Drink In These 5 Top Stocks

Whether it's the corporate lunchroom, your cubicle, or the local watering hole after work, there are regular places we gather to discuss news, sports or -- if you're like us -- stocks. Here at Motley Fool CAPS, we gather around the virtual water cooler daily to rate stocks and delve into their merits as investments.

Our 140,000-strong CAPS community -- where members give the thumbs-up or thumbs-down to some 5,300 stocks -- has sought out the businesses it thinks will outperform the market. Below, we'll take a look at some of the top stocks in the CAPS universe that are getting the most buzz, and consider whether they’ll continue their winning ways.

Stock

CAPS Rating (out of 5)

No. of Calls

Outperform Calls

Blockbuster (NYSE: BBI  )

*

1,388

48%

Celgene (Nasdaq: CELG  )

****

1,376

95%

Dendreon (Nasdaq: DNDN  )

**

1,388

79%

LDK Solar (NYSE: LDK  )

***

1,413

92%

Taseko Mines (NYSE: TGB  )

****

1,341

97%

A tall drink of water
There's no doubt that Dendreon has been a monster stock for investors this year, rising close to 700% over the past six months. The question investors need to ask themselves is, how much further can it go? There are two key catalysts here that will determine the answer: FDA approval for prostate cancer therapy Provenge, and marketing the drug in Europe.

If (perhaps when) the FDA gives Dendreon the green light, Provenge will turn into a monster treatment, just as the stock has become a monster stock. The biotech's CFO recently said that he doubts the company will have the capacity to meet the initial demand for the drug upon approval, and that it is fully anticipating building additional manufacturing facilities to meet the need.

Between 40% and 65% of patients suffering from prostate cancer that has spread to other parts of the body seek out chemotherapy, a physically demanding treatment. Since Provenge has been shown to extend life longer than standard treatments without the nasty side effects, Dendreon expects the drug to surpass chemo as the go-to therapy. According to market researchers, the prostate-cancer drug market will grow by $2 billion through 2018, primarily as a result of Provenge. One study suggests that more than half of oncologists surveyed will prescribe Provenge to their patients with asymptomatic hormone refractory metastatic prostate cancer.

Internationally, analysts are speculating as to which pharmaceutical will ultimately be the one to pair up with Dendreon. sanofi-aventis (NYSE: SNY  ) would be a natural, because its Taxotere is currently the sought-out therapy, and the gains Provenge will make are seen as coming at its expense. Dendreon says it's in "active discussions" with potential partners. It doesn't give any hints as to who those partners might be, but one analyst speculates GlaxoSmithKline or even Bristol-Myers Squibb (NYSE: BMY  ) are possibilities.

Although CAPS member boyceh66 likes the biopharma, he worries about Dendreon's long-term staying power because of the costs associated with its treatment relative to the benefits received:

One must be skittish about long-term hold with DNDN, though, because they want insurance companies to pay about $60,000 per patient after it gets past the FDA and available in the USA market - to only give each patient a few extra months of life before dying. Because there are MANY drugs and treatments that aim to delay death from various cancers by only a few months, and they (almost) all cost tens of thousands per patient, you have to consider Obama and the insurance companies teaming up and targeting this area as a primary cause of PREDICTED/FUTURE healthcare cost growth. They will try to find a way to cut out insurance coverage for these kinds of very expensive treatments. Big ethical debate on the horizon, don't you think?

Miner for a heart of gold?
After getting tarnished in the commodities collapse last year, copper is seeing its luster restored, rising to more than $2.80 a pound in recent trading. Taseko Mines is ramping up preparations for production at its Prosperity mine, which is just awaiting regulatory approval; there, it has an estimated 2 billion pounds of copper waiting to be dug. That's led some smart Fools to speculate that it makes for an attractive acquisition target, as a buyer might want to gain access to the 4.7 million ounces of gold Prosperity also holds.

CAPS member MellowCat notes that Taseko was successful even in the throes of the market's turmoil and should take off with any recovery:

Profitable copper miner even in early 2009 with tremendous potential as copper prices increase. If the new BC mine is approved will then they have a large gold deposit to mine and stock can be expected to really take off.

Gather 'round
With so many good opinions about today's top companies, why not grab a pointy paper cup from the dispenser and join us at the Motley Fool CAPS water cooler, where your input can help guide other investors to stocks with bright prospects for growth? Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made, all from a stock's CAPS page.

Sign up today for the completely free service and let us hear what you have to say about the great -- and almost great -- companies that interest you.

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Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.


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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On September 04, 2009, at 9:42 AM, jayray78 wrote:

    In regards to the comment from the CAPS member boyceh66, his arguement is completely invalid. The standard of care for advanced stage prostate cancer is Taxotere. Dendreon has been very smart about the pricing for Provenge. It is projected to be comparable in cost, making the doctors the lead decision maker, not the insurance companies. It's fairly easy to say that most doctors would prescribe a treatment that extends life with less side effects at a comparable cost. It's a no brainer.

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