Re: biotech
Recent IPOs (I'll call RI)are more likely to rocket short term, and their long-term potential is less certain.
More established companies (I'll call EC) are less likely to rocket, but their long-term potential is somewhat easier to figure out, especially if they have established earnings.
The smaller breakout companies (I'll call BC) are more of a gamble, but they also have the potential to return a great deal more to investors based on relative market cap to growth potential.
The following represent a choice of stocks based upon my conversations with some people who are versed in biotech, and my own reasearch and TA. I gave a preference to solid fundamentals over TA, with the view to relative safety. There are a number of stocks whose TA is screamingly hot, but whose fundamentals are suspect according to my consultants. I excluded those - the result is that while these screamers may outperform in the short term, you never know when "reality" may catch up, and the stock may suffer a precipitous drop. This does not mean of course that even the "solid" stock may not experience a decline, but that at least there is a "solid foundation" that gives some kind of hope of recovery. Obviously I did not ignore TA since I'm interested in stock performance, it is just a question of relative weighting of FA and TA.
CALP - a true bio-TECH company, with very strong technology, and very good prospects in servicing the needs of a lot of pharma companies. RI. Short term as well as long term solid, ST target 250.
MAXY - very solid science, a leader in DMO. One interesting aspect here is the fact that there is a connection with DVSA - seems the MAXY people are convinced that their science is more robust than DVSA, and there *may* be an issue at some point of MAXY suing DVSA over some possible patent infringements. However I don't know what the merits of this are, and I tend to dismiss this. RI. ST and LT solid, ST target $240.
DVSA - very dynamic company, real possibility of strong revenue growth. RI. ST and LT solid, ST target $260.
MYGN - in a unique space with some very unique expertise, very strong science. EC. ST and LT solid, ST target $200.
LYNX - excellent patents in a very good growth area. Some of the best financial prospects in their field. EC. ST and LT solid, ST target $180.
GZTC - leader in a very hot area. Things are cooking at this company with strong prospects of many more compounds. BC. ST and LT solid, ST target $90.
ONXX - leaders in virus-based cancer treatments, have a very strong relationship w/ WLA. BC. ST solid, ST target $90.
TRGA - dynamic management, good libraries, growing. BC. ST and LT solid, ST target $30.
Biotech is hot these days. Odds are that it will remain hot for some time. Yet, a lot of this is dependent on market and sector sentiment. The sentiment will likely hold for some time, but should the market have a prolonged correction, these stocks will suffer more than many tech and internet stocks.
All in my opinion. Do your own DD.
Morgan |
