My YTD Gain/Loss statement is re-set to $0 and it’s time to start looking at the trades ahead for 2014! There are quite a few stocks I have my eye on over the next year, ranging from spec plays at new companies, to tried and tested retail giants. This is not at all a complete list, but for the sake of not boring you I’ll talk about four on my watch list.
I’ve already written about my love of the 3D printing space. I think it still has tremendous growth potential, both for industrial printer and even personal printers. I like DDD because it has solid traction in both spaces, and has proven itself to be the leader in the industry. Although I don’t think it has as much upside potential as some other 3D printing plays, it seems to be the safest bet for solid growth and returns.
3D systems continues to stand out from its peers from a financial metrics perspective. It has the highest annual revenue at $460M and its operating margin is a full 7% higher than its next competitor’s at 18.7%. The P/E ratio is a bit high at 209 but it’s not so high for a growth stock when you consider Amazon’s P/E is 1385 and Netflix’s is 300.
ONVO is another stock I’ve written about previously. Like I said, I think bio-medical uses for 3D printing is one of the most exciting aspects of the industry, and ONVO is one of the bio-printing leaders. They’ve already proven they can successfully print liver assays, which pharmaceutical companies can use to test whether their drugs damage the liver before human trials. Down the line it has even higher aspirations, even eventually printing organs. The stock already quadrupled in the past year.
Granted, this stock is a bit of a spec play. If it’s successful in being the first company to market lab-created human tissue, it could be worth a lot. However, it hasn’t proven this success yet and has yet post a profit. Analysts think the true products will debut closer to December 2014, so I’m buying some now and keeping a closer eye out later in the year. I’ve also noticed the stock tends to pop up and then sell off, so I’m planning to get in around the $8-10 range, rather than the pops to $12-13 it’s been seeing in the end of 2013.
Amazon needs no introduction. It’s a retail juggernaut that sells everything from books to TVs to vitamins. What I like about Amazon is that it is continuously expanding and innovating. We saw it first with the Kindle and now there’s AmazonFresh grocery delivery starting on the West Coast and Amazon produced original TV content in super high definition. Amazon’s poised to continue its takeover of internet shopping, reading, groceries, and more.
Like ONVO, BioMarin is a medical spec play. BMRN specializes in enzyme-replacement therapies to treat rare genetic diseases. BMRN benefits from “orphan drug” laws in both the U.S. and Europe, which allows it to operate with minimal competition and grants financial perks like tax breaks. BioMarin is quickly becoming a leader in the orphan drug game, with four approved therapies already.
The drawback to orphan drugs is that they treat very rare diseases, meaning the market for them is not huge. However, even with few people to sell to these drugs can be very profitable. Sanofi’s enzyme-replacement therapy for Pompe disease generated sales of over $400M in 2012, even though Pompe disease only affects 10,000 people worldwide. How is this possible? Sanofi’s drug costs an average of $300,000 per dose (and you can assume BMRN’s enzyme-replacment drug will be priced similarly). BMRN’s new enzyme-replacement therapy drug, Vimizim, is up for FDA approval on Feb. 28th.
I’m not saying you should rush out and buy these tomorrow, but I’ll be keeping my eye on all of these stocks over the year. They could prove interesting.
Check out the stocks others are watching for 2014:
MSN Top 10 2014 Stocks (Tesla, Trulia)
DailyFinance 2014 Stocks for Beginners (Altria, Google, Apple)
Goldman Sachs: These Stocks Could Pop in Early 2014 (Short term plays for Target, Ford)