Tuesday Winners: Durect, A123 Systems and Gammon Gold

Among the biggest winners in Tuesday’s early trading are Durect (Nasdaq: DRRX), A123 Systems (Nasdaq: AONE) and Gammon Gold (NYSE: GRS).

Top Percentage Gainers — Tuesday, June 8, 2010
Company Name (Ticker) Intra-Day Price Intra-Day
% Gain
52-Week High 52-Week Low
Durect (Nasdaq: DRRX) $2.62 +8.3% $3.14 $1.91
Gammon Gold (NYSE: GRS) $7.85 +5.1% $12.63 $6.07
A123 Systems
(Nasdaq: AONE)
$8.27 +3.3% $28.20 $8.00

*Table includes companies with minimum market capitalizations of $200 million and three month trading volumes of at least 100,000 shares. All percentage returns are listed as of 11:55AM Eastern Standard Time. Click on ticker symbols for up-to-the-minute price quotes and percentage gain data.

Navistar Rescues a sinking A123 Systems

Shares of advanced battery maker A123 Systems (Nasdaq: AONE) hit a new all-time low on Monday as investors dump any stocks that are unlikely to be profitable in the near-term. Yet after the closing bell on Monday, Navistar (NYSE: NAV) threw AONE’s investors a bone by announcing an expansion in the two firms’ relationship.

#-ad_banner-#Navistar has developed a fully-electric truck that is suitable for package delivery firms and courier services, and will use AONE’s batteries. Heavy vehicles are especially suitable for electric vehicles, as electric motors have a great deal of torque and do not strain under extreme load conditions. The announcement pushed shares up +3% in Tuesday’s trading.

Action to Take –> We wrote about AONE’s recent travails about three weeks ago, noting that investors had lost patience with the company’s growing pains. Shares have fallen further since then, likely to a point where aggressive tech investors find them too cheap to ignore. Revenues are expected to start sharply rising in the September quarter, and if the company can post more announcements like this Navistar deal, investors will have increased confidence that expectations of 100+% revenue growth in 2011 can be achieved.


Durect Finds a Big Partner

At the close of Monday trading, shares of Durect (Nasdaq: DRRX) were valued at around $210 million. But after the bell, Durect signed a deal that could net it up to $212 million in cash, equaling that market value. Hospira (NYSE: HSP) has agreed to pay Durect $27 million to co-market Durect’s long-lasting localized anesthetic now, and the remaining funds will be released if the two firms can meet clinical milestones. Moreover, Durect will receive royalty payments on all sales if and when the drug is approved by the U.S. Food and Drug Administration (FDA). Curiously, the +8% gain in shares Tuesday is a mere fraction of the value of the deal.

Action to Take –> It’s only a matter of time before investors do the math here. Even assuming some sort of deal was baked into the stock price, few could have expected a deal of such magnitude. Look for further gains in the sessions ahead as biotech-focused investors warm to this story.


Mining Stocks Shining Brighter

A whole host of mining stocks are trading up sharply on Tuesday: Entree Gold (AMEX: EGI), Gammon Gold (NYSE: GRS), Seabridge Gold (AMEX: SA), MineFinders (AMEX: MFN) and Jaguar Mining (NYSE: JAG) are up around +5% or more. Another half-dozen mining stock are up +3% to +4% in Tuesday trading.

The gains come as gold pushes higher to a record $1,246 an ounce (although on an inflation-adjusted basis, it’s well off its all-time high of around $2,000). We took a deep look at gold in this article late last month.

Action to Take –> Gold is partially benefitting from the troubles in Europe, and as the continent settles down, the gold trade may reverse. For gold investors that fear runaway inflation and see the precious metal as a hedge, know that inflation numbers are likely to stay quiescent for the foreseeable future as the global economy only slowly emerges from its funk.