The following article is part of The Motley Fool's "Stock Madness 2005," a contest based loosely on the annual NCAA College Basketball Tournament, a.k.a. March Madness. From March 17 to April 4, our writers and analysts will engage in head-to-head competition with each other, advocating and arguing on behalf of 64 stocks we've selected as among the most interesting to Foolish investors. You, dear readers, are the fans and referees -- you'll read these exciting duels and then vote for the stock you think is the better investment... and should therefore move on to the next round of play. The company that survives six "games" will be our tournament champion, and its writer our most valuable "coach."

But, please, make no mistake -- "Stock Madness 2005" is a GAME!

Our writers are doing this for fun. They are enjoying the spirit of competition and the art of debate. They are delighting in the search for positives in the companies they've drawn.and negatives in the companies they're pitted against. They are NOT necessarily recommending these stocks as the ones they believe in above all others. As ever, YOU must decide whether the stocks we're writing about -- winners and losers -- are deserving of your investment dollars.

Protein Design Labs (NASDAQ:PDLI)
Fremont, Calif.
52-week low-high: $13.79-$27.58
$1.7 billion market cap

By Charly Travers (TMFBreakerCharly)

That day trader's playground known as Taser may be the high-profile growth stock of the past year, but in the long run, biotech up-and-comer Protein Design Labs is going to be the superior investment.

I'm not going to counter Taser's growth story with a boring ball-control strategy. I'm taking the "run and gun" route. If it's growth you want, Protein Design Labs is the company for you. Last year's revenue was up 44% over the previous year, and this year promises to be even better, with the top line more than doubling thanks to a recent acquisition that brought in three marketed drugs.

Despite being a small drug company, Protein Design Labs is the total package. It's a leader in antibody humanization technology (a process that makes mouse antibodies look like human ones), and the company's intellectual-property position over the technology means that it gets lucrative royalties from some of the top companies in the industry, including Genentech (NYSE:DNA) and MedImmune (NASDAQ:MEDI). This, along with its own drug portfolio, gives the company a broadly diversified revenue stream.

I'm a forward-looking investor, and with Protein Design Labs, I'd say the best is yet to come. It has a potential blockbuster waiting in late-stage clinical trials -- a drug called Nuvion, intended for the treatment of severe ulcerative colitis and also being tested in patients with Crohn's disease. I expect that this drug will launch the company to the top tier by the end of the decade. I'll put that kind of promise up against the one-trick stun-gun pony any day.

Fool contributor Charly Travers owns shares of Protein Design Labs.

Taser International (NASDAQ:TASR)
Scottsdale , Ariz.
52-week low-high: $11.88-$33.45
$755 million market cap

By Marko Djuranovic

Ever been Tasered? Me neither, and I intend to keep it that way. I wouldn't want to get zapped with 50,000 volts of electricity from as many as 20 feet away. That's a powerful deterrent indeed. But on the off chance that the police ever have to subdue me or I need to defend myself against a criminal, I'd prefer a Taser device to a gun, a nightstick, or the sheer force of fists. Apparently, the rest of America agrees. A recent Zogby International poll found public support for use of Taser devices to stand at a whopping 77%.

Currently, the stock trades at a forward price-to-earnings ratio of "just" 42. That's two and a half times more than the market average, but when you couple it with 105% annual growth for the past five years and no meaningful competition, such a high multiple is actually a good deal. Though the growth has slowed down to "only" an 80% year-over-year increase for the latest quarter, I'd still gladly pay the current price tag. So would David Gardner, who recommended the stock in his Rule Breakers newsletter last year.

Investors who follow the academic definition of risk as volatility will surely look askance at Taser International. But a significant portion of the real risk is alleviated if you ignore the price swings and don't sell on the dips, and if you consider the company's balance sheet and income statement, which show $35 million in cash, no debt, and a 28% profit margin.

Finally, let's consider Protein Design Labs' profit margin. It's, um, well. not there. This company has yet to make money! Define risk as you like, but I'll take Taser International any day of the week over a profitless biotech that derives 90% of its royalty revenues from a single product (Genentech's Herceptin) and whose main drug in the pipeline (Nuvion) is still awaiting approval of the Food and Drug Administration. That probably won't happen until sometime in 2006.

Marko Djuranovic owns shares of Taser International and no other companies mentioned in this article.

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