Sign Up NowThis Month's Tiny Gems - August 2012

Cytokinetics, Inc. (CYTK)
Duma Energy Corp. (DUMA)
Longhai Steel, Inc. (LGHS)

 

 

 

Cytokinetics, Inc. (CYTK)

 

Cytokinetics, Inc. (CYTK) is a clinical-stage biopharmaceutical company focused on the discovery and development of novel small molecule therapeutics that modulate muscle function for the potential treatment of serious diseases and medical conditions. Cytokinetics' vision is to take advantage of their advanced drug discovery capabilities to exploit cytoskeletal pharmacology for the discovery, development, and commercialization of drugs with clinically novel mechanisms of action.

 

The company's lead drug candidate from their cardiac muscle contractility program, omecamtiv mecarbil, is in Phase II clinical development for the potential treatment of heart failure. Amgen, Inc. holds an exclusive license worldwide (excluding Japan) to develop and commercialize omecamtiv mecarbil and related compounds. This is subject to Cytokinetics' specified development and commercialization participation rights.

 

Cytokinetics is also independently developing CK-2017357, a skeletal muscle activator, as a potential treatment for diseases and conditions associated with aging, muscle wasting, or neuromuscular dysfunction. CK-2017357 is currently the subject of a Phase II clinical trials program. It has been granted orphan drug designation and fast track status by the U.S. Food and Drug Administration (FDA), and orphan medicinal product designation by the European Medicines Agency, for the potential treatment of amyotrophic lateral sclerosis (ALS), a debilitating disease of neuromuscular impairment in which CK-2017357 demonstrated potentially clinically relevant pharmacodynamic effects in Phase II trials.

 

The company is well accepted by institutional investors and mutual funds, which collectively hold 48% of the stock's float. Currently, six analysts offer coverage of the stock, all of which provide either a "Strong Buy" or "Buy" recommendation. The average price target is $3.70, a 400%-plus gain from today's market price, according to Yahoo Finance.

 

 

 

Duma Energy Corp. (DUMA)

 

Duma Energy Corp. (DUMA) is an aggressive growth company actively producing oil and gas in the domestic United States, both on and offshore. Leveraging its technical expertise, promising portfolio, and strong financial condition, the company plans to utilize domestic revenues and cash flow to fund its rapid growth through acquisition, while participating in transformational projects with the potential of providing exponential returns for shareholders.

 

The company's primary goal for fiscal year 2012 and beyond is to drive earnings growth. The company also aims to pursue listing on major exchange(s) to provide better visibility and liquidity to shareholders and financial partners. Already producing and generating revenue from oil and gas in Texas, Illinois, and Louisiana, Duma projects domestic production to exceed 1,000 barrels of oil equivalent per day (boepd) by the end of 2012; with 2,500 boepd projected by the end of 2013.

 

Duma was founded in 2005 and began trading on the OTCBB in 2009 via registration. In 2006, the company began producing from its first properties in Texas and soon after added production in Louisiana. In 2009, its new CEO Jeremy G. Driver came on board. Within one year, Mr. Driver had identified and negotiated an acquisition that would fundamentally reshape the company. This acquisition was made possible by the large direct cash investment by Mr. Driver and his family, as well as other investors.

 

The company uses only industry standard and time-tested technologies, and avoids unproven "resource plays" and other opportunities that are heavily dependent upon high commodity prices. Not bound by any geographical location or operational strategy, Duma's management team is focused on developing its existing portfolio while pursuing additional opportunities that provide rapid growth, leveraging growing revenue, cash flow, and reserves to accelerate its growth strategy.

 

 

 

Longhai Steel, Inc. (LGHS)

 

Longhai Steel, Inc. (LGHS) is a leading producer of high-quality steel wire in eastern China, with annual capacity of 1.5 million metric tons. Longhai's wire is manufactured into screws, nails, and wire mesh used for fencing and to reinforce concrete. Longhai recently expanded its production facility to include specialized applications such as steel wire rope, steel strand, steel belted radial tires, and steel welding rod. Longhai Steel is headquartered in Xingtai, Hebei province, the People's Republic of China.

 

The company's competitive advantages are its advanced production equipment and process technology, high product quality, expedited production, and close proximity to distributors and end users. Longhai Steel recently opened a second production line, which increases its overall capacity by 67% and expands its product portfolio into higher quality steel wire for specialized applications such as steel wire rope, steel strand, steel belted radial tires, and steel welding rod.

 

Longhai Steel's growth strategy includes capitalizing on government actions aimed at encouraging industry consolidation via the acquisition of neighboring producers at attractive valuations. The company also plans to grow organically through capacity expansion, broadening its product portfolio, improving operating efficiencies, and continued expansion of technical expertise.

 

China is the world's largest producer and consumer of steel and steel wires. Demand for steel products is primarily driven by spending in the construction, automotive, and infrastructure industries in China. Continued economic development in Hebei, one of the largest steel manufacturing regions in China, and neighboring provinces, and further buildout of tier 3-6 cities in China, provide tremendous medium and long term opportunities for Longhai Steel.