I follow quite a lot of companies, 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 see what's really moving the market. Even worse, I'd be lost when the time came to choose which stock I'm buying or shorting next.
Today is Watchlist Wednesday, so I'm discussing 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 that 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.
Micron Technology (NASDAQ:MU)
Is it me, or is there a memory glut every time I turn around? Last week, Micron CEO Mark Durcan noted that PC chip prices for memory are lower and suffering from a short-term glut in supply. While temporary, this cycle downturn reminds us that DRAM and NAND memory suppliers are prone to regular tech cycle swings as their products become increasingly commoditized.
However, Micron has a new weapon to help break it free from the pangs of commoditization: its purchase of the now-defunct Elpida Memory. The transaction is expected to close in the first-half of 2013 and will add Apple (NASDAQ:AAPL) as a major client, as Elpida is a memory component supplier for Apple's smartphones and tablets. In addition, the price Micron paid to acquire Elpida ($750 million plus $1.75 billion in installments through 2019 to Elpida's creditors) was an absolute steal and will make Micron the second-largest DRAM maker behind Samsung.Priced at a mere 75% of book value and expected to be profitable once again in 2013, I'd say Micron is firmly planted on my radar.
ImmunoGen, the company behind the targeted antibody payload technology, is creeping back onto my buy radar.
Earlier this month, ImmunoGen and its developing partner Roche released the final data associated with its late-stage trial of Trastuzumab Emtansine, or T-DM1, for the treatment of metastatic HER2-positive breast cancer. The findings indicated a 32% reduction in risk of death and increased median survival rates by 5.8 months to 30.9 months from 25.1 months as compared to those who received Tykerb plus Xeloda.
The exciting characteristic about this new TAP technology is that it targets specific proteins produced by cancer cells and should drastically reduce the number of healthy cells being affected by the use of chemotherapy toxins. Seattle Genetics (NASDAQ:SGEN), whose technology is referred to as "antibody-drug conjugates" and works in the exact same way, also has multiple ongoing clinical trials that have shown promise.
The short story here is that both ImmunoGen and Seattle Genetics have very few competitors and could be leading the charge in introducing the next wave of curative deliveries. ImmunoGen, however, has backed nicely off its 52-week high and looks poised for long-term success.
Chances are good you already have Google on your radar, so consider this your official call to add it your daily Watchlist.
If you recall, I've come out with one of the few pessimistic views on Google in recent weeks, disagreeing even with my Foolish cohorts Alex Planes and Travis Hoium in our weekly analyst debate. At the heart of my bearish point of view is a decline in Google's cost-per-click business, a lack of transparency regarding the plans it has for its Motorola Mobility purchase, and the relative infancy of the mobile ad market which Google has yet to truly lay claim to. Now I feel we can add yet another factor to that: tepid consumer spending.
Although consumer spending isn't in the dumps like it was in the recession, spending is trickling along at one-year lows. This could cause advertisers and small businesses, which make up the bulk of new clients for Google, to hold off for a while. Google's run higher has been almost unstoppable since summer began, yet the fundamentals and its recent earnings history don't suggest confidence heading into the fourth quarter -- at least to me. I've got my eyes squarely on Google puts.
Is my bullishness or bearishness misplaced? Share your thoughts in the comments section below and consider following my cue by using these links to add these companies to your free, personalized watchlist to keep up on the latest news on each company:
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