Barron's(2/7) Medical Marvel
Feb 5 at 00:09
By Bill Alpert
(From BARRON'S)
For years, Questcor Pharmaceuticals lost money making Acthar, a drug for
desperately ill babies. Then in 2007, it found a success strategy. It raised
Acthar's price from $1,650 a vial to $23,000, and has been solidly
profitable ever since. Its stock (ticker: QCOR), quoted below 40 cents in
2007, hit a record $16.40 in January, on hopes for added sales of Acthar to
patients with multiple sclerosis or kidney disease.
But the one-drug company, whose stock-market value has soared to nearly
$1 billion, will see its profits vanish this year on prescriptions covered by
Medicaid managed-care programs. The villain: a provision of the big federal
health-care overhaul that gives the Medicaid plans a 100% rebate on Acthar's
sales price. Questcor has set aside reserves for those liabilities, but not
enough, says Mark Roberts, an analyst who's spotted many an overpriced stock at
his Off Wall Street Consulting Group research boutique in Cambridge, Mass. "They
are way under-reserved," he contends.
Barron's(2/7) Dupont: A Feast For Investors
Feb 5 at 00:09
By Erin Arvedlund
(From BARRON'S)
Dupont, the chemicals giant, has a knack for changing with the times. It
produced gunpowder for the Civil War, paint for early automobiles and Teflon and
Corian for modern kitchens. Now comes food for a hungry world.
Last month, Wilmington, Del.-based DuPont (ticker: DD) bid $6.3 billion
for Denmark's Danisco (DCO.Denmark), one of the largest producers of food
ingredients. Assuming Danisco shareholders approve the deal, which seems likely,
DuPont soon will derivemore than a third of its approximately $30 billion in
annual revenue from seeds, agricultural products and nutritional additives.
Think of it as a 21st-century protein play: DuPont could energize its profits,
and its shares, for years to come.
The push into food-related businesses is the signature move of CEO Ellen
Kullman, who took the reins in 2009. DuPont is already a force in genetically
modified seeds, and the acquisition of Danisco will push it further along the
food chain. Danisco makes probiotics for yogurt, and locust bean gum for ice
cream, cream cheese and infant formula. Its products do everything from keeping
bread fresh to helping people lose weight.
Barron's(2/7) Seeking Stability In The Sands
Feb 5 at 00:08
By Andrew Bary
(From BARRON'S)
The turmoil in Egypt highlight the Mideast's volatility and the allure of
Canada's oil sands, the vast crude reserves in Alberta, second in size only to
Saudi Arabia's.
The oil-sands operators now look especially attractive, given high
petroleum prices -- $90 barrel in the U.S. and $100 in Europe. Commodity
bulls may want some exposure because the oil sands are in a politically safe
nation and offer reserve lives of 50 to 100 years.
There are many investment plays, ranging from notables Suncor (ticker: SU)
and Canadian Natural Resources (CNQ) to lesser-knownCanadian Oil Sands (COSWF),
Cenovus (CVE), and Imperial Oil (IMO). And there are more speculative
development plays traded mainly in Canada, including Athabasca Oil Sands (
ATH.Canada) and MEG Energy (MEG.Canada).
These stocks trade at higher multiples of earnings and cash flow than
international oils and American exploration outfits, such as Apache (APA), but
they're probably worth that premium, thanks to their hefty reserves.
Additionally, many oil-sands producers aim to significantly raise their output
by 2020 -- the entire region now produces more than one million barrels per day.
That's a big plus at a time when the energy majors are struggling to boost
production.
Barron's(2/7) A Return Visit To Earlier Stories: Good News
From The Gorilla
Feb 5 at 00:06
By Jack Willoughby
(From BARRON'S)
The 500-pound gorilla is making his presence felt at Corning.
Shares of the upstate New York company (ticker: GLW), whose products
include fiberoptic cable and glass for liquid-crystal displays used in computer
and smartphone touch-screens, have gained 21% since the start of the year. The
advance, most of which has come in the past two weeks, has pushed the stock
above 23.
The catalyst: a strong earnings report last month, aided by a robust
outlook for scratch-resistant Gorilla Glass, a product well-suited for iPhones,
iPads and their proliferating rivals.
And, as Barron's noted late in 2010 ("Corning's Winning App for the iPad,"
Dec. 13), the company has several promising technologies, including photovoltaic
glass, that are making it far more diversified than it was when it bet too
heavily on the fiberoptic-cable market before the Internet-buildout slowdown.
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