Should You Follow This Investor Into His Biotech Picks?

After having initiated a stake in the company during the first quarter, and further increasing it in the second, Navellier reported ownership of 25,615 shares of AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG) as of the end of the third quarter, trimming the position by 226 shares during the period. Navellier’s bullishness may be somewhat shaken now, as the stock has lost 21% year-to-date, despite surging by 65% in the first half of the year. The company managed to significantly beat earnings estimates for several quarters until the second trimester of 2015, when it missed the estimates by $0.01, reporting EPS of $1.12. We can assume that the sell-off of AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG)’s stock in the third quarter was more caused by the overall market fears rather than actual concerns, since the company is one of the rare profitable biotechs and analysts have set a price target of over $109 on the stock, which is more than double what AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG)’s currently trades at.

In Sucampo Pharmaceuticals, Inc. (NASDAQ:SCMP), Navellier cut his position by 62% to 25,600 shares during the third quarter. Meanwhile, Sucampo Pharmaceuticals, Inc. (NASDAQ:SCMP)’s shares have advanced by 21% year-to-date, although excluding the decline from the last couple of months, the appreciation was much higher. Nevertheless, Sucampo Pharmaceuticals, Inc. (NASDAQ:SCMP)’s stock is relatively cheap, trading at around 29-times earnings, significantly below the industry average.

BioSpecifics Technologies Corp. (NASDAQ:BSTC) is the fifth biotech stock in Navellier’s equity portfolio, the fund disclosing ownership of 14,020 shares as of September 30, up by 45% on the quarter. The stock has advanced by 37% since the beginning of the year, after it embarked on an uptrend in May following the release of BioSpecifics Technologies Corp. (NASDAQ:BSTC)’s financial results, which showed a significant jump in results compares to the prior year quarter.

Disclosure: None