STOCK: ******
HEALTHCARE
BIOTECHNOLOGY & DRUGS
TIP: Ribbon
Please email for access to subscription based contents.
Wednesday, February 16, 2011
Tuesday, February 08, 2011
Risk On: Orexigen, St. Joe Company
I will start off by saying that my view of the economy is very MIXED. I will get into the reasons the next time around. Here are a few more free picks because these are very risky plays and I want to document my theory here. I have one premium pick posted a few weeks ago that is doing quite well. Please contact me for gaining access to my premium picks.
OREXIGEN (OREX): I hope you like this call! After this stock got hammered, I called for a 'NIBBLE' in my last post. I parsed through a ton of data on both sides of how the FDA approval would play out and I ended up with the right conclusion. The proof was in the pudding of the FDA panel advisers meeting at the end of last year. This panel advises the FDA and while they approved Orexigen, it was a narrow approval vote and the theme was that there were concerns with elevated heart readings of patients. As I mentioned before, the FDA had to pull a previous diet drug from shelves due to cardiac concerns and I have a strong feeling that they didn't want to make the same mistake again (duh). Hence, the FDA voted to not APPROVE the drug, but called for more studies.
HOWEVER, the reason I call for a nibble of this stock at the 52 week low of $2.47 is because of the probability. The probability is likely that this drug won't die. Its comprised of two drugs that have already received FDA approvals separately. That means there is a chance for a few different outcomes:
~ More testing until even FDA approval
~ Sale of existing drug to another company that can use the technology
These outcomes led me to recommend a gamble on OREX. Since then I believe its been up 44% in a few days.
St. Joe Company (JOE): JOE continues my love of all stocks controversial. I am not sure why the 'Risk On' trades are of interest to me at this point but I want to make sure that I capture it here in my posts and some of the reasons why. JOE is a tough stock to recommend because it has a LOVE/HATE story line going on. Real estate companies and prime Florida locations makes its a darling, but the downfall of all real estate across the country has many thinking its on its last leg. The story drags on amongst investment titans. This stock is loved by famed mutual fund manager, Bruck Berkowitz, and hated by hedge fund genius David Einhorn. So the reason why I picked up a few shares the other day is because of a few reasons simple to probably only me.
REASONS I LIKE JOE:
~ Valuation: Many (wink:Einhorn) have hinted at valuation troubles lurking. I used to subscribe to this school of thought until the financial crisis taught me, there is a valuation crisis only if you can't get access to capital. Once banks got infused, they didn't have to write down every asset, they could afford to wait.
My opinion is JOE will not have to value its property at these historic lows...they can wait it out
~ Catalyst: Institutional love. This stock is attracting some big players, Bruce and I believe BlackRock on one side and of course Einhorn on the Other.
My opinion is JOE will benefit from its largest shareholders actively attempting to make this company more efficient and profitable. The don't have time to play and Bruce owns 29% of the damn stock...can you say his voice will be heard. And it has been, he's been out pumping up the stock recently, check CNBC.
~ Short Squeeze: This last one may be dumb, but everyone and their mom jumped on the Einhorn bandwagon and started SHORTING the stock. If either of my first two points prove to be correct the shares should jump as short sellers get squeezed out of betting this stock will go down. They will have to buy their shares back and...TA DA the stock rises.
Now the stock on Monday was up between 8-10% but I still bought because I think this is just the beginning of a beaten down stock with a serious plot...think Young & the Restless.
Pick up shares around $29 and anywhere below. I had to settle for $29.30 right before the close of Monday after I learned that morning listening to CNBC that Bruce it trying to get himself the Chairman spot and his business partner Mr. Fernandez the Vice Chairman spot. Can you say catalyst for change! Say goodbye to the scrubs on the board, there is a new sheriff in town. Any news like this and you will have buyers jumping on a beat down stock and short selling feeling the squeeze.
Disclosure: I own shares of St. Joes Company
OREXIGEN (OREX): I hope you like this call! After this stock got hammered, I called for a 'NIBBLE' in my last post. I parsed through a ton of data on both sides of how the FDA approval would play out and I ended up with the right conclusion. The proof was in the pudding of the FDA panel advisers meeting at the end of last year. This panel advises the FDA and while they approved Orexigen, it was a narrow approval vote and the theme was that there were concerns with elevated heart readings of patients. As I mentioned before, the FDA had to pull a previous diet drug from shelves due to cardiac concerns and I have a strong feeling that they didn't want to make the same mistake again (duh). Hence, the FDA voted to not APPROVE the drug, but called for more studies.
HOWEVER, the reason I call for a nibble of this stock at the 52 week low of $2.47 is because of the probability. The probability is likely that this drug won't die. Its comprised of two drugs that have already received FDA approvals separately. That means there is a chance for a few different outcomes:
~ More testing until even FDA approval
~ Sale of existing drug to another company that can use the technology
These outcomes led me to recommend a gamble on OREX. Since then I believe its been up 44% in a few days.
St. Joe Company (JOE): JOE continues my love of all stocks controversial. I am not sure why the 'Risk On' trades are of interest to me at this point but I want to make sure that I capture it here in my posts and some of the reasons why. JOE is a tough stock to recommend because it has a LOVE/HATE story line going on. Real estate companies and prime Florida locations makes its a darling, but the downfall of all real estate across the country has many thinking its on its last leg. The story drags on amongst investment titans. This stock is loved by famed mutual fund manager, Bruck Berkowitz, and hated by hedge fund genius David Einhorn. So the reason why I picked up a few shares the other day is because of a few reasons simple to probably only me.
REASONS I LIKE JOE:
~ Valuation: Many (wink:Einhorn) have hinted at valuation troubles lurking. I used to subscribe to this school of thought until the financial crisis taught me, there is a valuation crisis only if you can't get access to capital. Once banks got infused, they didn't have to write down every asset, they could afford to wait.
My opinion is JOE will not have to value its property at these historic lows...they can wait it out
~ Catalyst: Institutional love. This stock is attracting some big players, Bruce and I believe BlackRock on one side and of course Einhorn on the Other.
My opinion is JOE will benefit from its largest shareholders actively attempting to make this company more efficient and profitable. The don't have time to play and Bruce owns 29% of the damn stock...can you say his voice will be heard. And it has been, he's been out pumping up the stock recently, check CNBC.
~ Short Squeeze: This last one may be dumb, but everyone and their mom jumped on the Einhorn bandwagon and started SHORTING the stock. If either of my first two points prove to be correct the shares should jump as short sellers get squeezed out of betting this stock will go down. They will have to buy their shares back and...TA DA the stock rises.
Now the stock on Monday was up between 8-10% but I still bought because I think this is just the beginning of a beaten down stock with a serious plot...think Young & the Restless.
Pick up shares around $29 and anywhere below. I had to settle for $29.30 right before the close of Monday after I learned that morning listening to CNBC that Bruce it trying to get himself the Chairman spot and his business partner Mr. Fernandez the Vice Chairman spot. Can you say catalyst for change! Say goodbye to the scrubs on the board, there is a new sheriff in town. Any news like this and you will have buyers jumping on a beat down stock and short selling feeling the squeeze.
Disclosure: I own shares of St. Joes Company
Wednesday, February 02, 2011
Positive Earning and all to important Approvals...
I will first start off with Orexigen (OREX). The did not get the coveted FDA Board approval for Contrave, their weight loss drug. I was watching closely as many people made calculated bets on which way this all too important approval would go. I think the best write up was from an article on Seeking Alpha which outlines the cases for this drug to not get approved right away. It outlined points from the 2010 panel, not board, meeting which outlined that many doctors on the panel and board are concerned about the elevated readings blood pressure in people that were part of the phase III testing. Glad I read that article because I almost pulled the trigger. Oddly enough I think their may be an opportunity now that the stock was slammed by over 72% to the downside after the closing bell. It was from roughly $9 to a 52 week low of $2.47. If you've got ice in your veins because of the blizzard. Nibble here on Orexigen because again there is an all to important thesis out there about this stock. It was known in the FDA panel review that they already thought more monitoring of patients would need to be done based on patient data. This along with the comments from panel members should have been taken into consideration as the FDA was not looked in a favorable light due to the last approved diet drug that had to be pulled from the market. There is clearly a high hurdle rate that must be met for diet drugs. But at these levels for a drug that made it through Phase III with fairly good efficacy tests should be looked at closely.
Baidu (BIDU) - I've been watching this stock and the earnings were better than expected. Now is way above where I want to acquire but remember this is the Google of China, and there is serious value to be had.
Radisys (RSYS) - Finally, they reported better than expected earnings. We will need more quarters of this for the stock to keep rising.
Baidu (BIDU) - I've been watching this stock and the earnings were better than expected. Now is way above where I want to acquire but remember this is the Google of China, and there is serious value to be had.
Radisys (RSYS) - Finally, they reported better than expected earnings. We will need more quarters of this for the stock to keep rising.
Its A Blizzard In Chicago...
It is literally white out conditions here in Chicago and I now know what a true blizzard looks and feels like. And like the snow, I'll tell you that its tough to see through the market right now. I am impressed with the run the market has been on and it has broken through the all too important psychological barrier of 12,000 on the Dow Jones Industrial Average. I am cautious as most of the stocks that I am analyzing appear priced for perfection. And the hardest thing to do sometimes is to be idle and have a little dry powder.
Here are a few stocks I am keeping an eye on but even they are pushing higher very quickly. Here are a few selections for free, but remember I usually like a little safety before I enter the position:
EXAR Corp (EXAR)
American Superconductor (AMSC)
Here are a few stocks I am keeping an eye on but even they are pushing higher very quickly. Here are a few selections for free, but remember I usually like a little safety before I enter the position:
EXAR Corp (EXAR)
American Superconductor (AMSC)
Friday, January 28, 2011
Close Position: CIT, AIG
Now that my tracking tool is working again I can update when I anticipate closing certain recommendations from the past.
American International Group (AIG) - As you recall, I already recommended closing this position and I blame AIG on the confusing warrant situation. You remember we exited at roughly $55 a share. Due to the lack of availability in my tracking tool, it will unfortunately show that the position was closed much lower.
CIT Group (CIT) - This pick was from the middle of last year. You'll notice the trend with these trades is we believe in the policies of the Federal Government and many of the early investments they made we built positions in these companies. It is tough but you try to anticipate the turning point where the downside risk is no longer falling dramatically. Time to ring the register on CIT.
Also take a look at last roughly 20 picks that were closed, only 4 closed negatively. Not a bad trend.
American International Group (AIG) - As you recall, I already recommended closing this position and I blame AIG on the confusing warrant situation. You remember we exited at roughly $55 a share. Due to the lack of availability in my tracking tool, it will unfortunately show that the position was closed much lower.
CIT Group (CIT) - This pick was from the middle of last year. You'll notice the trend with these trades is we believe in the policies of the Federal Government and many of the early investments they made we built positions in these companies. It is tough but you try to anticipate the turning point where the downside risk is no longer falling dramatically. Time to ring the register on CIT.
Also take a look at last roughly 20 picks that were closed, only 4 closed negatively. Not a bad trend.
Track Please...
Check Please is a popular show here in Chicago that finds local restaurants that most people aren't too familiar and tells you all the reasons why you should stop by.
This post is called Track Please, because I am alerting you that it appears that my tracking tool located on the side of the page is finally back up and running. This is important because it allows me to visualize my performance over time after I have written and recommended various stocks.
Take the opportunity to review the performance of the last 10 or so picks. Here is a short snapshot of a few picks:
CSE: 42%
ICO: 112%
WFC: 18%
This post is called Track Please, because I am alerting you that it appears that my tracking tool located on the side of the page is finally back up and running. This is important because it allows me to visualize my performance over time after I have written and recommended various stocks.
Take the opportunity to review the performance of the last 10 or so picks. Here is a short snapshot of a few picks:
CSE: 42%
ICO: 112%
WFC: 18%
Sunday, January 23, 2011
Update: No AIG Warrants
Here is a quick update, AIG warrants are confusing. If you used the strategy that I posted you will not receive AIG warrants. Although most of the investing community believed that you needed to be a shareholder on record as of Jan 13, 2011, this was not the case. It turns out there was more hidden language than was originally believed on the warrants. I've learned that there was additional language located in the "tax" section of an SEC filing that indicated that you would have needed to have held your shares until Jan 19th.
So I feel stronger about our exit of AIG even though we didn't receive any warrants. We sold at the top of the range and that was well worth it when comparing the other alternative which is:
~ Still holding shares which dropped to $43 and the rights to a small amount of warrants in the future.
My feeling is when we hit our rock bottom price on AIG again, we can rebuy at a later point. I will repost where I think that is but for now let's use our last buying point as our benchmark for reentry.
Peace
So I feel stronger about our exit of AIG even though we didn't receive any warrants. We sold at the top of the range and that was well worth it when comparing the other alternative which is:
~ Still holding shares which dropped to $43 and the rights to a small amount of warrants in the future.
My feeling is when we hit our rock bottom price on AIG again, we can rebuy at a later point. I will repost where I think that is but for now let's use our last buying point as our benchmark for reentry.
Peace
Subscribe to:
Posts (Atom)