ISIS: to double in 08 by Tobin Smith
Dec 17, 2007 18:36:44
In his latest newletter, Tobin Smith, a stock commentator regulary featured on bulls and bears, shares his stock picks that could double in 08. ISIS, our biotech idea, is listed on this list. Following is the excerpts from his newsletter.
FIVE MONEY DOUBLERS
It's never easy to predict the top performers from all the stocks in our ChangeWave Investing portfolio. But we thought it would be worth taking a shot at picking the five stocks we believe have the best chance for 100%-plus gains in 2008.
Of course, there are no guarantees, but after plugging a number of factors into the ChangeWave UNIVAC -- including valuation, market-cap size and momentum in particular technology sectors -- we came up with these five stocks:
* Anadigics (ANAD)
* Ascent Solar (ASTI)
* Basin Water (BWTR)
* Immersion Corp. (IMMR)
* Isis Pharmaceuticals (ISIS)
Anadigics
ANAD supplies the communications markets with its radio frequency integrated circuit (RFIC) solutions, which enable manufacturers of wireless and broadband products to improve performance by reducing the size and weight of their products, increasing power efficiency, improving reliability and reducing manufacturing cost and time to market.
The prospects for ANAD are strong because it is focused on two markets that are experiencing increasing worldwide demand:
1) Wireless (including CDMA, GSM, GPRS, EDGE and W-CDMA phones)
2) Broadband (including cable and terrestrial systems, which includes set-top boxes, television, DTV, HDTV and PVRs/DVRs)
ANAD shares are down sharply from the October high of $19.50 and that gives us an opening right now to build positions at very favorable levels.
Ascent Solar
Our ASTI recommendation is only two weeks old, but the company already delivered good news today. ASTI reported that it has successfully installed all of the equipment to complete the integration of its 1.5 megawatt (MW) production facility. Testing and integration of the new manufacturing line will start in January 2008.
Management characterizes this as ASTI's "first major milestone" and we think it's a good indication of bigger things to come next year. With the capital raised from Norsk Hydro earlier this year, Ascent expects to start development on its high-volume 100MW plant and to do it ahead of schedule. The first 25MW line should be completed by year-end 2009.
ASTI is one of a handful of companies leading the development of the next-generation of solar technologies. Its highly efficient thin-film Copper-Indium-Gallium-diSelenide (CIGS) solar cells will open up new markets for photovoltaics and undoubtedly establish the company as a big winner. Be sure to start or add to your ASTI positions under $20 per share.
Basin Water
Water is everywhere, but it is getting tougher to find the potable kind. Basin Water, our only water play so far, sells water treatment systems (its ion-exchange system removes arsenic, nitrate, perchlorate, uranium and chromium VI to non-detectable levels) to a range of customers including two of the largest investor-owned water utilities in the United States based on population served: California Water Service Co. and American States Water Co.
Basin Water shares recently took a big hit after the company showed a dramatically widening loss and revealed some managerial problems on contracts and other things. Despite the circus, the Water Wave is very powerful and BWTR remains positioned to ride it to profitability. So take advantage of this debacle to pick up shares for the big rebound ahead.
Immersion Corp.
As we recently pointed out, "much of Immersion's revenue currently comes from the video game controller world (and medical instruments), but that's only a thin slice of the total market its 'touchy-feely' haptic technology will eventually tackle."
Companies that want the best digital touch-screen experience will have to license Immersion's technology. We anticipate that sales on billions of digital devices such as full-screen mobile phones, GPS units, MP3 players, game controllers and remote controls will translate into mucho royalties for IMMR.
Revenue jumped 51% last quarter while IMMR turned a small profit. The fundamental outlook for 2008 is very good, so it's an opportune time to pick up this stock while credit crunch concerns are pulling down the market. The stock is a great buy here under $14 per share.
Isis Pharmaceuticals
Of the three biotech plays in our current portfolio, ISIS is the most-established of the trio, and it has already commercialized the world's first antisense drug and has 17 other drugs in development. The key for ISIS is the efficiency of their antisense drug discovery, enabling it to create new drugs that were impossible using traditional drug development methods.
Leveraging its clinical progress and formidable partnerships, Isis has bankrolled more than $200 million in cash, which means that Isis will be able to meet its anticipated funding requirements through at least the end of 2010.
Isis' technologies are incredibly disruptive and we anticipate seeing huge value drivers in the coming year. Whether it happens as a result of a takeover by a big pharma desperate to revitalize its pipeline, or through the increasingly positive recognition by investors for the value of its antisense technologies, we believe ISIS is our best bet for a money-doubler biotech in 2008.
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