The Early Investor Bird Does Catch the Worm

by Hilary Kramer | March 23, 2013 9:06 am

When I look for investment opportunities, I am drawn to some of the world’s most innovative companies – the ones revolutionizing the way we live and thrive. It’s a “win-win” to invest in companies producing these game-changing breakthroughs because they not only improve our lives, but they deliver handsome profits for savvy investors who get in at the right time.

Back in January, I was asked which sector would do best under President Obama’s second term. My answer was healthcare, because with the road to broader insurance being inevitable, and the potential for 30 million uninsured to be covered next year, the healthcare sector would take off.

Because of this trend, I knew that it was the perfect time to invest in biotech breakthroughs and healthcare stocks, which is why I put my money into Lannett (NYSE:LCI[1]), Vascular Solutions (NASDAQ:VASC[2]), and Cantel Medical Group (NYSE:CMN[3]). And because I got in early, I locked in profits in all three stocks.

Lannett develops, makes, and sells generic drugs. The company operates in an industry poised to flourish under health care reform; it has regained strong operational momentum; a number of new products that should drive future growth await FDA approval; and the stock is a bargain. The election provided a nice tailwind for the company, which was already growing steadily. Because of all these factors, I locked in a 59% profit last month.

Vascular Solutions  is an innovator in the field of cardiovascular medical intervention devices, has a strong history of developing products that meet unmet needs, and stands to benefit from the growth of the entire industry. VASC is nearly 15 years old and has introduced 37 devices since its founding in 1997. What’s interesting is that 16 of those devices (43%) were launched in 2009 or later, so you can see the company is hitting its stride. After the stock’s strong run, I sold it for a 17% profit.

Cantel Medical Group  is a company dedicated to infection prevention and control. CMN might not be flashy, but they sure do know how to get the job done right. Their products address an important health need by helping hospitals and health care offices reduce the risk of infection. Because of the demand for CMN’s products, business has boomed. I pocketed a quick 20% profits on this one!

I don’t know if you missed out on these hidden gems (I hope you didn’t!), but if so, I’ve got two more investment opportunities that you can take advantage of right now:

Intercept Pharmaceuticals (NASDAQ:ICPT[4]) focuses on the development and commercialization of treatments for chronic liver disease. It’s most advanced programs are focused on the development of modified bile acids that can regulate key aspects of liver functionality through receptors.

Its leading product candidate, obeticholic acid (OCA), has been developed to treat primary biliary cirrhosis (PBC), which is a rare and chronic autoimmune liver disease that, if inadequately treated, may eventually lead to cirrhosis, liver failure and death. ICPT is UP 10% so far this year, and I think the best is still yet to come.

MEI Pharma (NASDAQ:MEIP[5]) is a San Diego-based oncology pharmaceutical company that develops novel drug therapies for cancer suppression. The company is currently focused on three lead drug candidates, each of which is in the midst of clinical trials. Continued positive results from these studies could make MEIP worth more than $200 million – double its current market cap.

This is a typically small pharmaceutical research company with a market capitalization of only $90 million. Given the nature of MEI’s business, its trial results and drug development are more important to the stock’s movement than its financial background. Those in the industry and analysts covering oncology stocks have agreed that MEIP shows promise based on the results that have been released so far, and I am in full agreement. These promising results have rewarded investors with a nice 17% return so far this year, and I don’t see things slowing down any time soon.

  1. LCI:
  2. VASC:
  3. CMN:
  4. ICPT:
  5. MEIP:

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