers in the company another reason for optimism.-- Written by Robert Holmes in Boston. Check out all of the week's high-volume, under-$5 stocks at the Dollar Store. View the Dollar Store portfolio on StockPickr. Follow Robert Holmes on Twitter and become a fan of TheStreet.com on Facebook.
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