What a week. The market gyrations are likely triggering strong
demand for heartburn medicine right now. Stocks of all stripes took
it on the chin, and many are now down for the year. Whiles
investors focused on the daunting headlines, they may have
overlooked some important news coming out of specific stocks. So it
helps to take a look back and point the spotlight once more on some
of the most compelling stocks from StreetAuthority's daily
"Winners" and "Losers" articles.
Martek Biosciences (Nasdaq: MATK)
As we pointed out this morning Martek Biosciences delivered a solid
fiscal second quarter after Thursday's close, and investors
responded in kind, pushing shares up +16.2% on a day when the major
indices fell -3% to -4%. Martek, a nutritional supplement maker,
looks set for solid growth simply on the basis of a recent flurry
of new contracts. But buried in the company's press release was an
item many investors may have overlooked. Martek's supplements,
which are already seeing strong demand in infant formulas, salad
dressings, and animal food, also could become a blockbuster product
in the geriatric market.
The company's fatty acids, which are made from algae, look very
promising in trials regarding memory retention and cardiovascular
health in senior citizens. The path to approval by the Food and
Drug Administration (
) could be pretty easy. After all, algae and fatty acids (also
known as Omega-3's) are widely used, and represent no known
toxicity issues. Martek is also pursuing a wide range of other uses
for its products, and is doing so on less than $40 million in
As free cash flow , and if it weren't for those R&D expenses,
free cash flow would be closer to $150 million. That's not bad for
a company valued at around $745 million with major growth
prospects. MATK today rose $3.12 to $22.37 a share.
athenahealth (Nasdaq: ATHN)
Investors in athenahealth have less to cheer about. As we noted,
the electronic records specialist just announced a key executive
was being replaced in hopes of reining in costs. But investors
should know that it's a lot easier to fix spending problems than
revenue problems. And right now, athenahealth has plenty of revenue
coming in the door. As health care reform starts to take hold, any
doctors who are still avoiding moving their records on-line will
have no choice but to join the electronic fray. That should help
save money for doctors, patients and insurers. And it should make
money for athenahealth.
As the actual impact of health care reform starts to take shape,
investors will once again flock to potential beneficiaries of this
far-reaching government initiative. And athenahealth is bound to
come up on many investors' wish lists. ATHN fell -8.7% Friday to
$23.72 per share, not far from the 52-week low of $23.29
established on Tuesday.
Exide Technologies (Nasdaq: XIDE)
Investors are often advised to hold off chasing a hot stock for a
few days, as traders will exit their positions, forcing the stock
to give back some of those gains. Friday's downdraft pushed shares
of battery maker Exide Technologies -1.7% lower on the day, to
$5.32 a share, and that may be the best you can hope for as an
The company's stellar earnings report on Wednesday evening won't be
overlooked for long. In coming days analysts are likely to sharply
boost their earnings forecasts, and shares trade for around five
times the likely revised 2010 profit forecast. This is never going
to be a high multiple stock, but even if it's worth eight or nine
times earnings, you're still looking at a potential +50% gain.
-- David Sterman
Disclosure: David Sterman does not own shares of any security
mentioned in this article.
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