The Dow Jones Industrial Average fell 102 points, starting off the week on the wrong foot as European fiscal concerns and further proof of a Chinese economy cooling off worried everyone from the start. But with the companies below going down hard, first let's see whether they had good reason to drop. Sometimes, panic-fueled declines can make excellent buying opportunities.
You've made your bed, now lie in it
Certain areas of medical research are almost faddish in the way biotechs and drugmakers swarm into them. A few years ago, cancer research was the hot funding area; these days it's hepatitis C as companies suddenly piled into the niche at the end of last year. Roche bought Anadys, Gilead Sciences
Wall Street, which had been unanimous in its opinion of Achillion beating the market, is now rewriting its outlook on the shares, with JPMorgan Securities downgrading the biotech to a "market perform" from an "outperform" rating.
While three-quarters of the CAPS community members rating Achillion think it will still outperform, I wonder whether some larger pharma might not just come along and scoop it up anyway. Its treatment is obviously effective, so someone might be interested in building on that success. With shares now trading at almost half the value of their recent highs, it might be an attractive takeover candidate, so I'm going to rate the biotech to outperform from here.
Projecting a poor image
There was a time when I thought Microvision
Microvision has been flogging the deal with the electronics gadgets company for over a year and reported yesterday that a product is due out later this year. Yet while sales were up in the quarter, losses aren't getting any smaller, and the company recently had to affect a reverse split to stay listed on the exchanges. It's hoping the next-generation display engine technology gets it the recognition -- and the revenues -- it needs. But in a competitive landscape where it faces well-financed rivals like Texas Instruments
Acer unveiled its pico projector earlier this year and it's now on the market; Samsung's Galaxy Beam is likely to be the first smartphone with an international market that features its own built-in pico projector.
I can't see Microvision overcoming the obstacles before it, and its best bet is probably a buyout too. I've rated the projector maker with a pico-sized underperform rating on CAPS, but tell me in the comments section below or on the Microvision CAPS page if you think it's still got an outsize opportunity, then add the stock to the Fool's free portfolio tracker to be alerted if anything pops up on the screen.
Ready for a resurrection
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Fool contributor Rich Duprey holds no position in any company mentioned. Click here to see his holdings and a short bio. Motley Fool newsletter services have recommended buying shares of Gilead Sciences. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.