Cytori's Celution to the Aging Face--Make it New Again

A picture is worth 1,000 words:

The face of a 55 year old office manager before a stem cell enhanced face lift performed by Dr. Aamer Khan in the UK:

Three months later:

Just one application in a platform of potential therapies that could make Cytori Therapeutics the story stock of the next decade. You can see the entire story here. Do your own due diligence.

China Green Agriculture: A Green Growth Story

Those who had the opportunity to see any part of the 2008 Beijing Olympics, observed the sophistication of the world's most populous country. A country with a long and great culture and currently with the fastest growing economy in the world.

Along with this rapid growth has come numerous environmental issues, as evidenced for example, by the terrible smog problem in Beijing. Fortunately, as living standards have improved, China's leaders are now beginning to get serious about environmental sustainability. One of environmental issue makes China Green Agriculture (CGA, $15.00) a compelling story, in my opinion, is the overuse of chemical fertilizers that is has prolonged long term negative implications on soil quality and sustainability. As a result, the obvious concerns of China's ability to feed its population puts CGA in an enviable position.

CGA develops, manufactures and distributes humic acid liquid compound fertilizers in 21 provinces, 4 autonomous regions and 3 municipal cities in China. Humic acid is an essential natural and organic material needed for well balanced fertile soil. CGA gets all its humic acid from from weathered coal, a cheap and abundant material in China. The primary value of CGA's franchise lies primarily in its significant research and development program. CGA's research program is unique in that is self financed. CGA tests and formulates its compounds in intelligent greenhouses and actually sells the produce it grows during the process to finance its R&D costs. CGA has a healthy balance sheet with no long term debt, very healthy margins and sells at a forward P/E of only 10.

CGA's recent shelf offering, that raised $24.5 million to finance its expansion plans, have put pressure on its share price making for a very attractive entry point, in my opinion. At these levels (around $15), the market is overlooking the very favorable news that China Green Agriculture released on November 18, 2009 that will be a catalyst for earnings improvement on top of its growth potential. The Chinese government gave CGA a 5 year exemption from a 13% value added tax due to the organic nature of its product. This tax relief goes right to the bottom line in the form of a 3-5% margin improvement, according to Mr. Tao Li, Chairman and CEO. The benefits of this exemption seem to have been overtaken by the usual concerns of dilution following to the company's recent private placement. This represents an opportunity, IMHO.

China Green Agriculture has extensive resources on its website for those interested in doing their own due diligence. Here are a couple of links I found useful:

CGA Fact Sheet
CGA Investor Presentation

I've been purchasing CGA this morning at these levels but I urge all those considering an investment to do their own due diligence.

Cytori Poster Presentations from San Antonio Conference Now Available

Here are the links to the Posters that were presented at the San Antonio Breast Cancer Symposium on Saturday December 12th by Cytori Therapeutics:

Restore II - Stem Cell Breast Reconstruction

Adipose Derived Regenerative Cells - Pre-Clinical Growth Factor

The internet certainly makes performing your own due diligence rather easy, doesn't it?

Cytori's Restore II 6 Month Clinical Data Very Encoraging

Today, Cytori Therapeutics released the 6 month interim Clinical Phase II results of one of the many potential applications of its Celution technology that extracts stem and regenerative cells from a patient's own fat tissue (adipose). The Restore II trial was related to the treatment of cell enriched breast reconstruction and was presented at the San Antonio Breast Cancer Symposium. The results where very promising and showed a high level of patient satisfaction. No need for me to interpret the results when you can read the press release here. The clinical data is presented in a video interview and is a must see if you really want to get a better understanding of the clinical results. Cytori also issued a complementary second press release today that that supported the safety of cell enriched fat grafting.

Followers of the Sirtuin Investor know that Cytori Therapeutics was first featured here on September 9, 2009 when CYTX was selling about $3.20 per share. Although I had been following the company for a couple of years it seemed to me that this was the time when the risk/reward characteristics of CYTX, as an investment, looked the most promising. In the September 9th entry, the investment case that was laid out for Cytori was not one based upon a single therapy for a single ailment but on a platform of therapies where doctors around the world could potentially treat multiple ailments and improve upon many cosmetic procedures. To keep thinks in perspective this is just one of those therapies. I urge all those that are new to Cytori go back to that entry as part of their due diligence process to get the bigger picture.

Things continue to look promising for Cytori Therapeutics.

Apollo Commercial Real Estate Finance? If not now...When?

Ever since the onset of the financial crisis, it has been in the back of my mind that there will come a time when it will make sense to put some money in commercial real estate finance in order to earn a healthy current yield with the potential for long term appreciation. As anybody who has access to any business channel knows, the commercial real estate market reached a tremendous bubble a couple of years ago that continues to burst. The ability to refinance these properties is extremely difficult at this time and this represents an opportunity in my opinion. With short term interest rates at near 0% and long term bond rates at levels too low to compensate for the risk of rising interest rates, I believe that now may be the time to take the plunge into the secured commercial real estate market.

The vehicle I have chosen to use to make this investment is Apollo Commercial Real Estate Finance (ARI $17.60), a REIT that IPO'd at $20 on 9/23/09 . I've built up a position in the $17.25-$17.50 range. Why did I chose this vehicle to gain exposure? There are a few reasons:

1. Apollo is a large well respected money manager with seasoned professionals that will invest in senior secured commercial real estate loans, etc.
2. ARI currently trades at a healthy discount to net asset value. ARI IPO'd at $20 per share. Knock off $.50 to pay the underwriters and essentially what you have here is $19.50 in cold hard cash that can be purchased for below $18 per share. Nice discount that effectively boosts your yield to above the actual yield of the portfolio once it is constructed.
3. Since this is an IPO, there is no concern as to the valuation of assets already on the balance sheet. No concerns about buying mismarked assets.
4. When I listened to the road show a few months ago, I recall the expected yield of the portfolio of commercial mortgages and CMBS investments was expected to be in excess of 12%. Not bad for a secured medium term investment as commercial real estate loans typically have 5 year effective terms.

In my opinion, now is the time to take the plunge although this is not an investment that one should expect a quick pop. . Since there has been no information released by the company, to date, and the dividend yield is still unknown the NAV has drifted to a substantial discount that will not likely last long. Read the IPO and do your own DD. Conference call at 11:20 AM today (sorry for the short notice) might get the shares moving.

Quadramed - Gets $8.50 Cash Buyout Offer

Today, Quadramed (QDHC) became the second stock profiled by the Sirtuin Investor to receive an all cash buyout offer. While it wasn't at the 100% premium that Sirtris Pharmacueticals obtained from Glaxo last year, at $8.50 cash per share it represents a healthy 33% premium over Quadramed's closing price of $6.41 and a 93% annualized return since the company was profiled by Sirtuin Investor on July 28, 2009. It's difficult to determine if a bidding war will start but it is certainly a possibility.

Congratulations to all who did their own due diligence and purchased shares.

Quadraned Snags Another McKesson Executive

Quadramed today announced the appointment of Michael J. Simpson, a former McKesson executive, to the post of Senor Vice President, Product Strategy and Development. As part of his signing, he was granted warrants controlling 90,000 shares of QDHC common stock. He becomes the second executive, along with CEO Duncan James, to be brought on by the Quadramed Board of Directors from McKesson, a $16,000,000,000 health care and information technology behemoth. In my view, this is another good sign that the Board of Directors is serious about turning this company around after a prolonged period of lackluster results. To learn more about my reasons for owning QDHC NOW read my blog entry dated July 28, 2009. Quadramed hasn't done much since my profile on it last July, but I do believe it is well positioned to take advantage of the billions of Obama dollars put forth in the stimulus package with the goal of automating the health care industry. Apparently so do two former executives of McKesson. Do your own DD.