Qiagen Making A Come Back

Qiagen (Ticker: QGEN) kind of snuck up on me. It’s making multi year highs and I can see this stock going to $20 easily. This company is the leader in the plasmid purification market. If you do any molecular biology stuff, you’ll use a Qiagen kit to purify your DNA / RNA sample. The company is starting to steer itself into the molecular diagnostic market; that's where their big growth will come from. This company generates a ton of free cash and should easily grow their earnings 20%+ for the next couple of years. I’ve held this stock since the IPO many many years ago.

J.Crew - So Hot...

This evening, J.Crew (Ticker: JCG) announced the pricing of their secondary offering of 9 million shares at $37.81. The shares are being offered by the private investment group, Texas Pacific Group. This is very bullish for the stock since this will remove a large overhang. The fundamentals and the technicals both look terrific. This stock is so ready to take off!

Cashed In My Chips

I decided to cash in my chips today in MGM Mirage (Ticker: MGM). This stock was purchased on 12/4/06 at $54.85 and sold today at $70.63 generating a net return of 28.54%. I still like MGM Mirage, but it’s just had an amazing run. Any pullback in MGM Mirage and I’ll be back in. I used the proceeds from the MGM Mirage sale and added to MasterCard International (Ticker: MA) at $112.48 and Sears Holding (Ticker: SHLD) at $178.26.

20/20 - Digging Out of Debt

Did anyone catch last night’s edition of 20/20? The topic was Digging Out of Debt and they interviewed the Petersons, who were living off of their credit cards. They had $60,000 of credit card debt and that’s how they were surviving. They had two houses, time-shares, two cars, etc, but I believe in the end their net worth was ~ $8,000. Anyways, check out the 20/20 interview by clicking here. It's an eye opener.

Celgene Out & DNA In

I sold Celgene (Ticker: CELG) today at $55.06 generating a net profit of 13.09% (purchased on 10/26/06 at $48.58). This is a great company with great growth, but it’s just too pricey for me right now. It’s trading at 14X next year sales and any disappointment; it’s over. Their recent guidance for 07 was a bit disappointing and the shares sold off. At that time, I didn’t think it was a big deal and thought the stock would recover, but the chart doesn’t look so hot right now. If you take a look at the weekly chart, it wants to head back down to its 50 day moving average. So I used to proceeds from the Celgene sale and purchased more Genentech (Ticker: DNA) at $88.99. I think this is the year for the big cap biotechs and Genentech should lead the charge.

Survey Says...

Here’s an interesting survey from the JP Morgan Healthcare Conference. This is a synopsis from the January 15th issue of BioCentury. They surveyed the audience of ~1,000 people (mostly working for hedge funds) and asked them what they thought will be the best performing big cap biotech stock in 2007. The results were:

(1) Genentech – Well not exactly a big surprise.
(2) Gilead – Hmm… A little high in the ranking; I thought.
(3) Amgen and Celgene – Tied for #3.

Here are my pick for the top performing big cap biotechs for 2007:

(1) Genentech – A no brainer.
(2) Celgene – A bit pricey, but they just have too much momentum right now.
(3) Amgen – Really depends if they can hold off Roche.
(4) Genzyme – No one really talks about this one, but I think it can really surprise people.
(4) Gilead – Tied for #4 with Genzyme. They have a solid HIV franchise and a little bonus with their flu drug.

Note: I have positions in Genentech, Celgene, Amgen and Genzyme.

A Cheap Book?

I just finished reading The Little Book of Value Investing by Christopher Browne. This book pleasantly surprised me. As you can tell from the title, the author is a big proponent of value investing. It makes logical sense to buy something pennies on the dollar and sell when it approaches full value. It sounds easy, but it’s really not that simple. I’ve read plenty of value investing books, but have not tried picking value stocks. I may experiment a bit and start investing in a few value stocks. But deep inside, I’m a diehard proponent of growth stocks.

I Need Some Clothes

I really like J. Crew (Ticker: JCG); their clothes and stock. The end of the stock lock up was holding the shares down a bit, but it looks like the selling from the lockup is just about over. Texas Pacific Group will be unloading 7.5 million shares of J. Crew Group. Once this takes place, this stock is going to take off. The company recently reported strong same store sales of 8.5% for the last two months of 06. This company has the best retail management team with Mickey Drexler as CEO. Again, I made a mistake of selling this stock last year. I’m not going to make the same mistake again and will hold on tight! The stock to starting to bounce off of its 50 day moving average.

Genentech = $$$ in DNA

Genentech (Ticker: DNA) delivered great results once again. They generated Q4 sales of $2.7 billion and earnings per share of $0.61, which easily beat analyst estimates. The company also raised guidance for 07. As I look through the earnings report, I can’t find anything I don’t like. It was a very strong quarter. I’m sure there will be some analyst nick picking some parts of the earnings report. All I can say is that this company is cheap, cheap, cheap! Trading at a forward 30 P/E multiple!? Come on…

Have you checked out the other big cap biotechs? So far lots of positive news. Genzyme (Ticker: GENZ) reported strong preliminary Q4 sales numbers and guided up for 07. Celgene (Ticker: CELG) also delivered strong Q4 numbers, but toned it down a bit for 07. Celgene’s sell off yesterday was a big mistake. I would buy Celgene on any pullback. The big cap biotechs are setting themselves up for a strong year.

Back in Apple

When Steve Jobs said: “We're going to make some history together today”, you just knew it was going to be something big. You know what I’m referring to… the Apple iPhone. I’ve had reservations about an Apple iPhone, but I have to say I was very impressed. It was nothing like the early version of the iTune phones from Motorola (Ticker: MOT). The iPhone is full of bells and whistles, yet it's very clean and simple. Damn, I want one! Oh by the way, I picked up a few shares of Apple (Ticker: AAPL) at $91.30.

Best Trade in 2006

Looking back at 2006, the best trade I made was in Vertex Pharmaceuticals (Ticker: VRTX). I purchased Vertex in October at $36.90 based on good phase II data on their hepatitis C drug. In December I decided to sell at $44.33 because it approached my target price. This was totally pure luck selling near the top. Looking at the stock decline right now; it looks very tempting to buy, but something doesn’t look right. Money losing companies are strictly for short term trades. You go in and get out once it hits your target. Don’t be greedy with these companies or else…

Big Healthcare Conference

Next week is going to be a big big week for biotech investors. It’s the JP Morgan Annual Healthcare Conference. There’s going to be lots of market moving news. Many companies will preannounce Q4 earnings and give earnings guidance. Look for Genzyme (Ticker: GENZ) to pre announce Q4 earnings and give 07 guidance on Tuesday, January 9th. To register and listen to the presentations, click: here. So far, I like the action of the big cap biotechs.

First Transactions for 2007

Yesterday, I made a couple of transactions. I sold my remaining position in Goldman Sachs (Ticker: GS) @ $200.83 generating a net gain of 14.66%. I used the proceeds from the sale to purchase J.Crew (Ticker: JCG) at $38.50 and added to Sears Holdings (Ticker: SHLD) at $169.51.

Goldman Sachs will probably go higher, but I just see more risk at this point. All the i-banks are doing great right now, but it’s a feast or famine business. I just see more potential at this point with J. Crew and Sears Holding. Time will tell…

Boring Money

Like many out there, I also play the 0% credit card transfer game. I use the interest free money from the credit card offers and dump it into an online bank such as HSBC (currently yielding ~5%). I really wish I can get more aggressive playing this game, but I have to watch my credit score since I’ll be closing on my condo at the end of this year. Anyways, Marketwatch.com has finally discovered this game. Here’s their write up on playing with interest free money from the credit cards (click: here).