I have come across these with some decent
catalysts while reading various publications. Might be worthwhile for
readers to look into:
PRXL - Potential Long – This s a mid-cap
company which is into clinical research. Large number of firms have become
budget conscious. Gets 75% revenue from clinical trials; is one of the two or
three strategic partners to drugmakers such as Eli Lilly, Pfizer, Merck and Glaxo. Most of big drug makers face
major patent expiration. Parexel earned lot of revenue from late stage clinical
trial studies with phase 3 & 4 constituting the bulk of the revenue.
Additionally, PRXL also offers consulting services and clinical trial technology.
Firm also has global network, which is a huge asset with 70 locations in 51
countries. Also provide advance technology tools including medical imaging to
facilititate clinical development process. The industry estimates that the firm
will see growth in revenue and earnings of 25% + over the next 2 years. Also
recently launched unit to work with mid-size bio pharma companies, which
constitute most of the ongoing development programs.
.
EXAS – Potential Long - Has developed a sophisticated colon-cancer
screening test based on DNA markers. EXAS hopes that its self-administered
stool test can detect 85% of cancers and more than half of pre-cancerous
growths, with a false-positive rate of only 10%, much better than existing
test, which detects an estimated 65% of cancers and fewer than 25% of
precancerous growths. Trial results, expected in early 2013, if favorable, FDA
approval within a year - 2014. Revenue can $500M - $1B by the end of this
decade. EXAS is trying to arrange for Medicare and private insurers to pay for
it. Potential takeover takeover target by a larger health-care outfit. Centers
for Medicare and Medicaid Services, agree to pay for the tests soon after a
favorable FDA ruling. 80M Americans 50 or older. If 30% of them take the test
every three years, thats 8M tests a year at perhaps $300 a test, translating to
$1.2B in revenue or almost $4 a share, but unlikely before 2020.
A note on playing China – Lot of people is still
invested in Chinese real estate. For those who don’t know, there has been a
decent slowdown in numbers and the returns might not be phenomenal to say the
least. However, I believe, that over he longer and medium term, one of the
better play to play china is the Chinese investment in infrastructure and one
of the beneficiaries of this will be the firms that are in the transportation
sector. And I believe one of the best was to play transportation is Chinese
Railway sector. Those who can invest in China, I have come across few names
– CSR Corp (Largest producer of
locomotives. Also produces wagons, carriages, ect. Another is China Railway Construction Corp (largest railway construction
company). Zhuzhou CSR Times Electric
(supplier of train borne electrical systems and components). Other names being,
Daqin Railways and Guangshen Railways.
