The Mission Report

The MissionIR Report - November 2012

In-depth analysis, timely updates, latest market news


Market News

Company Updates


Economic Signs Point to a Good Holiday Season

This past week saw a string of economic data that all pointed to modest signs of strength among consumers. Foremost among the numbers was the Consumer Confidence Index, which rose to 72.2 in October from 68.4 in September. This was the best reading in the index since February 2008. The improvement in the index was led by the gain in consumers' assessment of the jobs market, which rose to minus 29.1 - the highest reading since November 2008.

In addition, data from the big box retailers confirms the improved sentiment among consumers. Same-store sales (excluding Walmart) rose 4.7% in October, above most estimates. Economist Chris Christopher of his Global Insight in a note to the firm's clients stated "It [retail sales] serves as a positive signal that the holiday retail sales season is looking significantly brighter." His firm expects holiday retail sales to rise 4.5% above last year's figures.

The gain in retail sales seemed to be fairly widespread. Among the larger retailers reporting better-than-expected sales for October were Macy's, Nordstrom, Kohl's, and TJX. These companies' sales increases versus estimates were impressive: 4.1% vs. 3.1%, 9.8% vs. 6%, 3.3% vs. 1.1%, and 7% vs. 4.3%, respectively.

Most retailers remain optimistic too, despite the wide ranging effects of Hurricane Sandy. Brian Sozzi, chief equity analyst at NBG Productions, said he believes Sandy is being viewed by most retailers as an "interruption" in a sales trend that has been running above consensus and internal company plans year-to-date.

Three ETFs to Watch in Hurricane Sandy's Aftermath

Although it is still hard to say just how long lasting the impact from Hurricane Sandy will be, the storm has met expectations so far. The major weather event has knocked out power to millions across the broad Mid-Atlantic and Northeast regions of the U.S., potentially costing the area billions in economic activity, not just during the storm, but possibly for a longer period.

Beyond the damage, power outages, and the potential loss of life, the so-called “Frankenstorm” has also impacted stock markets in a very important way. The storm has knocked out stock trading for two days in a row, marking the first time in more than a century that weather has been the cause for a two day trading suspension of the New York markets.

Although a number of key financial products are being watched closely, there are undeniably some sectors of the broader economy that look to be especially impacted by the massive storm.


With Hurricane Sandy impacting some of the most valuable and densely packed real estate of the United States, insurers could be in for a rough time this quarter. Damage is expected to reach well into the billions and looks to hit a number of insurance companies in the process.

Due to this, a host of insurance ETFs could be in for some down days. While KBWP looks to be the most directly impacted ETF by this storm, the iShares Dow Jones US Insurance ETF (IAK) looks to be a more popular ETF play on the situation.

This fund has about $70 million in AUM and sees volume of roughly 17,000 shares a day, making it extremely more popular than KBWP. The product also holds about 60 securities in its basket, giving it wide exposure to the firms in the Dow Jones US Select Insurance Index.


Assuming that the storm does a great deal of damage, firms in the construction sector could benefit from the cleanup afterwards. "This will show up in increased spending at hardware and home stores," Diane Swonk, chief economist at Mesirow Financial wrote in a recent note. "There should also be an increase in spending, once damages from the storm are assessed and repairs get underway. That spending could borrow a bit from traditional holiday sales, depending on how much insurance is paid on those claims."

Given this trend, construction-based firms could continue their solid run heading into the ending part of the year, adding to their non-storm related gains from earlier in 2012. While there are a number of ETFs to play this scenario, one that stands out is the iShares Dow Jones Home Construction Index Fund (ITB).

Mid caps and small caps dominate this product, while home builders account for roughly two-thirds of exposure in this popular fund. Not only has this ETF been a top performer so far in 2012, but the product has a Zacks ETF Rank of 1 or Strong Buy, suggesting that there could be more strength in this product even without the storm acting as a tailwind.


Much of the storm is centered on Philadelphia and the broader metro region around this important city. While many Americans probably know that Philly was vital to the country’s founding, they might not know that it is today a major center of gasoline production.

Ports that service tankers have been shut across the Northeast while major refineries in the region are also closing down or operating at reduced levels. Given that other pipelines and various other gasoline related businesses are poised to shut down or see reduced output thanks to the storm, we could see a huge short-term reduction in gasoline for this key region of the nation.

While it is true current demand is probably reduced to a lack of economic activity right now, the real test will be when the storm passes. If the damage is severe and there is a struggle to bring back production, gasoline could have some legs as we approach November.

An easy way to play this trend is with the United States Gasoline Fund (UGA). This product tracks RBOB futures and charges investors just 60 basis points in fees.

US Home Prices Rise
at Faster Pace

Home prices have been rising in nearly all U.S. cities, and many of the markets hit hardest during the crisis are starting to show sustained gains. The increases are the latest evidence of a steady housing recovery.

The Standard & Poor's/Case Shiller index reported Tuesday that national home prices increased 2 percent in August compared with the same month a year ago. That's the third straight increase and a faster pace than in July.

The report also said that prices rose in August from July in 19 of the 20 cities tracked by the index. Prices had risen in all 20 cities in the previous three months.

Cities that had suffered some of the worst price declines during the housing crisis are starting to come back. Prices in Las Vegas rose 0.9 percent, the first year-over-year gain since January 2007. Prices in Phoenix are 18.8 percent higher in August than a year ago. Home values in Tampa and Miami have also posted solid increases over the period.

Seattle was the only city to report a monthly decline. Still, prices there fell just 0.1 percent in August from July and are 3.4 percent higher than a year ago.

"The sustained good news in home prices over the past five months makes us optimistic for continued in the housing market," David Blitzer, chairman of the Case-Shiller index, said.

The steady increase in prices, along with the lowest mortgage rates in decades, has helped many home markets slowly rebound nearly six years after the housing bubble burst.

Rising home prices encourage more people to put their homes on the market. They may also entice would-be buyers to purchase homes before prices rise further.

The S&P/Case-Shiller index covers roughly half of U.S. homes. It measures prices compared with those in January 2000 and creates a three-month moving average. The August figures are the latest available.

The figures aren't seasonally adjusted, so some of the gains in August reflect the benefit of the summer buying season.

Stan Humphries, chief economist at the housing website Zillow, expects the monthly price figures will decline in the fall and winter.

"This doesn't mean the housing recovery has been derailed," he said. "This is exactly what bouncing along bottom looks like."

Other recent reports show that the housing market is improving, albeit from depressed levels.

Home builders started construction on new homes and apartments at the fastest pace in more than four years last month. They also requested the most building permits in four years, a sign that many are confident that home sales gains will continue. Home building is still far below the pace that economists say is consistent with a healthy housing market.

New home sales jumped last month to the highest annual pace in the past two and a half years.

Sales of previously-occupied homes dipped in September but have risen steadily in the past year.

Cardium Therapeutics, Inc. (CXM)

In recent news, Cardium Therapeutics announced that its MedPodium® business has acquired the assets, business, and product portfolio of privately held To Go Brands® to support the expansion of its health sciences nutraceutical brand platform. Following the introduction of its products in a number of food, drug, and mass channel retailers, To Go Brands recorded revenues of approximately $1.7 million for the first half of this year.

San Diego-based To Go Brands’ portfolio includes over 25 products that help support healthy lifestyles. The company’s antioxidant-rich drink mixes are available in convenient stick packs that are designed to pour directly into a water bottle. To Go Brands also offers chews and mix packages for home use, as well as capsule-based dietary supplements, including Trim Energy Green Coffee Bean™, which supports healthy weight loss. These products are sold through food, drug, and mass channels at Whole Foods®, CVS®, Kroger®, GNC®, Jewel-Osco®, Ralph’s Supermarkets®, Meijr®, and the Vitamin Shoppe®, in addition to the company’s web-based store.

About Cardium Therapeutics, Inc. (CXM)

Cardium Therapeutics, Inc. is a health sciences and regenerative medicine company focused on acquiring and strategically developing new and innovative products and businesses to address significant unmet medical needs. Comprised of large-market opportunities with definable pathways to commercialization, partnering, and other economic monetizations, Cardium's current portfolio includes the Tissue Repair Company, Cardium Biologics, and the company's in-house MedPodium Health Sciences healthy lifestyle product platform.

The company's lead commercial product Excellagen® topical gel for wound care management recently received FDA clearance for marketing and sale in the United States. In addition to plans to advance the product's commercialization in the U.S. and internationally via strategic partnerships, the company plans to develop new product extensions for additional wound healing applications and is working towards securing approval for marketing and sale in South Korea and through the CE Mark application process in the European Union.

Generx®, Cardium's lead clinical development product candidate, is a DNA-based angiogenic biologic designed to treat patients with myocardial ischemia due to coronary artery disease. Cardium recently initiated its Generx Phase 3 / registration study in Russia. Consistent with its capital-efficient business model.

Cardium is also actively evaluating new technologies and business opportunities. The company utilizes its team's skills in late-stage product development to bridge the critical gap between promising new technologies and product opportunities that are ready for commercialization. Cardium is dedicated to building on its core products and product candidates to continually create new opportunities for greater success. Leveraging the advantages of its capital-efficient, asset-based business strategy, the company provides a diversified and more balanced portfolio of risk/return opportunities with the chief objective of providing long-term shareholder value.

GlobalWise Investments, Inc. (GWIV)

GlobalWise Investments announced that its wholly owned subsidiary Intellinetics will be sponsoring and participating in two conferences hosted by the national managed print industry leading publication The Imaging Channel ( Intellinetics is a leading-edge technology company focused on the design, implementation, and management of cloud-based Enterprise Content Management (“ECM”) systems in both the public and private sectors.

Both conferences are free events co-sponsored exclusively by Intellinetics and their recently announced channel partner MWA Intelligence, Inc. (MWAi). MWAi is one of the largest IT infrastructure providers for copier dealer Managed Print Service companies in the United States. MWAi CEO Mike Stramaglio chose GlobalWise to participate in the conference as the only ECM provider in attendance. Participants at the two conferences will learn new and exciting ways Content Management applications can reduce operating costs, increase productivity, and streamline processes for greater efficiency.

About GlobalWise Investments, Inc. (GWIV)

GlobalWise Investments, Inc., via wholly-owned subsidiary Intellinetics, Inc., is a leading-edge technology company focused on Enterprise Content Management (ECM) solutions for the digital age. The ECM industry continues to grow rapidly as a result of unrestricted proliferation of digital content within today's business environment. Leveraging its proprietary cloud-based computing software, GlobalWise is poised to capture a significant market share of this burgeoning industry.

GlobalWise's ECM service is delivered to customers via five unique delivery models which cover the spectrum of business needs: Cloud/Saas (Software as a Service), Hardware Vendor Integrated Service, Software Vendor Integrated Service, Premise (Client-Server), Hybrid (Premise & Cloud/Saas).This diversity gives advanced security & privacy features with an on-demand structure needed for large Tier 3 and Tier 4 businesses that are currently underserved by the market.

The Intellinetics platform defines a new industry benchmark and game-changing approach by combining advanced virtualization & automated content management with an open and service-oriented architecture using web services. The company provides strategies, tactics, and technologies used to manage paper and digital assets from capture to long-term archive, without the need for manual processes conducted by a full time employee.

GlobalWise's management boasts a combined total of over 150 years in ECM leadership and industry experience. The ECM industry is expected to exceed $5.1 billion by 2013 with Gartner predicting a compound annual growth rate of 9.5%. IBM Market Insights predicts adoption of cloud computing to grow by 26% CAGR between 2010 through 2013. Leveraging management and key department heads, Intellinetics has a strong foundation from which to capture significant market share within the lucrative $149 billion Business Software & Services industry.

VistaGen Therapeutics, Inc.

VistaGen Therapeutics reported the completion of the previously announced $3.25 million financing commitment with Platinum Long Term Growth VII, LLC (Platinum) and approximately $3.0 million strategic debt restructuring. The combined transactions involve the company’s three largest institutional shareholders and its patent counsel.

“Today marks a significant turning point for VistaGen. These transactions represent a tremendous vote of confidence by four of our major stakeholders and position us to realize the full measure of our commercial opportunities involving our stem cell technology platform and AV-101 clinical program,” stated Shawn K. Singh, VistaGen’s Chief Executive Officer.

About VistaGen Therapeutics, Inc. (VSTA)

VistaGen Therapeutics is a biotechnology company applying stem cell technology for drug rescue and cell therapy. Drug rescue combines human stem cell technology with modern medicinal chemistry to generate new chemical variants ("drug rescue variants") of once-promising drug candidates that have been discontinued during late-stage preclinical development due to heart or liver safety concerns. VistaGen also focuses on cell therapy, or regenerative medicine, which includes repairing, replacing or restoring damaged tissues or organs.

VistaGen's versatile stem cell technology platform, Human Clinical Trials in a Test Tube™, has been developed to provide clinically relevant predictions of potential heart and liver toxicity of promising new drug candidates long before they are ever tested on humans.

By more closely approximating human biology than conventional animal studies and other nonclinical techniques and technologies currently used in drug development, VistaGen's human stem cell-based bioassay systems can improve the predictability of the drug development cycle and lower the cost of new drug research and development by identifying product failures earlier in the cost curve. According to the Food and Drug Administration even only a ten percent improvement in predicting failure before clinical trials could save $100 million in development costs, which savings ultimately could be passed on to patients.

Using mature human heart cells produced from stem cells, VistaGen has developed and internally validated CardioSafe 3D™, a novel three-dimensional (3D) bioassay system for predicting the in vivo cardiac effects of new drug candidates before they are tested in humans. VistaGen is now focused on using CardioSafe 3D™ to generate up to two new, safer small molecule drug rescue variants every twelve to eighteen months. VistaGen anticipates that these drug rescue variants will be modified versions of once-promising new drug candidates that have been discontinued by pharmaceutical companies and academic research institutions because of heart toxicity concerns, despite substantial prior investment and positive efficacy data demonstrating their potential therapeutic and commercial benefits.


For more frequent updates, follow us on Twitter!

Home     About Us     IR Services     Investors     Partners     Market Research     Blog     Contact     Disclaimer

© 2012 Mission Investor Relations. All rights reserved.
3645 Marketplace Blvd.   Suite 130-280   Atlanta, GA 30344   404-941-8975