Over the past 5 years, the single best sector to invest in has been in biotech. Big pharma has been desperately seeking to grow through acquisition, using their cash hordes to buy publicly traded r&d centers. More than that, they’re buying free cash flow, executing deals that are accretive to earnings. The latest takeout, SLXP, is just one of many that have been executed in recent years.
So who’s next?
For that, I did a simple search, scouring for companies doing over $100 million in revenues, free cash flow positive, growing revenues by more than 15%. Here is the short list.
DEPO
ACOR
ANIK
CBM
EBS
ENTA
INSY
LCI
PDLI
TECH
SGNT
ACET
CRL
Within the larger pharma names, here are my favorites to get taken over next.
JAZZ
MDVN
PCYC
TARO
QGEN
UTHR
That’s it. There’s a lot of chaff out there, names without revenues and earnings, pure speculative dice rolls. But there are only a few, with market caps under $20 billion, that are still independently traded. My favorites are JAZZ and MDVN, who are cash cows trading at reasonable valuations.
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H/T Thank you sir!
C’pn, you have any more thoughts on PACD?
Still long pacd, small size
$TA looking to build on yesterday’s move.
ta and musa are my fav gas station plays
Cst finna double son
Good Dr., where does SGEN fall in this spectrum? They are not cash flow positive, but earnings growth has been impressive. Most of all, the man the myth the legend, Randall J. Kirk is an investor, which carries a sizable amount of clout in and of itself. As always, I appreciate the response and insight.
How come the past comment was moderated? I kept it clean.
VSTM, HRTX
biotech is good but I came across RETL etf..insane gains . Retail is has as good returns as biotech, but with less headline risk (drug rejected, regulation, etc).
My Dearest Dr. Fly,
Did you say Yandex or Spandex is your third largest position? Knowing that a man of your charm, good looks and sardonic wit would never marry a woman of considerable girth, It must be Yandex. Are you still holding the Vodka powered search engine?
PCYC LOL nice timing Sr. Fly
McDonald’s is ripping tits….hairy fat man tits, but tits none the less.
I know it’s not cool to like McDonald’s anymore but I’m a big fan of their coffee