5 Picks for 2013
Michael is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Seems like everyone makes their predictions this time of year. Business publications, talking heads and fund managers spouting the next sure thing for the coming year. So what separates my picks from the rest? I own all five of my picks. I have put my money where my mouth is. Let me take you through each one.
Let us start with Amarin (NASDAQ: AMRN). Ever since they announced on Dec. 6 that they were raising non-equity financing to launch their product Vascepa early next year, the stock has gotten hammered. Greed baby, greed. A lot of people wanted a quick buy out from a large pharmaceutical and to cash out with a nice profit. It still could happen, but not until its new chemical entity status is resolved. So fear set in and the selling began. They have a viable product for the treatment of people with high triglyceride levels approved by the FDA. With a product like that, self launch or buy out it sounds like a winner to me.
Another company with FDA approval and the potential for having a blockbuster drug is Arena Pharmaceuticals (NASDAQ: ARNA). There is a lot of money that wants a big pharmaceutical to buy them and their weight loss drug Belviq out also. A quick internet search revealed that over 35% of Americans over the age of 20 are obese. According to the United States Department of Health and Human Services, that makes the number 78 million Americans. Seems to me the potential market in the United States is a very large one, to say the least. Belviq is cited as being a safer drug than its competition and is supposed to have a large marketing launch early next year.
Emerald Oil (NYSEMKT: EOX) is an independent oil exploration and production company in the Three Forks and Bakken shale oil formations. Voyager Oil actually bought Emerald but decided to keep and use the Emerald name. What I like about this company is they are a small player that is trying to grow into a much bigger player in the United States shale oil formations. I believe the stock will rise for several reasons. A bigger company may want to purchase them for their shale leases. If that doesn't happen they may just become a bigger player because of their willingness to be aggressive and build a larger company.
That is also why I like Abraxas Petroleum (NASDAQ: AXAS). According to their 2013 guidance, “Abraxas expects 2013 production to average between 4,900-5,200 BOEPD, which equates to approximately 21-28% growth over 2012. The company is also actively marketing numerous assets which it deems non-core, assets with a low working interest or assets with little associated production that are not reflected in this guidance.” I couldn't have said it any better myself. What is not to like about another small growing oil producer that offers both growth or take over prospects?
Last but not least is Heckmann (NYSE: NES). They are an environmental service company that recently merged with Power Fuels. What I like about Heckmann is that they are a water treatment company for gas and oil companies. With all the environmental concerns with hydraulic fracturing, they are positioned to take advantage of the need for recycled water in that process. What I don't like is their heavy debt load. If you look at their balance sheet I believe they carry too high of an amount of goodwill. All of this will be a moot point if they can achieve the high growth rate that is expected of them.
So there they are, my five picks for 2013. A balance of hope and risk....here is hoping your 2013 is a good one.
mwm102 has positions in all of the stocks mentioned above. The Motley Fool owns shares of Heckmann and has the following options: long JAN 2014 $4.00 calls on Heckmann and short JAN 2014 $3.00 puts on Heckmann. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!