Zacks Bull and Bear of the Day Highlights: WisdomTree Investments, Joseph A. Bank, Auxilium Pharmaceuticals, Actavis and GlaxoSmithKline
Zacks Equity Research
For Immediate Release
Chicago, IL – February 1, 2013 – Zacks Equity Research highlights WisdomTree Investments (WETF) as the Bull of the Day and Joseph A. Bank (JOSB) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Auxilium Pharmaceuticals, Inc. (AUXL), Actavis, Inc. (ACT) and GlaxoSmithKline (GSK).
Exchange-Traded Fund (ETF) assets have been surging lately as more investors embrace this product type for their portfolios. While the space continues to be dominated by iShares, PowerShares, and State Street, there have been several smaller companies which have begun to make inroads in the market, such as upstart WisdomTree Investments (WETF).
This New York-based company has over $20 billion in assets under management in its lineup of funds which stretch across asset classes into equities, bonds, and currencies. However, it should be noted that the firm does things a little differently when compared to other ETF providers in both its funds’ makeup and their focus.
Instead of weighting stocks by market capitalization, the firm often utilizes a dividend or earnings weighting methodology for its products, something that is virtually unseen in other corners of the fund world. This unique approach appears to be paying off for this small company, as both assets under management and the firm’s overall earnings have been soaring.
In fact, just one year ago, the company earned just one cent per share and it is expected to earn four this quarter. The full year picture is also rosy, with the year ago figures showing EPS of two cents a share compared to projections of eight cents a share this year.
In the world of men’s clothing, Joseph A. Bank (JOSB) has become extremely well-known thanks to its aggressive marketing and rock-bottom deals. However, the company’s strategy may not be paying off on the earnings front, leaving many investors gloomy over the firm’s prospects.
In fact, JOSB recently reported earnings that missed analyst expectations by a pretty wide margin. The firm saw EPS of just 47 cents a share, 14.55% below the consensus estimate of 55 cents a share.
Thanks to this miss and some gloomy profit predictions for the next quarter and year, many are starting to wonder if the company’s discount-centric model can keep bringing in profits over the long haul. It also appears as though consumers are tiring of the firm’s tactics and that big sales are not driving revenue like they once did for JOSB.
Auxilium Pharmaceuticals, Inc. (AUXL) recently announced the initiation of a patent infringement lawsuit against Upsher-Smith Laboratories, Inc. which is looking to launch its generic version of Testim, 1% testosterone gel. Upsher-Smith has challenged ten patents that are listed in the Orange Book and which are slated to expire between Apr 21, 2023 and Jan 18, 2025.
The filing of the patent infringement lawsuit within 45 days from the date of receipt of notice from Upsher-Smith is in line with our expectations. This will ensure that the FDA cannot grant final approval to Upsher-Smith’s generic for up to 30 months (Jun 24, 2015) or the court’s decision, whichever is earlier.
We note that Auxilium Pharma is already facing a patent challenge for Testim. In Apr 2012, Actavis, Inc. (ACT) had challenged Testim’s patents. Auxilium Pharma has filed a patent infringement lawsuit against Actavis.
Testim, the lead product at Auxilium Pharma is approved for the treatment of hypogonadism or low testosterone level. Testim sales came in at $55.4 million in the third quarter of 2012, accounting for 78% of the company’s revenues. The entry of a generic version would be a major blow for the company.
Auxilium Pharma is currently working on boosting Testim sales. The company has a co-promotion agreement with GlaxoSmithKline (GSK) for Testim. With urology being a key focus area at Glaxo, Testim sales should benefit from the additional promotional effort. Moreover, it has been seen that testosterone replacement therapies (TRTs) are sensitive to promotional efforts. Glaxo’s sales force started promoting Testim from Jul 2012.
Auxilium Pharma currently carries a Zacks #3 Rank (Hold).
Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.
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