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By Adam Feurstein
7:45 a.m. EDT
I listened to a replay of the
conference call, and the news is stunning. All of the data validating the company's genetic test for Down syndrome is now compromised and cannot be trusted, according to Sequenom. The company says the data was "mishandled" by four employees, who have been suspended pending an investigation. "Mishandling" appears to be antiseptic legal language for alleged data fraud.
Needless to say, this stock is radioactive. I don't think there's any reason to bottom-fish at this time; too many unanswered questions at this time. The big questions I have are this: Is Sequenom the gene-testing equivalent of
? Is Sequenom's genetic test nothing more than an illusion?
The repercussions of this news may spread beyond Sequenom if the two big hedge funds that took highly concentrated ownership stakes in the company blow up over this. Those funds are Ridgeback Capital and RA Capital.
2. First Solar -- Rising Margins and Solid Execution
By David Sterman
8:43 a.m. EDT
quarter played out according to plan, highlighted by another drop in manufacturing costs and another boost in margins that offset price pressures. But as I noted earlier this week, the morphing business model will likely alter the margin and ROIC profile. First Solar has also managed flawless execution on its capacity expansion, without any stumbles (even as many of its peers have seen teething pains).
Key items from the call: Manufacturing costs per watt fell another nickel to 93 cents; FSLR inked 479 megawatts of new deals in the quarter; regarding the all-important European market, only Germany has visibility, and even there, it's easier to get smaller projects done, as larger banks are still recapitalizing. That said, 90% of 2009 capacity is already sold out.
The issue of oversupply is not yet hitting home thanks to the cost differential, but a narrowing gap could pressure FSLR to lower prices (below current plans) even further later this year. That's why the 65 cent per watt target by 2012 is so important. At that cost, FSLR should handily maintain its pricing gap, especially if demand for silicon reverses course and prices of that raw material move up for rival solar vendors. Management said that "If we do what we've done in the past, we can continue to move down the path here, open new markets and potentially widen the gap relative to crystalline silicon type offerings."
Even if you don't chase momentum stocks, this one still has such a high ceiling, as the multiyear roadmap gets you to $10 in EPS in a few years, and perhaps $15 in EPS by 2012 or 2013.
3. GeoEye (GEOY) Up on Initiated Coverage from Canaccord Adams
By Eric Jackson
10:07 a.m. EDT
( GEOY), the satellite imagery company, is up 6% this morning on coverage initiated by Canaccord Adams. Now that its GeoEye-1 satellite is up and delivering images for its largest customer (the U.S. government), expect more analyst coverage like this to propel the stock in the coming months, as well as good financial results. We should start to hear more about better financials when the company reports its first-quarter results in the next few weeks.
4. DSW: Woulda, Coulda, Shoulda -- but Don't
By Scott Rothbort
11:00 a.m. EDT
I was taking some hard looks at
, the discount shoe retailer, in the last few days. I even engaged in thoughtful conversation with our
Stocks Under $10
guru, Frank Curzio. I just can't bring myself to chase the stock. It surged 7.7% on Tuesday, 4.8% on Wednesday and is now up about 6.0% today.
Too hot for me, but it just goes to show you what a short-squeeze panic looks like.
5. ExxonMobil's Miss Sends It Lower
By Gary Morrow
1:56 p.m. EDT
reported first-quarter EPS of 92 cents, missing consensus estimates by 3 cents. Revenue for the quarter fell over 40% year over year but were ahead of estimates. The stock responded well initially with a higher open on the bell but quickly turned lower, ignoring the marketwide surge during the first hour.
The stock is now off over 2.5% and well below yesterday's lows. This downside reversal action is attracting little selling pressure at this point, but I would not be surprised to see a bump in volume if ExxonMobil remains below $67.00 late in the day. The stock is still trading well above its monthly lows and has solid underlying support at $65.00, so it's a bit early to consider today's action the beginning of a breakdown.
Long XOM (in managed accounts).
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This article was written by a staff member of RealMoney.com.