|MannKind (Nasdaq: MNKD )||**||(32.3%)|
|F5 Networks (Nasdaq: FFIV )||**||(21.4%)|
|Subaye (Nasdaq: SBAY )||***||(6.5%)|
Yesterday the market fell more than 100 points, only to rally back almost 200 points higher, before settling down essentially unchanged at the close. Yet stocks that went down even more are bigger deals.
The devil's in the details
Investors were aware the FDA could reject MannKind's inhaled insulin therapy, Afrezza, but with founder Alfred Mann buying up company shares ahead of the decision, it seemed there was some confidence it would get the nod.
Instead, the FDA threw the biotech for a loop by issuing a complete response letter that calls for MannKind to run more tests on the drug. While the company had already begun the trials, it creates a limbo for investors. Many are confused by the decision, since the agency didn't require additional tests in its last complete response notice, and analysts are of the mind that it wasn't so much that MannKind did anything wrong with Afrezza -- though it did update the delivery device – as it was that the FDA "moved the goalposts" on the company.
Yet it's also not unheard of for the FDA to request proof that new manufacturing processes are equivalent to what was achieved during the testing phase. Amylin Pharmaceuticals (Nasdaq: AMLN ) and Alkermes had to show Byetta was the same at a commercial scale as it was at the clinical trial stage.
As for Mann's stock purchases, it wasn't so much that they weren't a bullish indicator, but rather they were part of an agreement the company had with a lender. In exchange for a $350 million revolving loan agreement, lender Seaside 88 would buy MannKind stock at a discount, but Mann himself had to buy similar amounts.
While 82% of the CAPS members rating MannKind think it will ultimately win out, it's going to be a long slog until the new trials are completed. Let us know on the MannKind CAPS page whether investors long on this stock should exhale.
Delay is preferable to error
In the wake of F5 Networks' earnings miss, analysts have rushed to say the sell-off in the stock and the networking industry -- Rackspace (NYSE: RAX ) and Riverbed Technology (Nasdaq: RVBD ) dropped in sympathy -- was overdone. Revenues were actually at record levels, non-GAAP earnings doubled, and cash flows were strong.
Now if you look back at the shellacking Cisco (Nasdaq: CSCO ) took when it reported earnings, there was indeed a deeper sense that something was wrong. Durable-goods orders had fallen as computers and electronics dropped and communications equipment was down sharply.
But now, Census Bureau data show durable-goods orders were essentially flat from October to November, a big improvement over the prior period, with the Fed's Beige Book showing growth, though slow, across all regions. F5's situation is different from the one that faced Cisco, and it could be a very good time to reload. Highly rated CAPS All-Star nedliug thinks so, too:
I'm voting the technology here, numbers be damned. F5 makes an excellent product and is the clear market leader for load balancing technology. These are everywhere, and our reliance on this technology is growing.
You can follow along with its trials and tribulations by adding the stock to the Fool's free portfolio tracker.
Not so rarified air
For Chinese e-marketing firm Subaye, it's been a long week down. The stock is off more than 30% over the past five days with a 16% decline Wednesday. Lately it's been launching a number of services that seem more like latching onto the latest hot trends than a well-thought-out business model, including an online 3-D mall, where sellers and buyers have to pay for the privilege of shopping in three dimensions, and a Groupon-like service called Groupbuy.
CAPS member lumberst looks past such add-on services, preferring to concentrate on its core B2C business model:
Possibly a multibagger. looking for continued customer growth in their cloud computing services for small business clients. Not sure about the 3-D online mall idea, but if it doesn't work out the downside at the current share price is limited as long as they continue to grow their customer base.
You can tell us on the Subaye CAPS page what you think of its business moves.
Ready for a resurrection
Just because your stock has taken a beating doesn't mean it's going to roll over and die. Markets are known for overreacting. A closer look at what's happened to your stock can give you an edge over other investors who just react to the market's lead.
That's why it pays to start your own research on these stocks on Motley Fool CAPS where you can read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made, all from the stock's CAPS page. Then you can decide for yourself whether it's ready to come back from the dead.