Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

3 Stocks to Get on Your Watchlist: NPS Pharmaceuticals, Inc. (NPSP) and More

Page 1 of 2

I follow quite a lot of companies, so the usefulness of a watchlist to me cannot be overstated. Without my watchlist, I’d be unable to keep up on my favorite sectors and see what’s really moving the market. Even worse, I’d be lost when the time came to choose which stock I’m buying or shorting next.

Today is Watchlist Wednesday, so I’m discussing three companies that have crossed my radar in the past week — and at what point I may consider taking action on these calls with my own money. Keep in mind that these aren’t concrete buy or sell recommendations, nor do I guarantee I’ll take action on the companies being discussed weekly. What I can promise is that you can follow my real-life transactions through my profile and that I, like everyone else here at The Motley Fool, will continue to hold the integrity of our disclosure policy in the highest regard.

NPS Pharmaceuticals, Inc. (NASDAQ:NPSP)Angie’s List Inc (NASDAQ:ANGI)
It doesn’t matter which angle you view Angie’s List’s surprising fourth-quarter profit from; the stock is among the most overpriced on Wall Street.

Angie’s List shocked Wall Street last week with revenue growth of 68% over the previous year and an even more amazing 24% drop in cost-per-customer acquired. While this is undoubtedly a step in the right direction, an Investor’s Business Daily summary of the quarterly report that I came across comically and succinctly summed up Angie’s List’s entire history in a sentence: “That was its first quarterly profit in at least four years, and probably ever. It’s never made a profit for a year.”

According to the Indianapolis Business Journal, this was actually Angie’s first quarterly profit… ever! Angie’s List has expanded without regard for spending or profits for much of its existence and has racked up a frightening $219 million in accumulated deficits since inception. What’s more, its business model, which relies on users to pay to read business reviews that businesses don’t have access to, is extremely susceptible to economic downturns. It’s taken 17 years just to get to a point where its customer acquisition costs are even low enough to justify the possibility of turning a profit, and the economy has been on the mend for nearly four years now. I almost have to wonder what utopian dream world we’d need to be in for Angie’s List to succeed. Consider this stock a prime short-selling candidate at something on the order of 80 times forward earnings — if it can turn an annual profit, that is!

NPS Pharmaceuticals, Inc. (NASDAQ:NPSP)
It appears that the partygoers celebrating NPS’ first FDA-approved drug, Gattex, for short bowel syndrome, may have overstayed their welcome. Since NPS received approval for Gattex on Dec. 21, shares have fallen 12%. Now, however, could be the perfect time to go bargain-hunting for a number of key reasons.

The first reason is Gattex’s orphan drug designation, which gives it exclusive status and extends its patents for a long enough time frame that NPS has a chance to set up its marketing and pricing without fear of being overwhelmed by competitors.

The second point is that while orphan drugs often carry hefty price tags (Gattex’s $295,000 annual price is enough to make most people cringe), Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN)‘ rare blood disorder drug, Soliris, the most expensive drug in the world at an annual cost of $400,000, has sold phenomenally. Alexion’s Soliris has set the precedent for other orphan drugs and made it easier for rare disease patients to get the insurance they need to get treated as well as given physicians the confidence to prescribe these rare therapies.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!