We usually don’t share our best ideas publicly. In our quarterly newsletter we share 15 ideas and in our monthly newsletters we share 1 or 2 ideas. It isn’t like we make dozens of recommendations every day. In our December newsletter we shared Michael Castor’s best idea at that moment: Furiex Pharma (FURX). You probably don’t know who Michael Castor is. We do. Michael Castor is 2013′s best hedge fund manager. Please read our article to see how Michael Castor has been pulling one rabbit after another from his hat. He recommended 8 stocks for us throughout 2013 and six of those stocks returned more than 100% in under a year. We track a lot of hedge funds and we have never seen anything like this before.
On January 25th we published the January issue of our monthly newsletter. Here is what Castor said about Furiex in that newsletter:
FURX remains a good pick. There is a change – they earn a royalty on a diabetes drug sold by Takeda. The launch has been slower than I expected. I had initially thought that royalty stream to be worth $30 or so. I now think it is worth about $22. I continue to think the chance of success of eluxadoline is about 65% and that the value of the company with good clinical data is about $75. Mathematically, (65%)*($75) + (35%)*($22) = ~$56, so I like the stock at these levels, but it is high risk and has ~50% downside potential.
He was a little bit lucky but this is what investing is. You make calculated bets where the odds are on your side. If your assessments are accurate you should be able to outperform the market on average.
We said Michael Castor made 8 recommendations in 2013 and six of them at least doubled. His worst performing recommendation is Aratana (PETX). The stock was trading at $15 in September when he recommended it. Today, it is trading at $21, up 40%. Castor thinks the stock may reach $40 in about three years, so this is a long-term play. Check this stock out.
In 2014, Michael Castor recommended one stock. This is also a long-term stock pick which, he thinks, may triple or quadruple in 2-3 years. We already shared this stock with our newsletter subscribers and we will share this name publicly after it doubles. Michael Castor is the next great hedge fund manager; do yourself a favor and start tracking his moves.