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You know that buying a stock makes you part owner of a company, theoretically with millions of other people. But, while ownership has its privileges (at minimum you get a neat stock certificate and an invitation to the annual meeting), being an owner doesn't necessarily pay. Sure, you make money if the stock goes up, but only if you sell, and you can, in theory, lose all the value of your investment if the stock tanks.
Enter the dividend. Here, you get money simply from holding the stock. Companies pay a yield, which is expressed in a percentage based on the stock's price. For example, if a stock trades at $10, and pays a 10% annual yield, your dividend payment would be a $1. (Usually, companies break out the payments quarterly, so, using our example, you¿d get, well, a quarter each quarter.)
Companies that pay dividends fall into a few categories. First, you've got your big, stable companies that generate enough cash that it makes sense to throw some back to shareholders. Next, there are businesses, like real estate investment trusts, that are in the business of sitting back and receiving cash, then distributing it to holders. And, then there are companies that need to dangle a high dividend yield like a carrot to ease investor fears. Cigarette-maker Altria has been doing this for years.
Simply because a company pays a dividend doesn't make it a good investment. After all, you may want to take a chance on a growth stock that can move higher in price than dividend payers are known to do. But, you can¿t beat the safety of knowing that, even if a stock doesn't move in a year, you¿re at least making something off your investment.
Home / Markets / Industries / Health Care
Tuesday, July 01, 2008
Dutton Associates Announces Investment Opinion: MediciNova Strong Speculative Buy Rating In Update Coverage By Dutton Associates
Comtex
ROSEVILLE, Calif., Jul 01, 2008 (BUSINESS WIRE) ----Dutton Associates updates its coverage of MediciNova (Nasdaq: MNOV) maintaining a Strong Speculative Buy rating and a $10.00 price target. The 10-page report by Dutton senior analyst Wayne T. Lottinville, CFA is available at www.jmdutton.com as well as from First Call, Bloomberg Professional, Zacks, Reuters, Knobias, and other leading financial portals.
We continue to believe that MediciNova is significantly undervalued. The Company's near-term drivers of its value are shown in Table 1 in our report. The Company's cash and marketable securities on its balance sheet are more valuable than its market capitalization, which, in our opinion, represents significant misvaluation given the Company's product pipeline and results announced to date. This cash balance should provide the Company with full cost coverage until year-end. By then, MediciNova may have secured a partner and additional financing to move its multiple sclerosis drug into Phase 3 testing. MediciNova is developing eight unique, differentiated small molecules for nine therapeutic indications. These drug candidates offer significant potential improvements over current standards of care. MediciNova's development programs include potential treatments for asthma, multiple sclerosis, and cancer. In a strategic move last year, the Company decided to prioritize two of its most promising programs: MN-221 for the treatment of status asthmaticus and MN-166 for the treatment of multiple sclerosis. Both programs are expected to drive the value of the Company's stock in the short term.
About Dutton Associates
Dutton Associates is one of the largest independent investment research firms in the U.S. Its 30 senior analysts are primarily CFAs, and have expertise in many industries. Dutton Associates provides continuing analyst coverage of over 140 enrolled companies, and its research, estimates, and ratings are carried in all the major databases serving institutions and online investors.
The cost of enrollment in our one-year continuing research program is US $35,000 prepaid for 4 Research Reports, typically published quarterly, and requisite Research Notes. Dutton Associates received $59,000 from the Company for 7 Research Reports with coverage commencing on 12/22/2006. We do not accept payment of our fees in company stock. Our principals and analysts are prohibited from owning or trading in securities of covered companies. The views expressed in this research report accurately reflect the analyst's personal views about the subject securities or issuer. Neither the analyst's compensation nor the compensation received by us is in any way related to the specific ratings or views contained in this research report or note. Please read full disclosures and analyst background at www.jmdutton.com before investing.
SOURCE: MediciNova
Dutton Associates John M. Dutton, President, 916-960-0623
Copyright Business Wire 2008
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