Cardiome Pharma Corp

Well here is the next stock we want to look at. Cardiome pharma corp is another small pharma company that has a good up side for a covered call strategy. First a quick update on the bond insurers that we discussed last week. It is looking more optomistic that a deal will get done for MBIA and Ambac so they can retain their AAA rating. It is not yet a done deal, but the chances are looking better than last week. All investing has risk. Please do not invest money that you cannot loose.

Cardiome Pharma Corp. (Cardiome) is a drug research and development company focused on developing drugs to treat or prevent cardiovascular diseases. The Company has four wholly owned subsidiaries: Rhythm-Search Developments Ltd.; Cardiome, Inc.; Cardiome Research and Development (Barbados), Inc., and Artesian Therapeutics, Inc. Vernakalant intravenous (iv) is in ongoing Phase III clinical and safety testing and Vernakalant (oral) is in Phase II clinical testing. The Artesian small molecule drug candidates are in pre-clinical testing.


CARDIOME PHARMA CORP: Stock Rating Summary
7
CARDIOME PHARMA CORP, a small-cap growth company in the health care sector, is expected to outperform the market over the next six months with very low risk.
10 is the best possible rating.
FundamentalGrade: NA
• The most recent quarterly earnings information is unavailable or inconsistent.
• Earnings growth information is unavailable or inconsistent.
• Earnings estimate revision information is unavailable or inconsistent.
OwnershipGrade: C
•Insider trading information is unavailable or inconsistent.
•Shares are being heavily sold by financial institutions. Neutral for a small company like CRME

ValuationGrade: B
•The price-to-earnings multiple is a negative number. No effect
•The price-to-sales multiple is significantly higher than the average for all stocks in the StockScouter universe. Negative for a small company like CRME
•The ratio of CRME's price-to-earnings multiple to its five-year growth rate is unavailable or inconsistent.

TechnicalGrade: C
•The StockScouter measure of relative price change and consistency is low. Negative
•Previous day’s closing price for CRME was significantly below its 50-day moving average, a level from which prices frequently rebound over the long term. Positive


Average brokerage recommendation is Moderate Buy.



Strategies:
Covered Call
Buy stock @ 6.02
Sell March 7.50 call @ 1.10
18.3% return in 39 days

Hedge Wrap
Buy stock @ 6.02
Sell March 7.50 call @ 1.10
Buy March 2.50 put @ 0.15
15.8% return in 39 days*

* - the March 5 put is selling at 0.95. That does not give much room between the call and the put. We will look at a covered call only or the 2.50 put if we want downside protection.

Talk to you tomorrow.