NEW YORK (
TheStreet) -- I know you all remember Herman Cain and his 9-9-9 plan. Well, I want you all to remember my 10-10-10 plan to find stocks that are worthy to be in your long-term growth portfolio. In addition to my three 10-10-10 points, I'll add two more criteria:
Criteria for a growth stock:
Projections of 10% revenue growth
Estimates of 10% earnings growth
Analysts expect a 10% total return
Balance sheet of B+ or better
Current upward price momentum
What if you can't find such a stock? Then, don't waste your money.
Today I found a nice pharmaceutical stock that fits my criteria:
, Questcor provides drugs for the treatment of multiple sclerosis, nephrotic syndrome and infantile spasms indications. It's primary offering is H.P. Acthar Gel, an injectable drug. It also offers Doral for the treatment of insomnia. Acthar is sold primarily to specialty pharmacies and Doral to wholesalers.
In the last 20 trading sessions the stock is up about 12% and continues to climb. Review the hourly trading chart provided by Barchart and you'll see what I mean:
During the last six months while the market as measured by the Value Line Index is almost flat, QCOR was up around 10%:
Factors to Consider:
Barchart technical indicators
100% Barchart technical buy signal
Trend Spotter buy signal
Above its 20-, 50- and 100-day moving averages
Seven new highs and up 11.77% in the last month
Relative Strength Index 63.95%
Barchart computes a technical support level at 44.30
Recently traded at 45.96 with a 50-day moving average of 41.54
The stock already has a Wall Street following where nine brokerage firms have assigned analysts to run the numbers
Analysts project revenue will grow by 93.90% this year and another 31.30% next year
Estimates of earnings increases are 91.30% this year, an additional 37.40% next year and to continue to increase annually by the rate of 38.75% for at least 5 years out
These consensus estimates resulted in analysts issuing 7 strong buy, 2 buy and no under perform or sell recommendations
If the numbers materialize investors can expect an annual total return in the 18% - 24% range
The company enjoys a B++ financial strength rating
The company has a blockbuster drug in Acthar Gel which has been approved for the treatment of over 19 different diseases
The R&D budget is being applied to clinical trials that may prove the gel can also treat 40 other diseases effectively
The readers of TheStreet have given this issue their A- rating
Firms that have the stock on their over weight list are Landenburg and Oppenheimer
Columnists with positive comments were Wayne Rogers and Jim Cramer
: The proof of the pudding is as always the market itself and although the competition has had nice numbers, look at the chart below. During the last year
(AMGN - Get Report)
was up 17%,
(VRTX - Get Report)
was up 19% and
was up 7% while Questcor soared up 90%:
Amgen has a
rating of A-, with revenue projected up 5.60% this year and 3.10% next year. Its earnings are estimated to be up 15.20% this year and 10.60% next year.
Vertex as a
rating of C, with revenue to be up 35.8% this year and 6% next year. Earnings are expected to be up 1,700.00% this year and 2.8% next year
Repligen also has a
rating of C. Analysts aren't willing to make projections on revenue and earnings but guess revenue might be up 84.1% next year.
: I think Questcor has what is needed to be included in a growth portfolio. It has double-digit projections for increases in revenue, earnings and total return. The balance sheet is solid and the stock has had recent price appreciation. Nothing is forever in the stock market so if you buy, please monitor the moving averages and the 14-day turtle channel:
This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
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