Five Stocks to Keep an Eye On

Have these promising stocks hit bottom yet?

Published: March 19th 2011
in Economics » World

Tel Aviv stocks are plunging
Pic: Guy Raivitz

A heavy storm


"When it's raining we all get wet", so goes the saying often used by investors, meaning that when the atmosphere is negative and the markets are falling, even good stocks fall amid panic, "weak hands" and an urge to sell at any price before things get worse. 


The recent riots in the Arab world, especially the continuing fighting in Libya and the Bahrain confrontations brought gray clouds over the markets. The devastating earthquake in Japan and the failure of the Fukoshima nuclear power plants have created thunderstorms.


Some stocks "got wet", and below we’re going to analyze five of them. All stocks mentioned are traded both in North American markets and in the Tel-Aviv stock exchange (TASE).


For certain investors, some of the stocks below could be a great opportunity, as they are as low as they’ve been in the last 52 weeks. For others, the fear of a further fall will still keep them away. Where do you sit?


Stock 1 – "Teva" Pharmaceutical


NASDAQ symbol – TEVA


TASE symbol – TEVA


Trading Range in 52 weeks - $46.99 - $64.95


Last trading - $47.89


One year target price - $64


Optional upside from current price: 33.6 per-cents


Why buy "Teva" – It’s the largest generic drug company in the world. Its balance sheets are perfect and the earnings are growing as we speak. The company intends to multiple its sales by 2015 and it is on its way there. Current P/E is low and an upside is only a matter of time.


Why not buy "Teva" – The previous quarter reports were disappointing. The company operates in a very competitive environment. The Copaxone, which is responsible for 30 per cent of the company's earnings, will lose exclusiveness by 2014. Future sales targets, though very ambitious, are highly uncertainty.


Stock 2 – "Protalix" BioTherapeutics


AMEX symbol – PLX




Trading Range in 52 weeks - $6.10 - $10.40


Last trading - $5.83


One year target price: $8-9


Optional upside from current price: 45.8 per-cents


Why buy "PLX" – Though its Gaucher disease drug was not approved by the FDA, the company will probably receive the FDA approval in the near future. The company is supported by Pfizer and faces a bright future. When the Gaucher disease drug is approved, PLX will rapidly surge. The recent plunge of over 30 per cent in PLX prices is a great "buy" opportunity.


Why not buy "PLX" – It's uncertain if and when PLX will receive the FDA approval for marketing the Gaucher disease drug. In the near future PLX will have only expenses and almost no income. It may need to raise funds from the public via issuing more stocks and/or bonds. Both are negative for the stock's price.


Stock No. 3 – Tower Semiconductors


NASDAQ symbol – TSEM


TASE symbol – TOWER


Trading Range in 52 weeks - $1.15 - $1.75


Last trading - $1.23


One year target price - $1.8-4.0


Optional upside from current price: 46-325 per-cents


Why buy "TSEM" – After thirteen years of high loses the company is on the right track and had positive profits of $1 million in the last two quarters. It has nearly $200 million in cash and it sales in 2010 were over $500 million.


Why not buy "TSEM" – The company's debts to Israeli banks are nearly $250 million. If the debts will be converted to shares as a form of payments, the investors will bear heavy losses and TSEM may crash and could be traded for cents.


Stock No. 4 – Orckit Communications


NASDAQ symbol – ORCT


TASE symbol – ORCKIT


Trading Range in 52 weeks - $2.18 - $5.61


Last trading - $2.78


One year target price - $3.5-4.6


Optional upside from current price: 26-65.5 per-cents


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