October 2, 2013
Upcoming Q4 Events Bode Well for Nuvilex Shareholders
The fourth quarter of the year is typically a good one for micro cap stocks due to seasonal and macro issues and this year should be no different. For Nuvilex, Inc. (OTCQB – NVLX - $0.12 – Spec Buy) shareholders, the last 3 months of the year should be extra sweet. From the macro perspective, micro cap stocks tend to generate their greatest stock performances in the latter part of the year and the ensuing start of the next year. That is especially the case with many small biotechs as they outline goals and objectives for the coming year. However there are two additional factors which may drive the industry segment to an even higher than normal level.
At present, the Russell 2000 Index is heavily weighted in the financial services, consumer discretionary, and technology industries, while health care is only the 5th greatest weight. This is interesting considering 4 of the top 10 performers of the index are health care stocks and 2 of the top 10 holdings are in health care. This dichotomy indicates to investors that there is no broad ownership in health care or biotech at this time and that the current positions may have a fairly meaningful concentration.
Given that just yesterday S&P Capital downgraded the financial services sector weighting and the seasonality of consumer discretionary stocks declines in the early part of the year, we expect a major shift in industry weighting during Q4. As a result, investors should prepare for a sector rotation to the health care and specifically the biotech arena, this quarter. Separately, one of the most opportunistic of the major oncology-focused biotechs, Celgene Corp. (NASDAQ – CELG) just made a $10M investment in Acceleron Pharma (NASDAQ – XLRN), a cancer treatment developer. This latest move is one in a recent series made by big pharma into smaller firms and Nuvilex likely remains on the list of qualifying candidates going forward.
On the micro front, Nuvilex investors may also be rewarded by upcoming milestones such as the pending closing of the diabetes technology treatment rights acquisition which was originally announced in 3Q13. This deal should immediately boost the Firm’s valuation, upon closing. Plus, investors can expect to receive progress reports regarding the Firm’s advanced clinical trials initiatives such as the production of the live cancer-drug-activating cells that will form part of the treatment to be used in its pancreatic cancer studies and the GMP facility in which the actual encapsulation of those cells will take place.
All in all, with seasonality, sector rotation, and key milestone news ahead, Nuvilex’s stock appears to have the wind at its back, which is good news for shareholders.
For more information, refer to our previous sponsored PLPL Reports, Updates and Hot Topics by visiting www.GoldmanResearch.com
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Senior Analyst: Robert Goldman
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