What Do Tesla Motors Inc (TSLA) And Netflix, Inc. (NFLX) Have In Common?

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The other issue I have with Netflix, Inc. (NASDAQ:NFLX) is that it’s still in the process of transitioning away from traditional DVD sales to its streaming business. DVDs were a much higher-margin business, so it’ll take some time before margins truly stabilize.

With Netflix also dangerously close to 80 times forward earnings estimates and at 16 times book, I really don’t see how you can squeeze any more blood out of this turnip.

Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR)
Orphan drugs are certainly all the rage right now because they often treat rare conditions where little to no competition exists. Also, orphan drugs carry hefty price tags, often needed to recoup the expensive costs associated with researching and developing a drug.

The early approval of Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR)’s Juxtapid by the Food and Drug Administration to treat homozygous familial hypercholesterolemia certainly looked like it would give the company an early advantage over ISIS Pharmaceuticals, Inc. (NASDAQ:ISIS) and Sanofi SA (ADR) (NYSE:SNY)‘s Kynamro. However, Kynamro was also approved just a few short weeks late, with the duo undercutting Juxtapid in price by a significant margin. Sure, Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR)’s treatment comes in pill form while Kynamro is injected, but is this really worth a $100,000 annual difference in price? I’m inclined to think physicians and patients will say no.

There’s also the fact that ISIS Pharmaceuticals, Inc. (NASDAQ:ISIS) is working with a pharmaceutical giant in Sanofi SA (ADR) (NYSE:SNY) while Aegerion is going it alone with regard to commercializing Juxtapid. I’m not saying that’s a bad decision on Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR)’s part necessarily; but if you twisted my arm, I’d much rather have the experience of Sanofi on my side with regard to the marketing and production aspects of a brand-new drug.

Overall, Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR) shares have quadrupled from their lows over the past year despite the fact that it may only be break-even profitable by the end of next year. Ultimately I expect Kynamro to provide stiff competition in HoFH and feel Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR) is priced for perfection at these levels.

Foolish roundup
This week is all about redemption. I’ve been dead wrong about the aforementioned three stocks previously, but the thesis for why I disliked them in the first place still stands firm. Consider this my way of “doubling down” on my underperform CAPScall in these companies.

The article 3 Stocks Near 52-Week Highs Worth Selling originally appeared on Fool.com.

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.The Motley Fool owns shares of, and recommends, Amazon.com, Ford, Netflix, Tesla Motors, and Disney.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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