Two Best-Performing Top Picks of 2013
Up 178% in six months. That’s how well our best-performing Top Pick for 2013 has done so far this year. The winning stock was submitted to our annual Investment Digest Top Picks contest by Tom Bishop of BI Research. In his original recommendation, he argued that the company’s new scaffolding technology...
Up 178% in six months. That’s how well our best-performing Top Pick for 2013 has done so far this year.
The winning stock was submitted to our annual Investment Digest Top Picks contest by Tom Bishop of BI Research. In his original recommendation, he argued that the company’s new scaffolding technology for treating spinal cord injury could be revolutionary in treating and preventing paralysis. At the time, the company was petitioning the FDA for permission to go ahead with a human trial and for a humanitarian use exemption—which makes it easier to bring devices for currently untreatable conditions to market.
In the next six months, the company received the FDA okay on both counts, and it is now awaiting the final go-ahead on the trial. As Bishop predicted at the beginning of the year, the FDA news prompted a surge of investor interest in the company, and Investment Digest subscribers who acted on his Top Pick recommendation saw their holdings soar.
Now, the stock is correcting a bit from its new highs, and will probably stay quiet until the next piece of good news is released. Here’s Tom Bishop’s mid-year update on his Top Pick:
“This spring InVivo Therapeutics Holdings Corp. (NVIV) received the anticipated Humanitarian Use Device (HUD) designation from the FDA for its biopolymer scaffold device to be used to prevent paralysis in Spinal Cord Injury patients. And InVivo then promptly received approval (called an HDE) from the FDA to proceed with the clinical trial. However, first the Institutional Review Board must bless the trial protocol, and then the trial can finally begin. That’s where InVivo is now—awaiting that final go-ahead.
“I strongly re-recommended the shares with a page one feature in our 2/27/13 issue when the shares dipped to $1.75 and investors (with a lot of misconceptions) grew concerned about the delay in the two above-noted FDA approvals. But now investors are fully engaged and anticipating favorable results. Why? Well the company tested its technologies in over 40 paralyzed monkeys and all of them were running again within three weeks. And odds do seem heavily in our favor for some functional improvement in SCI patients because the correlation of these monkeys to humans is 98%-99%. Except for one important difference: humans can understand doctor’s orders, and monkeys can’t. We’re holding on tight.”—Tom Bishop, BI Research, www.biresearch.com, July 2013
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The second-best performing Top Pick so far is no slouch either. It was chosen by The Turnaround Letter Editor George Putnam, who won the gold medal last year for choosing 2012’s best-performing Top Pick, OfficeMax (OMX).
His Top Pick for 2013, MGIC Investment Corp. (MTG), has already surpassed OMX’s full-year gain from our last contest. As of today, the stock is 163% above where Putnam recommended it. Here’s his mid-year update on the stock’s current attractiveness:
“Our Top Pick for 2013, MGIC Investment Corp. (MTG), has performed very well over the first half of the year, but we believe that the mortgage insurer still has plenty of gain potential remaining. MGIC raised new capital in early March, which removed much of the risk of regulatory problems. The ongoing recovery in the housing market will continue to boost the company’s performance. The rise in home prices makes it less likely that homeowners with older policies from MGIC will default, and this reduces losses from pre-2008 business. In addition, an increase in home purchases provides the company with the opportunity to write more new business at very profitable rates. As a result, we expect MGIC to post improving results which should boost its stock price.”—George Putnam, The Turnaround Letter, www.turnaroundletter.com, July 2013
In years past, the best-performing Investment Digest Top Picks at mid-year have often gone on to notch further gains in the second half of the year and ended the year at the top of the rankings as well. You can read my explanation for why this might be, and see a chart of the phenomenon, in last year’s end-of-year rankings story here.
So should you buy NVIV and MTG here? You could certainly try that, especially with the pullback in NVIV. But a wiser course of action might be to subscribe to the Investment Digest, where we’ll track those two winners, and all the other Top Picks selections, for the rest of the year. Plus, next year, you might be the one boasting about 178% gains in six months. Just click here to learn more about our service.
Wishing you success in your investing and beyond,
Chloe Lutts Jensen
Editor of Investment of the Week