The cat's come back! He just couldn't stay away.

Italy yesterday urged the European Union to resume efforts to set up a financial transaction tax to raise money. Italy currently holds the EU presidency and it is one of the 11 countries who agreed to create such a tax among themselves, even if other member countries stayed away. But the 11 cannot agree on derivative trading rules, so Rome asked that ambassadors to the Common Market get to work on hammering out a rule that will satisfy the eleven who want a “Tobin tax”. This was reported by both Bloomberg and Reuters this morning.

I just wanted to put in my oar in favor of Doctors Without Borders, which I have been donating to for over 40 years (after my first visit to West Africa, in fact.) Dr KSS, the self-promoting doctors who writes for www.stockgumshoe.com (which I subscribe too) today attacked the charity because he thinks Africa needs more running water and should not attract other doctors who are looking to become heroes. I think Dr KSS is a flake anyway because of his attack on the management of a biotech start-up he initially recommended on that site, which I bought and am sticking with. 

Today's article is delayed because i stayed up too late last night at the gastro-pub and overslept. Then I had to spend long hours covering too many results from out companies for a single morning.

I will write up my notes about Israeli indexation tomorrow. It is a worthy subject for our newsletter on American Depositary Receipts, with implications far beyond the minor market (by world standards) of Tel Aviv.

Results

*Cameco missed on both sales and earnings in Q3. The main reason was lower earnings from uranium mining because of higher costs of production. The Canada uranium mining giant had some good news, namely that its troubled Cigar Lake has begun producing uranium concentrate, that it had settled with striking miners, and that it expects sales to pick up. And the low result was partly because CCJ wrote off C$184 mn for its GE-Hitachi Global Laser Enrichment (GLE) venture.

Still the bottom line was “a challenge” to quote CEO Time Gitzel. Revenues fell 2% to C$587 mn and net profits dropped 56% to a C$146 mn loss vs a gain a year before. Per share, the hit after tax and other adjustments was loss of 37 loonie cents from plus 53 loonie cents in Q3 2013.

The reasons besides GLE included impairment charges of C$12 mn for GovEx Uranium Inc, a C$18 mn fee for early cancellation of the Springfields Fuels conversion deal, no earnings from spun-off BPLP, and losses on forex derivatives. With adjustments, CCJ claimed it had made $207 mn in 9-mo earnings or 52 loonie cents/sh vs C$295 mn or 75 cents in the prior 9 months. Canada tax recovery explains part of the positive results.

This is an example of kitchen-sink accounting. While Cameco did not specualte about near term trends in physical uranium beyond noting that the spot price is up, it did reiterate that long-term demand will rise as project delays are overcome. There are about 70 new reactors being build and more are planned, which CCJ expects it can benefit from. Its strategy is “to profitably produce at a pace aligened with market signals, while maintainint the ability to respond to conditions as they evolve.” Doesn't everyone do this?

Its new 2014 forecasts are that it will proudce 22.6-22.8 mn lbs and sell 31-33 mn lbs, a drop of 10 to 15% from prior forecasts, and a drop of up to 5% from 2013 levels. Alas, the cost of sales will rise 5-10% on lower volumes and administrative costs rise up to 5% more. These are the reverse of earlier forecasts of a lower cost of sales and administration. Exploration costs will rise up to 5% vs a prior estimate of a drop and capital expeditures will hit C$490 mn, assuming trend continue.

CCJ sensitivity analysis works out that a US$5 increase in the spot price of uranium translates into a C$20 mn rise in its revenues and a C$8 mn rise in earnings. It also figures that a penny fall in the C$ against the greenback will boost its revnues by C$3 mn and its earnings by something under C$1 mn.

As long-term readers know, I am a nuclear enthusiast, but this is a tough stance to stick with. It is unclear to me as to CCJ if the current jump in the spot price for uranium will continue in the short-term. Canadian CCJ reports in international financial reporting standards, not converted to US GAAP.

The stock fell over 3% today.

*Israeli Compugen is still losing money, 11 cents/sh in Q3, up over 8% y/o/y. The consensus forecast was a loss off 11.3 to 12 cents, so you could say it beat. But it is selling more and revenues bounded up 6% to $1.7 mn, boosted by milestone payments. Its gross profits are now positive, at $1 mn, up 900% from prior Q3, but the operating loss grew because of higher operating expenses (including opening a lab in California). It expects to break into the black this year. The stock is off 9% at $7.3901 now.

I now can buy more to make up for my mistaken sale 14 months ago. You may follow me or not. I do not think the bottom line matters that much for a drug or biotech startup. I put in a bid at $7.4 which was filled. The stock will now be fully weighted in our tables.

*Some better news from a 3^rd company, Alkermes of Ireland, which beat with Q3 net income of $3.9 mn and eps of 3 cents (vs analyst forecast of 1 cent.) ALKS revenues also rose sharply, up 14.5% to $160 mn. In GAAP terms it lost $40 mn or 27 cents in the quarter, however. It makes most of its money from manufacturing and royalty income for older drugs and this business grew sharply y/o/y.

We bought into ALKS as a possible tax investion play many moons ago but stick with it as a developer of a new long-term drug delivery system of an injection which produces within the patients' body a month to 2 mos of Abilify to treat schizophrenia. It has now been accepted by the US FDA as an NDA which will result in a ruling by August 2015.

In addition ALKS also researches other central nervous systems diseases, like bipolar disease, addiction, and depression and has a full pipeline beyond schizophrenia. Its pipeline includes drugs against multiple sclerosis, alcohol and opium dependence, and even diabetes. Even without a tax break it can be a takeover candidate.

ALKS adjusted non-GAAP numbers do not include Civitas Therapeutics, a recent acquisition, which can cost it $40 mn less going forward than the $100 mn current costs or one-off gains from its Acceleron sale. It also expects its income tax expenses to rise 2 to 3x from prior estimates, to $30-35 mn.

Despite the good gloss insiders have been selling ALKS presumably in reaction to the US crackdown on inversions. But ALKS reaffirmed its guidance and the share is up ~3%.

More Drugs

*GlaxoSmithKline's chimp-based Ebola vaccine is being tested in Switzerland by 120 volunteer doctors and nurses who are being paid SwFr 800 ($845) for allowing an injection to test two possible dose levels against placebo. GSK is using a product developed by our Danish inoculation research firm, Bavarian Nordic, (BVNKF or BAVYY)combined with its own product. Medical professionals are more knowledgeable about trial risks than the population at large, with the exception of course of Dr KSS.

*His latest attack on management of Benitec, BTEBY, has taken the share down by 16.2% today, to $2.33, well below the price at which Dr KSS first advised buying (before the ADR issue.) I have written to management in Australia urging them to boost visibility by presenting at US biotech start-up conferences.

*Novo Nordisk fell sharply on news that its rival in producing insulin drugs,Sanofi, has fired its CEO over worries over a price war to sign up diabetes patients. NVO is also hurting because Denmark is likely to be hurt by Swedish zero-bound interest rates and beggar-my-neighbor politics.

Other Sectors

*However, Sampo Oy, also from a Swedish trading partner country, Finland, is trending up but very active today. SAXPF used to be run by a Swedish-speaking Finn but I think he is only active behind the scenes now. The stock was recently downrated to neutral by Crédit Suisse.

*Portugal Telecom is again up for no good reason except Brazilian politics. I take what I can get. PT.

*The news that 2 former Pimco execs have rejoined the firm, not including Mohammed El-Erian, has suprisingly led to a further fall in the share price of Allianz Versicherung, AZSEY. They are Michael Spence, a Nobel laureate economist to consult on macro-economics and Jeremie Banet, a portfolio mgr. They both left when El-Erian resigned in Feb. but unlike the latter they did not land new jobs with the German parent.

*Ecopetrol wil report on Q3 on Friday before markets open and hold conference calls on Nov. 4 in Spanish (1:30 pm US time) and English (3 p.m). EC is Colombia's big oil company whose recent discovery offshore the Gulf of Mexico has been overshadowed by other finds there.

*A consensus of analysts predicts that Santander will report EPS of 13 cents onNov. 4, up prom prior year12 cents. This probably means that SAN is chatting them up before the publication, but if it fails to meet that level we face a drop in the share price, perhaps why the stock is down today along with the euro.

Fund Notes

*Eduardo Garcia reports from Mexico City that Fibra Uno is seeking govt anti-monopoly approvals to invest about 20 bn pesos ($1.49 bn) in new real estate holdings in 5 more portfolios. The sites include 20 university campuses, 13 commercial sites and 3 Mexico city shopping centers, 7 land banks, and other sites. FBASF is now the most diversified REIT on earth, according to Bloomberg. Its net operating profit rose 61% in Q3 alone.

If it gets anti-trust approvals, Fibra Uno, the oldest Mexican REIT, plans to raise money on the bond markets in H1 2015, according to the IR direstor, Jorge Pigeon, cited by Eduardo. Part of the money will refinance existing debt of pesos 1 bn and 3-yr dollar obligations with some NMP 4 bn in new long-and short-term dollar and peso debt plus equity issues.

Fibra Uno expects that the energy reform will lead to more private capital flows to Mexico it can cash in on plus demand for office space and commercial property whose rents will rise. Already the REIT mentioned that a global oil company is seeking to rent 2000 meters squared of office space.

Eduardo Garcia edits www.sentidocomun.co.mx with which we exchange newsletters, and covered the FBASF day for us and his readers. FBASF is up 1.4% in US trading today.

*Our Swedish holding company Investor rose 7.4% after the Riksbank cut its lending rate to zero yesterday. IVSBF also gained because of the planned spinoff of Molnylke, a developer of wound healing products, of which it is the largest shareholder.

*Aberdeen Global Income Fund is paying a 7 cent dividend for Nov. FCO paid the same last mo.

*Stablemate Aberdeen Asia Pacific Fund is paying 3.5 cents. FAX also paid the same.

*My brokerage acct now shows a place-holder for new Herzfeld Caribbean (CUBA) untraded warrants to buy new 3:1 shares with no price of course.

*Ascendas has again fallen (if marginally) to $0.645. The Singapore-listed REIT, a favorite with non-resident Indians, is a bellwether for their view on Modi's policies. Of course things are slower to move than anyone expected before the election.

*With attacks on Shia Pakistanis the new mode, following the IS pattern in Arab countries, and with Imran Khan still insisting that he won the last election, our Pakistan Fund is down seriously. It is XDBMSCIPAKIST, an ETF, listed in Hong Kong as 3106.