This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Biostar: Best Small-Cap Pharma Stock

Biostar Pharmaceuticals (BSPM - Get Report) has recently applied for a Nasdaq listing and could be a double or triple once it trades on the Nasdaq.

If you happened to have perfect timing during the worst financial crisis since the great depression and bought shares of Bristol Meyers (BMY - Get Report) you would now be up by 50%, and that is with the stock currently trading near a 52-week high. That is the absolute best you could do. Shares of Lilly (LLY - Get Report), Pfizer (PFE) and Merck (MRK - Get Report) delivered near identical returns.

Had you simply bought the Dow, you would be up by more than that 60%, and in fact if you had simply thrown darts at a board to pick your stocks you would likely have made a greater return. The fact of the matter is that big cap pharma is safe and boring and doesn't go up or down. It is nearly impossible to earn a significant return. As a result, I avoid putting money into big-cap pharma because it is too stable. For the opposite reason, I avoid putting money into biotech stocks. Money losing biotech stocks more resemble a trip to the casino than they do an investment decision.

So what is the best way to play if you want to be invested in the healthcare and pharma space? The answer is small-cap, profitable fast growing drug makers and service providers in the pharma space.

Take for example Wuxi Pharmaceuticals (WX - Get Report). The stock is up by nearly 400% from its lows last year, despite the fact that it was always highly profitable as well as having a strong balance sheet and positive cash flow. The stock traded below $4 and now trades above $15. The point is that you can find multi-bagger returns from stocks that have a very safe profile but you have to find them yourself because by the time they are making headlines the bargain will certainly have passed.

The big question is now that the worst of the financial crisis seems to be behind us, are there still buying opportunities that can provide upside of several hundred percent? The answer is yes, but they are hard to find.

1 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
MRK $57.60 0.00%
LLY $73.44 0.00%
BMY $65.00 0.00%
WX $37.28 0.00%
BSPM $1.22 0.00%

Markets

DOW 17,678.23 -40.31 -0.23%
S&P 500 2,056.15 -4.90 -0.24%
NASDAQ 4,863.3620 -13.1570 -0.27%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs