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Despite all of Wall Street's conflict and contention, a fortunate few companies enjoy unanimous support among professional analysts. If the market's movers and shakers all believe these companies will beat the long-term averages, well, surely they will -- right?
Not so fast! With help from the 180,000 members of Motley Fool CAPS, we'll see whether these high-flying favorites deserve analysts' unwavering support.
CAPS Rating (out of 5)
CAPS Bullish Sentiment
No. Wall Street Analysts
52-Week Price Change
|Antares Pharma (NYSE: AIS )||***||93%||1||59%|
|CF Industries (NYSE: CF )||*****||96%||15||8%|
|Westport Innovations (Nasdaq: WPRT )||*****||98%||6||60%|
Source: Motley Fool CAPS.
As you can see, there's a wide range of results, so just because Wall Street loves 'em doesn't mean you have to. Use the list as a jumping-off place for your own research.
Not in the mood
Things had been looking up for Antares Pharma until yesterday, when BioSante Pharmaceuticals (Nasdaq: BPAX ) revealed that its sexual dysfunction drug LibiGel did no better than a placebo in raising the libido of women. Since BioSante uses a gel provided by Antares, both stocks dropped in trading after the news.
While there may be some sense to punishing BioSante's stock, it seems nonsensical to give Antares the same treatment, since it derives most of its revenues from selling reusable needle-free injector devices to Teva Pharmaceuticals (NYSE: TEVA ) and Ferring. Last quarter, it reported that sales jumped more than 25% on the strength of its product sales, which comprises 56% of total revenue. Its development revenue more than doubled, much of which came from a new agreement with Watson Pharmaceuticals. The monies it gets from BioSante in licensing are relatively negligible and were down significantly from last year. So for Antares to lose 30% of its market cap in trading Thursday is ludicrous.
Highly rated CAPS All-Star zzlangerhans isn't very excited about Antares's lineup of product offerings, but I think the sell-off was overwrought, so I'm maintaining the outperform rating for it on CAPS. But tell me in the comments section below or on the Antares Pharma CAPS page whether you think the stock will do better in the future, and then add it to your watchlist to see how it pans out.
Seeds of doubt
While shares of fertilizer producer CF Industries remained in positive territory for the year, more recent results haven't been as fruitful. It's down more than 25% since early September as corn prices plunged amid weak demand.
Like Terra Nitrogen, in which CF has a majority stake, and CVR Partners (NYSE: UAN ) , CF's business will rise and fall with the price of corn and other commodities because nitrogen is such a key fertilizer component for crops. Yet CF has fared worse than either of them because it also transports ammonia from its Donaldsonville facility to the U.S. corn belt.
CAPS All-Star TMFGalagan (the Fool's own Dan Caplinger) thinks all the hand-wringing going on over reduced fertilizer demand is blown out of proportion.
Fears of reduction in fertilizer demand seem short-sighted. Need for food isn't going away anytime soon, and despite the potential for short-term cyclical drops, the long-range prospects here look very good. Especially like exposure to 75%-owned Terra Nitrogen.
What a gas!
The outperform rating I bestowed on CAPS for Westport Innovations three years ago remains my single best call in the CAPS community. Its natural-gas-burning engines have caught on with heavy equipment manufacturers like Caterpillar as well as more conventional automakers like Ford and GM.
Natural gas makes the most sense in reducing this country's dependence on foreign sources of fossil fuels. Its availability and low cost just needs the right catalyst to propel it to the forefront, at which time Westport will seize on the opportunity to benefit.
What holds it back at the moment is not having the financial wherewithal to create those catalysts itself. It needs to rely upon Clean Energy Fuels (Nasdaq: CLNE ) to build out a nationwide network of refueling stations. It needs Royal Dutch Shell to help market the value proposition natural gas offers.
Although its losses have widened of late, CAPS member RallyCry sees it reaching breakeven sooner rather than later.
Can we define earnings growth without earnings? Sure, lets look at how quickly they will break even. I think this happens in 2013 so lets buy!
Let us know in the comments section below if you think profitability is in Westport's immediate future, then track the results by adding it to your watchlist.
Agree to disagree
It pays to start your own research on these stocks on Motley Fool CAPS. 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 tell us whether these stocks deserve to have Wall Street marching in lockstep.