As evidenced by the stock market’s losses on Thursday and again today, we’re still stuck firmly in the middle of a difficult market.
But while that might make ordinary investors pack their bags and head for the hills, we’ve always maintained that there are still quality companies worth evaluating and (shock!) even stocks still worth buying.
Take Tesoro (NYSE: TSO), for example. We’ve officially hit a 100% gain on our shares in the refining giant, which we recommended in the December Xcelerated Profits Report issue.
And there could be more to come. The company will release its quarterly earnings on February 19 – and has already announced that its numbers should beat the consensus estimate. Remember, we’ve raised our sell-stop on the position to $15 to ensure we take a big gain on this position in case the market or shares move against us.
But that’s not the only sector producing gains…
Big Profits On Tap From This Big Apple Firm
This morning, our biotech specialist Marc Lichtenfeld issued a sell on one of his Access Research recommendations, booking gains of 65% in just a few months. Of course, results like that are nothing new for Marc. Xcelerated Profits Report readers grabbed two sets of profits on his BioMarin Pharmaceutical (Nasdaq: BMRN) pick – to the tune of 99% and 63%, respectively.
Right now, Marc is awaiting results from the final stage of clinical trials from a small company based in New York. They could come in any day now and if they’re anything like the positive results from the previous trials for this device, the stock could make a massive move higher.
You see, even in this downtrodden market, biotechs have the ability to rally sharply if the conditions are right. And the best news is that you’re not an Access member, you still have a chance you can get in on this stock. To set your mind at ease, we offer a 60-day, money back guarantee, so check Access out and we’ll rush you the information right away.
Over to Marc with more healthcare and biotech news…
Roche “Downs” The Ante
Today, Roche made a new buyout bid for Genentech (NYSE: DNA). But in the latest twist to this drawn-out affair, it actually decreased the offer – from $89 a share to $86. Those Roche guys have some nerve, considering Genentech has already rejected the $89 bid. The $86 offer represents a mere 6% premium to Thursday’s closing price.
My belief is that Genentech management might be stalling on the deal until April. That’s because the company is expecting some key data on how its Avastin drug affects colon cancer. Obviously, if the results are positive, both the drug and Genentech will be worth that much more.
In the end, we believe Roche will acquire Genentech for at least its original asking price of $89… if not more. Either way, this biotech leader is worth owning, so it remains in our portfolio.
I’ll See You Those Earnings Estimates… And Raise The Guidance
On Thursday evening, Accuray (Nasdaq: ARAY) reported better than expected quarterly results and raised its earnings guidance for 2009.
Although macroeconomic pressures have forced the company to take several orders out of its backlog, the results vindicate our long-held belief that despite the executive team’s missteps, its CyberKnife cancer-fighting technology is very real and very successful. So we’re pleasantly surprised to see that management performed well during the last three months of 2008.
If better decision-making starts flowing from the executive suite, Accuray should become the big winner we envisioned when we bought the stock. Wall Street is certainly bullish at the moment, with the stock up 23% today.
Here’s Jim Stanton with some tech talk…
January Flashes By… But What Does February Have In Store For The Market?
“As January goes, so goes the rest of the year.”
So says the old Wall Street adage anyway. And while the saying does have some statistical relevance, it’s not worth pushing the panic button just yet, because it certainly isn’t a hard and fast rule.
At the moment, the past three months are important. The S&P 500 reached its low in November 2008 and then staged a nice rally before topping out on January 6. Since then, however, the index has remained stuck in a downtrend, although it’s at least managed to hold important support in the 805-815 area.
But if this week’s trading is any indication of future performance, that run might be about to come to an abrupt end and it could break that support level. If that happens, the next downside target is around 777, which is within 36 points of the November 2008 lows.
While there’s a decent chance that the 777 area will hold, I’ll have to reassess the market again if/when the S&P closes below 800. Don’t be surprised if you see it consolidate between the November lows and January highs for a while.
If you’re trading the long side, be careful. With the market seemingly rooted in a downtrend for the time being, trade lighter positions and take profits when you have them until new daily buy signals are triggered.
We wrap up with some commodities news, courtesy of Lee Lowell…
Commodities Sector Taking Its Cues From The News
Crude oil continues to trade in a very wide range, with the weekly supply numbers serving as a key catalyst.
For the time being, it looks like the market has hit a temporary support level at $40 a barrel, with $50 capping every rally. Until it can break out of that $10 range, it could be status quo here. But the longer-term future should produce some more downward movement.
As I’ve mentioned in my Triple-Zone Profit Trader alerts, the metals market continues to be the main winner from the ever-volatile stock market. As we watch stocks drift lower, gold and silver have moved steadily higher.
With gold prices having cruised past $900 an ounce, and silver breaching the $12 per ounce mark – levels we haven’t seen since last October – I believe they’ve both still got room to run.
That’s all for today. Have a great weekend and we’ll see you in February.
Karim
