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3 Biotech Stocks Where Momentum is Alive and Well

Take a swing for the fences with these three rising stars

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Emergent Bio Solutions

EMERGENT.biosolutions.logoIf you are into “big game” momentum-hunting in the biotech space, make sure to include small caps in your search. To the extent a smaller company scores an approval for a key drug in a monster market, the gains would likely mimic what we have seen with Intercept.

I discovered Emergent Bio Solutions (EBS) when I ran my proprietary P/E Gap model at the end of December. Without getting into the details, P/E Gap identifies stocks that have the potential to rally based on being significantly undervalued.

Analysts expect Emergent to grow profits by 50% in 2014. At current prices shares trade for 21 times 2014 estimated earnings. The company is engaged in the defense industry developing serums for dealing with bio and chemical warfare. With the new budget deal, increased spending by the government will likely result in Emergent exceeding current expectations. If so, this one catches fire for sure.

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