It is hard to believe it is already November here in 2015 and the holidays are fast approaching. This is especially true for this ex-New Yorker as it is still 85 degrees down here in sunny Miami – I don’t think I will ever get used to Christmas lights on palm trees. However, with Christmas coming up fast it is time to think about some stocking stuffers from the market. These are overlooked and attractive stocks that sell for less than $7.00 or so a share and can fit easily within your portfolio. Here are a few that are on the top of my shopping list at the moment.
Let’s start with Pernix Therapeutics (NASDAQ: PTX), a small specialty pharmaceutical concern with a market capitalization of approximately $200 million and whose stock goes for just over $3.50 a share currently in the market. The stock has been caught like most others in the sector by the fallout from the collapse of Valeant Pharmaceuticals (NYSE: VRX) under allegations of drug price “gouging.” Pernix sold for north of $10.00 a share earlier in the year.
The company also made a significant purchase of an extended abuse-resistant painkiller called Zohydro earlier this year which is taking time to integrate into its portfolio, sales force and get on the “approval” list for HMO’s and PBM’s for 2016. Pernix is marching towards just better than breakeven earnings in FY2015 after a third quarter that blew both the top and bottom line consensus.
However, now that its sales force has been cross-trained and Zohydro will now be available to some 250 million people domestically in 2016 through these HMOs and PBMs, Pernix is poised for significant growth in the New Year. The consensus has Pernix earning some 60 cents a share in FY2016 on a 30% increase in revenues. At around six times those earnings, the stock is too cheap at current levels.
Next up is Agenus (NASDAQ: AGEN) which got caught up in the recent bear market within the biotech sector this summer and has yet to recover. The company recently sold off its royalty stream from an adjuvant it developed that is going to be used for a variety of vaccines coming to market for some $115 million. It was a solid strategic move to raise capital to invest in its potentially much more lucrative developmental work around its checkpoint inhibitor technology without having to dilute shareholders.
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