Sunday, May 3, 2015

"Sell in May and Go away. Some of the high flying stocks have already taken a good beat down and may present an entry point for a longer term investment. Egalet Corp.(EGLT), a young pharmaceutical company, which appears way oversold here, presents such an opportunity"

Dow Jones Industrial Average 18,080.14  (UP) Week ending 04/24/2015
Dow Jones Industrial Average 18,024.06  (Down) Week ending 05/01/2015

Legendary investor Warren Buffett advises to 'be fearful when others are greedy, and be greedy when others are fearful.' Well nothing strikes fear more with individual stock investors as knowing they are coming up on the dreaded month of May where the high roller investors tuck in their investments and head off to the Hampton's to start their summer vacationing. Some folks,, being clever knowing this is coming, will actually brilliantly start their May stock selling on April 15th after taxes are all wrapped up.

So by May 3rd, today, you can already find some good bargains to snap up for your portfolio going into next year. (You are not buying stocks to hold for 3 months and sell. That is not investing!)

"The secret to investing, just like the secret to comedy, is "Timing"" . To often us individual investors will have a great idea for buying a stock but will not wait to get it at a value price. What causes particular apprehension to us is that when a good stock goes down in price there is some associated short term dreadful news with it like " tattoos make the Apple I watch not work right", or a short term quarterly earnings miss because of the weather. 

One stock where the investors are well on their way to Cape May or Nantucket is

Egalet Corp.,(Symbol EGLT, $9.66)

This local company located near me in Wayne, PA. (near King of Prussia PA.) has had its stock price completely washed out in the last 2 months.

According to their website, "Egalet is a fully integrated specialty pharmaceutical company focused on developing effective medicines for patients with acute and chronic pain while helping to protect physicians, families, and communities from the burden of abuse."

The stock which has traded up to a high of $17.00, and currently has a target price of $18-$20 dollars, can be purchased right now for $9.66. Talk about being washed out.

This stock I would need to put in the "speculative" category because they currently have negative earnings, not unusual for a small young company. The company is very financially sound though with current assets of $55 million and current liabilities of only $7.4 million dollars. They also have some good people on board from the pain medicine industry. They are constantly upping their earnings on revision estimates, (so far to a lower loss), and they only have 17 Million shares outstanding.

Here is some good information from their website about their technology:

Egalet Guardian™ Technology

Abuse Deterrence Plus Precision Delivery
Egalet’s Guardian Technology was developed to provide peace of mind to physicians and patients by delivering commonly abused prescription medications in an abuse-deterrent form.

Abuse-Deterrent Features
Opioid analgesics developed using Guardian Technology are designed to deter common methods of abuse. Guardian Technology utilizes injection molding to create a hard matrix and shell that is designed to be difficult to crush, grind, chew, or dissolve and that turns to gel when exposed to water.

Precision Delivery

Guardian Technology is designed to deliver the active ingredient using a zero-order release profile (see Figure).1 This zero-order release profile is designed to deliver the active ingredient at a constant rate of release

Currently there are 4 Buy recommendations on the stock by wall street analysts. 43 Institutions own the stock and 77 Mutual funds, so you are not "out on a island" joining in and buying it.

I would be remiss if I did not mention the new album release from THE WATERBOYS called Modern Blues. I went to see them live at the Keswick Theatre locally and they put on an amazing  live concert. 

So I would buy the EGLT stock shares and The Waterboys CD or Vinyl album of Modern Blues and you will be very well invested.


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