From the International Arena…
12/15/2006 12:00 am EST
Veteran investment advisor Louis Navellier takes a journey across the sea in his latest missive to subscribers. Here, he profiles two very diverse businesses--one new and somewhat speculative, and another with years under its belt...
"Italy's Gentium S.p.A. (GENT NASDAQ GM) creates products to limit the damage done by cancer treatments, including chemotherapy, radiation therapy, and hormone therapy. Formerly known as Pharma Research, Gentium also develops and manufactures anticoagulants, products to manage thrombo-embolic disorders and ulcer treatments.
"Gentium focuses on the European and U.S. markets. Its sister company, Sirton, accounts for most of its revenue. Gentium's President and CEO, Laura Ferro, and her family own 91% of Gentium's outstanding stock through FinSirton, the parent company of both Gentium and Sirton.
"This is a small company at a $240 million market cap. Gentium's third-quarter sales rose 143%, but to just 900,000 euros ($1.2 million). The company's operating loss was 4.16 million euros ($5.5 million), compared with 2.32 million euros ($3 million) in the same quarter a year ago. Gentium has multiple Phase II and Phase III trials under way and has potential for explosive sales growth in the next few years.
"The stock recently gapped up on surging trading volume, as some investors expect Gentium to receive approvals soon. However, I must warn you that this stock is very thinly traded, excessively volatile and tricky to buy. I highly recommend that you place limit orders within 25 cents of the previous day's close when buying this stock.
"Britain's InterContinental Hotels Group PLC (IHG NYSE) is the world's largest hotel company by room count, with more than 3,600 properties in nearly 100 countries. The company's largest chain is Holiday Inn, offering reasonable accommodations at more than 1,430 locations in the United States, Europe, and Asia, with 1,500 limited-service locations operated under the Holiday Inn Express brand. IHG serves a more upscale market with the Crowne Plaza and InterContinental chains. And its Staybridge Suites and Candlewood Suites offer extended stays.
"The company's third-quarter earnings more than tripled after InterContinental sold some hotels to concentrate on a franchising business model. Due to these sales, third-quarter revenues declined 48% to 237 million pounds, but its earnings rose 368% to 162 million pounds ($316 million). Thanks to strong occupancy worldwide, revenue per room rose 8.6%.
"InterContinental recently announced that it will invest eight million pounds ($15.6 million) to acquire a majority stake in a hotel joint venture with All Nippon Airways to expand its presence in Japan, the world's second-largest hotel market. InterContinental already operates 11 hotels with 3,100 rooms in Japan, but gained almost 9,000 more rooms in the transaction."