Earnings season has kicked into high-gear, which led this week to the only reaction investors are familiar with of late -- bullish buying with reckless abandonment. For bulls, these rallies may seem like a dream come true. For skeptics like me, they’re opportunities to see whether companies trading near their 52-week highs really deserve their current valuations.
Keep in mind that some companies deserve their lofty prices. Buffalo Wild Wings
Pharmasset … what assets?
Pharmasset is significantly trailing its rivals in getting its drug to market. As Motley Fool’s pipeline guru Brian Orelli pointed out a month ago, Merck
Blind auction anyone?
You know you’re stuck in an episode of the twilight zone when Federal Mogul
Flash-forwarding back to reality, bidders interested in the auto parts supplier that sports a back-breaking $2.8 billion in debt include private-equity firms Carlyle Group and Apollo Global Management. But many other potential buyers have been scared off by the rise in shares. Shareholders have likely squeezed every last bit of value out of this company in the past few weeks, and it’s seeming increasingly unlikely that a deal would even go through with Federal Mogul at such an inflated valuation. Next please…
Who ordered the box of pre-packaged fail?
Don’t look now, but Weight Watchers International
Options activity on the stock also has to be worrisome, with put action far outpacing calls recently. Bets are being made on the company’s future, and the consensus appears to be that its share price is currently overweight.
What’s your take on these stocks? Are they sells or belles? Share your thoughts in the comments section below and consider tracking Pharmasset, Federal Mogul, and Weight Watchers International as well as your own personalized portfolio of stocks with My Watchlist.
Fool contributor Sean Williams has no material interest in any companies mentioned in this article. He would like to remind you not to forget about our friends in Japan who could still use a helping hand. You can follow him on CAPS under the screen name TMFUltraLong. Buffalo Wild Wings is a Motley Fool Hidden Gems selection. Vertex Pharmaceuticals is a Motley Fool Rule Breakers choice. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy that never needs to be sold short.