Today’s 2015 Top Pick is a repeat: a biotech company whose latest drug approval holds great promise.
MannKind (MNKD)
from Nate’s Notes
Once again, my Top Stock Pick for the coming year is MannKind (MNKD).
After several years of delay, the company’s lead product, Afrezza (inhalable insulin for diabetics), was finally approved by the FDA last summer. And if you had told me in January of 2014 that the stock was going to finish the year basically right where it started after having the uncertainty regarding both approval and finding a partner (Sanofi) removed from the equation, I would not have believed you. However, that’s exactly what we’re looking at today!
Of course, the biotech sector is notorious for experiencing “market inefficiencies” from time to time in which individual stocks become radically mispriced, based on what turns out to be a misinterpretation of the data that is available to investors. And in my 26 years of following the sector, I believe the MannKind story may represent one of the most inefficient markets I have ever seen for a stock.
The good news for investors, of course, is that inefficient markets eventually become efficient again, and given our long-term approach to investing, we don’t mind waiting (and have been aggressively buying the stock at current prices). MNKD is a strong buy under $6 and a buy under $9.
Investment Digest Editor’s Note: Interesting article on MNKD: http://blogs.barrons.com/stockstowatchtoday/2014/11/21/mannkinds-afrezza-remains-in-sanofis-plans-rbc-says/?mod=yahoobarrons&ru=yahoo
Nate Pile, Nate’s Notes, www.NotWallStreet.com, 707-433-7903, December 24, 2014