I follow quite a lot of companies -- some closer than others -- so the usefulness of a watchlist to me cannot be overstated. Without my watchlist, I'd be unable to keep up on my favorite sectors and what's really moving the market. Even worse, without my watchlist, I'd be lost when it came time to choose what stock I'm buying or shorting next.
What I intend to do as an experiment is to make today the first "Watchlist Wednesday," where I'll discuss three companies that have crossed my radar in the past week and at what point I may consider taking action on these calls with my own money. Keep in mind these aren't concrete buy or sell recommendations, nor do I guarantee I'll take action on the companies being discussed weekly. What I can promise is that you can follow my real-life transactions through my profile and that I, like everyone else here at The Motley Fool, will continue to hold the integrity of our disclosure policy in the highest regard.
Groupon (Nasdaq: GRPN)
I quickly added Groupon to my watchlist this week with the intention of shorting the stock or buying puts if the company rallied significantly past its first-day closing price of $26.11.
Much as I described in my "5 Reasons I'm Not Buying Groupon," I see very little longevity to the company's products and think consumers are easily swayed by deals at competing daily deal sites. Adding fuel to my argument are the ballooning losses at Groupon as it attempts to expand, all while its quarter-over-quarter growth rate slows dramatically. I'm personally thinking Groupon could make for a good short-sell heading into the lock-up period six months from now. Plans by insiders to sell shares clobbered both Molycorp (NYSE: MCP) and Tesla Motors (Nasdaq: TSLA) over the past year, and I strongly suspect the same will happen with Groupon.
Golden Star Resources (AMEX: GSS)
I already own shares of Golden Star Resources in my portfolio, and I'm strongly inclined to add more to my position. Like an idiot, I chose not to add when the stock dipped below $2 last month and, hindsight being 20-20, now I'm regretting that decision.
Golden Star has been an underwhelming company to own thus far. The high costs associated with mining and its inability to meet its own production forecasts has kept its stock price at bay. However, I strongly suspect the company is going to get its act together in 2012. Relative to nearly any other junior miner in the sector, Golden Star is dirt cheap at 1.3 times book and six times forward earnings. I will not be sitting on my hands again if Golden Star dips below $2.
Aeterna Zentaris (Nasdaq: AEZS)
Just in case you think I forgot about Aeterna Zentaris, think again! The stock has taken a 40% hit since May and still represents what I feel is one of the most undervalued pipelines in the business.
Sometime before mid-2012, I would expect to see the results of the company's phase 3 clinical trial for its leading cancer drug candidate, perifosine. Despite having outlicensed potential North American sales of the drug to Keryx Biopharmaceuticals (Nasdaq: KERX), Aeterna Zentaris could easily double on approval of the drug by the FDA. Even if the drug fails to impress the FDA, Aeterna has 10 other compounds currently in its pipeline. A $144 million market cap for 11 compounds under development is just too cheap to pass up. If this drops significantly below $1.50, I may consider buying in.
Is my bullishness or bearishness misplaced? Share your thoughts in the comments section below and consider taking my cue by adding these three companies to your free and personalized watchlist to keep up on the latest news with each company.
- Add Groupon to your watchlist.
- Add Golden Star Resources to your watchlist.
- Add Aeterna Zentaris to your watchlist.
