1) Alliance Fiber Optic Products, Inc   AFOP $.64

41,776,011 s/o as of October 31,  2008; 0 preferred s/o.
$23m cash; $937k debt.
9-month revenue up ~20%; 9-month net income .08 v .05

Founded in 1995, Alliance Fiber Optic Products, Inc. designs, manufactures and markets a broad range of high performance fiber optic components and integrated modules. AFOP’s products are used by leading and emerging communications equipment manufacturers to deliver optical networking systems to the long-haul, enterprise, metropolitan and last mile access segments of the communications network. AFOP offers a broad product line of passive optical components, including interconnect systems, couplers and splitters, thin film DWDM components and modules, fixed and variable optical attenuators. AFOP is headquartered in Sunnyvale, California, with manufacturing and product development capabilities in the United States, Taiwan and China. AFOP’s website is located at www.afop.com.

2) Alloy Steel International, Inc.  AYSI $.50

16,950,000 s/o as of December 1, 2008; 0 preferred s/o.
$664k cash; $301k debt.
Year-over-year sales $13,511,458 v. $8,729,644. Year-over-year net income: $2,507,912 or $0.15 per share, for the year ended September 30, 2008, compared to $1,308,865 or $0.08 per share for the year ended September 30, 2007.

Alloy Steel International, Inc., together with its subsidiary, Alloy Steel Australia (Int.) Pty Ltd., engages in the manufacture and distribution of Arcoplate, a wear-resistant alloy overlay wear plate. It offers fused-alloy steel plates for installation and use in structures and machinery that suffer wear and hang-up problems. The company is also developing the 3-D Pipefitting Cladder process. Alloy Steel International’s customer base primarily consists of companies involved in the mining and dredging industries in Australia, the United States, South America, India, Indonesia, Singapore, South Africa, Japan, China, Canada, and Malaysia. The company was founded in 2000 and is based in Malaga, Australia. Web Site: http://www.alloysteel.net

3) Artificial Life, Inc.  ALIF $.915

47,724,132 s/o as of October 29, 2008; 0 preferred s/o.
$2.7m cash; $1.44m debt.
9-month revenue up ~400%; 9-month net income .18 v (-.03)

Artificial Life, Inc. is a public US corporation headquartered in Los Angeles, with its production center in Hong Kong and additional offices in Berlin (EMEA headquarters) and Tokyo. As a leading, full-service provider of mobile broadband 3G technology, mobile participation TV, mobile gaming, content and business applications, Artificial Life provides 2D and 3D multi- and single player rich-media applications for 3G, 3.5G and 4G network-enabled mobile phones. Recognized internationally for outstanding content quality and technology, Artificial Life transcends traditional modes of mobile communications and interactive gaming. For more information, please visit http://www.artificial-life.com or the company’s m-commerce portal at http://www.botme.com.

4) China Sun Group High-Tech Co.  CSGH $.44

53,422,971 s/o as of October 14, 2008; 0 preferred s/o.
$11.09m cash, $0 long-term debt.
3-month rev up ~ 150%; 3-month net income .04/sh v .01/sh

Recent News:
China Sun Group High-Tech Co. Develops New Product ‘Lithium Iron Phosphate’

China Sun Group High-Tech Co., (”China Sun Group”) produces anode materials used in lithium ion batteries. Through its wholly-owned operating subsidiary, Dalian Xinyang High-Tech Development Co. Ltd (”DLX”), the Company primarily produces cobaltosic oxide and lithium cobalt oxide. According to the China Battery Industry Association, DLX has the second largest cobalt series production capacity in the People’s Republic of China. Through its research and development division, DLX owns a proprietary series of nanometer technologies that supply state-of-the-art components for advanced lithium ion batteries. Leveraging its state-of-the-art technology, high-quality product line and scalable production capacity, the Company plans to create a fully integrated supply chain from the primary manufacturing of cobalt ore to finished products, including lithium ion batteries. For more information, visit http://www.china-sun.cn

5) Dynavax Technologies Corporation  DVAX $.84

39,854,265 s/o as of October 31, 2008; 0 preferred s/o.
$64m cash and securities; $0 long-term debt.
9-month revenue up ~ 400%; 9-month net loss (-.60/sh) v (-1.21/sh)

Recent news:
Dynavax ends deal with Merck for Hepatitis B vaccine
Dynavax signs development deal with Glaxo

Dynavax Technologies Corporation, a biopharmaceutical company, discovers, develops, and commercializes Toll-like Receptor 9 (TLR9) agonist-based products to treat and prevent infectious diseases, allergies, cancer, and chronic inflammatory diseases using proprietary approaches that alter immune system responses in specific ways. The company’s TLR9 agonists are based on immunostimulatory sequences (ISS), which are short DNA sequences that enable the immune system to fight disease and control chronic inflammation. Its product candidates include TOLAMBA, a ragweed allergy therapy in Phase II clinical trial; a therapy for metastatic colorectal cancer that is in Phase I clinical trial; and a therapy for hepatitis B in Phase I clinical trial. The company’s preclinical asthma and chronic obstructive pulmonary disease (COPD) program is partnered with AstraZeneca AB. It has a strategic alliance agreement with GlaxoSmithKline plc to discover, develop, and commercialize novel inhibitors of endosomal Toll-like Receptors for the treatment of immuno-inflammatory diseases. Dynavax Technologies Corporation was founded in 1996 under the name Double Helix Corporation and subsequently changed its name to Dynavax Technologies Corporation. The company is based in Berkeley, California. Web Site: http://www.dynavax.com

6) Heartland, Inc.  HTLJ $.25

41,783,107 s/o as of November 1, 2008; 2.37m preferred s/o.
$856kcash; $1.5m long term debt
9-month rev up ~ 50%; 9-month diluted net income .035/sh v (-.02/sh)

Heartland, Inc., through its subsidiary, Mound Technologies, Inc., engages in the fabrication of structural and miscellaneous steel products. The company offers structural steel, miscellaneous metals, steel stairs, railings, bar joists, and metal decks to general contractors and fabricators in the United States. It also provides erection services. The company was incorporated in 2002 and is headquartered in Middlesboro, Kentucky. Web Site: http://www.heartlandholdingsinc.com

7) ZAGG  Incorporated  ZAGG $.93

19,143,995 s/o as of November 12, 2008; 0 preferred s/o.
950k cash; 24k long-term debt.
9-month revenue up ~ 300%; 9-month net income .05/sh v (-.07/sh)

ZAGG Incorporated designs, manufactures, and distributes protective coverings for consumer electronic and hand-held devices under the brand name invisibleSHIELD primarily in the United States and Europe. Its invisibleSHIELD, a protective film covering designed for iPods, laptops, cell phones, digital cameras, personal digital assistants, MP3 players, watch faces, GPS systems, gaming devices, and other items. The company also offers RockStic portable speaker system designed for Apple iPod and compatible with various digital media players. In addition, it sells accessories for electronics devices, including power cords, chargers, and adapters. In addition, the company offers approximately 2,000 precision pre-cut designs through online channels, resellers, college bookstores, Mac stores, and mail kiosks. ZAGG Incorporated sells its products directly through its Web site, distributors, kiosk vendors in shopping malls and retail centers, and electronics retailers. The company was founded in 2005 and is based in Salt Lake City, Utah. (from stock board - The 4.2 million warrants at 1.20 a share create overhead resistance). Web Site: http://www.ZAGG.com

CLFD 1.26  +.12

HAUP 1.12 +.02

GNLB 1.29 +.01

CLFD and HAUP both have marketcaps below cash value.

“Xenonics’ improved operating performance for fiscal 2008 versus fiscal 2007 was driven by higher shipments of our NightHunter high-intensity illumination devices to U.S. Army, U.S. Marines and military distributors, and sales of our patented SuperVision high-definition night vision products to more than 100 police and government agencies throughout the United States. Looking forward, with more than $11 million in Operational Needs Statements requesting funding for purchases of NightHunter 3 already submitted by military units, and the growth we are generating in our SuperVision customer base in both the U.S. and abroad, we believe that revenue can double again in fiscal 2009 and the Company can deliver a profit for the year,” said Chief Executive Officer Chuck Hunter.

Click here for complete article

It should also be noted that large Flow International shareholder, Dan Loeb of Third Point LLC, recently disclosed he cut his share by over 2 million shares to 4.7%.

Shares of Flow International closed today at 1.99 up 15% and was up 9% yesterday. The 52-week range is $1.21-$11.40.

Flow International Corporation, together with its subsidiaries, engages in designing, developing, manufacturing, marketing, installing, and servicing ultrahigh-pressure waterjet technology.

MKRS closed today at .20

1) 3rd quarter net income increases to a $1.4 million versus a loss of
$1.9 Million in the 3rd quarter of 2007
2) 3rd quarter diluted EPS climbs to $0.15 versus a loss of $(0.26) in
the 3rd quarter of 2007
3) Revenue for first nine months of 2008 increases to a record $43.2
million
4) EPS for First Nine months climbs to a record $0.48 per share

CNAM currently at $3.00.

Gilbert-based Universal Tracking Solutions is trading under the ticker symbol UTRK on the Over the Counter Bulletin Board. The company reports it has about 14 million shares outstanding, with 1.7 million in free trading.

The stock opened at 14 cents per share Tuesday morning, and as of 9:15 a.m. it was trading at 12 cents.

Universal Tracking Solutions was founded in August 2006. Company officials said UTS has had eight consecutive quarters of record revenue. Financials for the period ended Sept. 30 will be released on Thursday.

UTS provides GPS fleet management solutions. The company has developed an enhanced 3-D application specifically for organizations wishing to keep it running all day. Users can tilt and rotate the map to gain a better perspective of the vehicle’s position.

Furthermore, users can play back the routes a vehicle has taken, much like an animated movie showing stops, speeds, direction and more.

For more: www.universaltrackingsolutions.com.

UTRK closed today at .23 +.13 (130%)

Ms. Momoko Beran, chief financial officer of Simulations Plus, said: The board of directors has authorized a share repurchase program enabling the buyback of up to $2.5 million in shares during a 12-month period beginning Monday, October 27, 2008. Repurchases may be made in the open market, through a broker, or through privately negotiated transactions, subject to market conditions, applicable legal requirements and other factors. See entire press release.

As of this posting SLP is currently trading at $1.13.

It seems as if almost no sector is safe in the present market, but for investors who are looking for long-term value/growth plays, the recent selloff may have opened significant opportunity within stem cell stocks.

Stem Cell Basics
Stem cells are the building blocks of our body’s ability to organically reproduce and/or evolve on a cellular level, to grow and heal. They are special because they can specialize into various cell types, including muscle and nerve cells, while retaining the ability to reproduce through cellular division. These two properties make them very valuable in research.

Stem cell research is often thought of as a “new science”, appearing only in the last 10 years; however, stem cell research has actually been around for almost 50 years. In the 1960s Ernest McCulloch joined forces with James Till at the Ontario Cancer Institute in Canada, where the hematologist and biophysicist began experimenting on mice to see if bone marrow cells would reproduce in irradiated mice. The duo observed positive results in the spleens of their patients and in 1963, published their results in Nature.

Since that first experiment the science has slowly grown, and controversy has grown with it. Objection to the research focuses on the use, and destruction, of human embryonic stem cells and the possibility that the research could lead to human cloning.

Implications to Medicine and Investors
While on a recent trip to the mid-west, I had the opportunity to visit with Dan Busse, a physician and medical advisory board member of Regenerative Sciences in Broomfield, Colorado, a private bio-medical firm utilizing stem cells to create a non-surgical treatment option for people suffering from pain in their bones, joints, tendons/ligaments and lower back due to in acute injury or chronic degeneration.

In my conversation with Busse, I was surprised to learn of the progress and development not only at Regenerative Sciences, but within the industry as a whole.

While stem cells apply to many different aspects of medicine (including cardiology and cancer treatment, for example), Regenerative Sciences (RSI) primarily focuses on tissue regeneration in the orthopedic arena. The firm is on the cutting edge of changing medical care as we know it.

Stem cells can not only aid in healing after major surgery, but in some cases, completely replace the need for surgery altogether. “This is an exciting time to be involved in the stem cell field,” Busse said. “At Regenerative Sciences, our successful regeneration of cartilage, bone, lumbar discs, and soft tissue has relieved the pain of people who were otherwise counseled to have major surgeries. This is the beginning of an era where the use of stem cells in a “needle in, needle out” procedure can spare the pain, expense, complications, and recovery time involved with traditional surgery.” (To learn more about investing in this area, be sure to check out our Biotechnology Industry Handbook.)

Stem Cells for Wall Street
Looking into the public space of stem cells, the arena is still fairly new when it comes to the good old bottom line, as witnessed in companies like StemCells (Nasdaq:STEM) posting widening quarterly losses.  In the second quarter of 2008, the company announced a loss of $6.7 million, or 8 cents per share, versus $5.7 million, or 7 cents per share in the same quarter last year.

Small stem cell companies face significant difficulty in the present environment in both public acceptance and within the development of their sciences, as well.  However, as the sector progresses, it’s likely that giants like Amgen (Nasdaq:AMGN) and Celgene (Nasdaq:CELG) will begin to sincerely wade in. One of the most prolific companies in the space is ThermoGenesis (Nasdaq:KOOL). In early September ThermoGenesis actually posted blowout earnings in the fourth quarter ended June 30, 2008.  In all, the company announced $7.2 million in revenue for the quarter, a whopping 104% increase over the previous year. During the quarterly earnings announcement, the company also disclosed a fresh distribution partnership with Celling Technologies for the former’s MarrowXpress product line.

When looking at the above stocks, investors may want to be wary of Amgen, as the stock is trading with potentially top-heavy price-to-earnings and price-to-sales multiples of 17.8 and 3.4, respectively. Investors should also note that Celgene is presently trading with a price-to-sales ratio of 13.

Bottom Line on ThermoGenesis
On Wednesday October 15, ThermoGenesis actually surged 22% even in the midst of a larger 8.47% decline in the Nasdaq. On Thursday, October 16, however, the stock gave back 15.6% of the previous day’s gains. With the stock having been beaten down to just above $1 over the past few weeks, jittery investors are buying and selling the stock at the slightest sign of volatility. However, at current prices, the company could easily be a viable takeover candidate for larger conglomerates in the space, something investors who can handle extra risk, may want to know.

This volatile sector can provide huge gains, but there’s also lots of downside. Read The Ups And Downs Of Biotechnology.

By Mark Whistler

Mark Whistler is a trader, author and analyst. He is the senior market strategist at TradingMarkets.com and heads the Forex Trading Service Forex Force.

His books include “Trade With Passion and Purpose” (2007), “Trading Pairs” (2004), “Profit from China” (2006) and “Profit from Uranium” (2006). Mark’s newest book, “The Swing Trader’s Bible”, co-authored with CNBC/Fox News regular guest Matt McCall, will be on shelves in the summer of 2008.

Whistler is also the founder of WallStreetRockStar.com and writes regularly for TraderDaily.com. In his spare time, Whistler operates an art gallery in Baltimore, Md., along with Eats For The Streets, a growing organization - dedicated to helping the homeless across America. At the time of writing Mark Whistler did not own shares in any of the companies mentioned in this article.