Market Monitor

In yesterday’s Guide we had a great round table discussion on the market and what the next steps should be. 

Yesterday’s FOMC meeting minutes were at best inconclusive about the Fed’s actions related to the stimulus.

The markets woes continue with the biggest three day sell off since 2011. 

The brutal winter looks like it is finally over. Spring fever is about to hit a majority of the nation which is just itching to get outside and play.

In Monday’s Goldman Guide we got on our soap box a bit to talk about our country, our freedoms, and what to do about it.  At the end of the day, we the people need to take a stand and not rely on the government for everything and get involved.  Complaining about it will change nothing. Good thing we have sports and stocks to buy in the sports world.

I am no psychologist but after informal conversations with a group of individual investors over the weekend, I am convinced that basketball’s annual March Madness can be hazardous to your wealth. 

In last week’s Goldman Guide we mentioned that the latest tech and biotech run in the small cap space is still a great short term trade.  Today our selection is a biotech up and comer that could do some serious moving in the next few months.

DARA BioSciences, Inc. (NASDAQ – DARA - $3.06) is a development stage bio-tech firm that is on the cutting edge of oncology treatment and supportive care pharmaceutical products. 

As we mentioned in yesterday’s Goldman Guide, the tech M&A activity should continue over the next few months and the right stock pick could bring the trader a nice pop. RadiSys Corporation (NASDAQ – RSYS - $4.33) is an up and comer that provides wireless infrastructure solutions for the telecom, aerospace, and defense markets in North America, Europe, the Middle East, and Africa. 

The Company offers advanced telecommunications computing architecture product family that includes a suite of integrated, application ready, and software-rich hardware products, such as carrier blades, chassis, disk modules, line cards, and processing and switch modules for computing/switching, deep packet inspection, digital signal processing, and platform software applications.  It also provides media resource function products comprising multimedia processing platforms for audio and video conferencing, voice over long-term evolution, voice over IP, video over IP, OEM, and enterprise customers, as well as IP multimedia subsystem telecommunication service providers and solution developers.  In addition, the Company offers Computer-on-Module Express products, which are designed for applications that require a standard processor and memory subsystem, and modular flexibility to retain key design-level IP on a separate carrier board; and rack mount servers primarily for medical imaging and diagnostic, test and measurement, and aerospace and defense submarkets.  Further, it provides Trillium software that enables the communication for telecommunications networks, including mobile and fixed line networks. Additionally, the Company offers end-to-end infrastructure solutions to manage and control the data flow within existing and next-generation wireless communications networks, as well as to provide voice, video, and image manipulation capabilities for network providers.

The Company has some awesome deal space in the 3G and 4G space.  Last week RadiSys announced that BTI Wireless, the leader in TD-FEMTO end-to-end solutions providing 3G and 4G Smallcell and Gateway System products, selected Radisys’ Trillium® software for deployment of an advanced LTE-TDD (Long-Term Evolution Time-Division Duplex) solution for China Mobile.  Additionally, the Company announced a deal with Octasic, Inc., a leading provider of devices and technology platforms for wireless base stations and media processing.  RadiSys will provide the integration of Radisys' Trillium® small cell software with its new OCTBTS platforms, including the OCTBTS 3000 -- the smallest full-mobility base station in the world.  Octasic's platforms leverage RadiSys' Femtotality 3G small cell software today, with plans to integrate its LTE TOTALeNodeB™ small cell software.

RadiSys continues to expand its product lines, win awards, and land new deals.  On the micro level RSYS is very bullish in the short, intermediate, and long term Daily Moving Average.  Additionally, the basic valuation puts the forward P/E at just under 13 as the firm is expected to begin operating in the black this year.  Look for a nice rise to the $5.50 level by early 3Q14.

Have a great day!

Disclosure: Goldman Small Cap Research analysts are neither long nor short these shares but may elect to purchase the stock within the next 48 hours.

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In Monday’s Goldman Guide we mentioned that auto, oil, and healthcare stocks might be movers in this market.  Our biotech stock pick TherapeuticsMD (NYSE – TXLD) has had a nice start up over 4% already since Tuesday.

Let us shift gears, pardon the pun, to the automotive industry.  Tesla Motors (NASDAQ – TSLA - $253.00) is leading the charge this year as an automotive and technology play up nearly 70% YTD.  Automotive and related industries remain strong both in consumer sales and in the market for the most part. We would like to think that Quantum Fuel Systems Technologies Worldwide, Inc. (NASDAQ – QTWW - $8.30) presents the opportunity for investors to get in on the next TSLA at the Tier I automotive supplier level. 

In yesterday’s Goldman Guide we indicated that there were several indications of a slowdown in the market and that investment bankers will turn to an opportunistic mindset as the bull market loses steam.  One sector that is always available for opportunity for investors is small cap biotech.  Factor in the short term benefit that Obamacare may have for related medical stocks, and the right pick could be a big winner in 2014. TherapeuticsMD, Inc. (NYSE – TXMD - $6.20) fits the bill for a great opportunity.