Opko Health Is What the Doctor Ordered

NEW YORK (TheStreet) -- Value investors do it buying stocks they think have a greater intrinsic value than what they are trading at today.

Momentum investors do it buying stocks that are in uptrends and hanging with them as long as they remain in that uptrend.

Technicians believe that a chart says it all.

There is every kind of investing style out there and yet I believe in combining all of these tools into one big grade and comparing against all the other stocks out there.

My style of investing combines performance, valuation, technical analysis and also knowing where the big picture of the market is at any given time.

The big picture of the market right now continues to favor American, small and midcap stocks and, in particular, stocks that are medical or pharmaceutical related.

Opko Health ( OPK) is one such stock that fits this bill and it is currently ranked the number one stock by my Best Stocks Now! app.

Opko is a $3.7 billion midcap company headquartered in Miami that develops a broad range of pharmaceutical products, diagnostic tests and vaccines.

Already we know this stock has got a lot going for it; it's in the right geographic area (U.S), the right asset class (mid-cap) and the right sector (medical) of the market.

Performance/Momentum: So what about performance? Let's take a look at my Best Stocks Now! app to see how this stock has performed over the years.

Over the last 10 years, even though it has been a bumpy ride, Opko has delivered an average annual return of 36.7% per year while the market delivered 5% per year during the same timeframe.

Over the last five years, again, this stock has been all over the place but overall it has delivered an average of 58.7% to investors while the market has averaged returns of only 11.4%.

Over the last three years, the pace has quickened, and the stock's performance has accelerated. Opko's performance has gotten even better with returns of 69.5% per year all the while the market delivered 13% per year. Over the last 12 months while market is up 19.7%, Opko is up a whopping 182%!

This stock gets a momentum grade and performance grade of A+; there are not many stocks that get an A+ performance or momentum grade right now. This is a rare bird.

That being said, remember that this is a smaller stock. Smaller stocks carry greater risk. For this reason, I'm a big proponent of owning 25 to 35 stocks in your portfolio that fit your risk profile.

Valuation

Next let's take a look at the valuation of Opko. This is difficult to do right now because the company is still losing money. In fact, Opko is expected to lose 17 cents per share this year.

However, when I look at the company's sales growth over the last four quarters, I see growth in sales up between 73% and 133% from quarter to quarter.

It would be pretty hard to carry on a trajectory like that of sales growth and not eventually crossover the line into profitability. I think that with Opko's products and pipeline it has ample upside potential going forward.

Stock Chart: Lastly, we have to take a look at the stock chart. Opko's chart was dead in the water from March until August but then it started taking off. And it's been taking off ever since.

I bought Opko and I think you can see why as it has the numbers to back it up; it fits my style of investing. Now it is a member of my aggressive growth portfolio. Out of 3,575 stocks, Opko comes in as the number-one-ranked stock in my Best Stocks Now! app.

Are there guarantees in the market? No. But can you do your best to try to put probability on your side? Yes.

At the time of publication the author had no position in any of the stocks mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

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