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. 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.
Today's watchlist is a special short-sellers edition.
Holy moley, has it been a run to remember for Uni-Pixel, whose shares have risen from as low as $5.27 in mid-October to a closing high of $27.80 as of yesterday. The most interesting part of Uni-Pixel's ascent is that it hasn't turned in a profit yet, with revenue of only $76,200 in the entirety of 2012.
That changed, however, with the launch of its UniBoss and Diamond Guard flexible electronic products, which it markets for the touch-panel sensor, cover-glass replacement, and protective film-cover segments. Uni-Pixel exploded higher after announcing both a multimillion-dollar deal with an unnamed PC maker to supply its UniBoss touchscreen film, as well as struck a collaborative deal with Texas Instruments (NASDAQ:TXN) last month to develop touchscreen solutions that would be compatible with TI's chips.
But investors may be getting a bit ahead of themselves here. Although Uni-Pixel's story sounds grand, it also hasn't made its UniBoss platform on a large scale before, meaning it's going to be trial and error galore as its rapidly tries to expand its production line. Let's also keep in mind that it isn't as if Uni-Pixel is the only player in this space as well. Its unwillingness to reveal its PC-making partner coupled with its recent history of losses as it developed its new technologies leaves me highly skeptical of its current rally.
I hope you're sitting down, because what I have to tell you may shock you: Orbitz shares have nearly doubled in just the past month! At first that might not be hard to believe, considering how strong travel agency companies have performed globally, until you take a closer look at Orbitz's bottom-line figures.
Orbitz reported its fourth-quarter results on Valentine's Day, surprising the Street with a gigantic goodwill and impairment charge of $321.2 million, or an adjusted profit of $0.06, excluding the charge. That still wasn't enough to top expectations that had called for Orbitz to earn $0.07 and marked yet another disappointment for the online travel booking company. Yet shares have soared as revenue topped estimates and Orbitz itself predicted a rebound in North American travel bookings. As for me, I think this is a perfect opportunity to bet against Orbitz.
Even though I'm a regular Orbitz customer, Orbitz has little to no exposure outside North America. Compare that with priceline.com (NASDAQ:BKNG), which reported just two weeks later that $5.5 billion of its $6.6 billion in gross bookings was generated outside the United States. That's truly phenomenal and demonstrates the global reach of the Priceline name, even with austerity measures in place throughout much of Europe. With consumers battening down the hatches as more taxes get taken out of their paychecks, I simply don't see how Orbitz, which is intricately tied to the domestic booking market, is going to continue this momentum.
Hyperion Therapeutics (NASDAQ:HPTX)
Sorry, Hyperion shareholders, but the allure of urea cycle disorder drug Ravicti wore off on me quite a while ago.
It was an interesting road to approval for Hyperion, which soared on word that the Food and Drug Administration needed more time to work on "labeling and post-marketing requirements" in late January for Ravicti. Just two weeks after its original PDUFA date, the FDA approved Ravicti and its share price rallied even more. Now, Hyperion has practically doubled from where it was before the Ravicti news, yet peak sales estimates of the drug haven't changed a bit.
I admit it's a bit difficult to get a good gauge on Ravicti's long-term potential, because Hyperion hasn't even commented on what it expects out of the drug. However, the few analyst estimates that do exist point toward peak sales in the urea cycle disorder market of around $100 million. With Hyperion closing yesterday at a valuation of $392 million, investors have placed a multiple on the stock of nearly four times peak sales -- clearly too much, in my opinion. Assuming Ravicti launches flawlessly, perhaps this valuation will stick around for a few more months, but I see this as a sub-$20 stock unless something else comes out of the pipeline.
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 with each company:
Fool contributor Sean Williams has no material interest in any companies mentioned in this article. He's a total nerd when it comes to making lists. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.
The Motley Fool owns shares of, and recommends, priceline.com. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.