New Magic Recipe Stocks for 3/27/2016
The first stock to mention is Five Prime Therapeutics (FPRX). Five Prime is one of those classic "Magic Formula mirages" - a small development-stage biotech that just received a massive milestone payment. While the calculations and placement are legitimate, prospective investors should realize that these numbers are not sustainable long-term on the current basis of revenue.
We can't ignore the entry either of Valeant (VRX). Anyone who follows stocks has probably heard of this cluster, a once high-flying stock that is one of famous hedge fund manager Bill Ackman's largest holdings, the stock has fallen from $250 to $30 over the course of 9 months! While an interesting soap opera, the company is now going through a management change and a complete business strategy change, all while facing political pressure and an enormous debt load. That said, investors did believe this was a company worth almost 10 times its current valuation not even a year ago.
Here are the full lists:
Tickers dropping out:Ambarella, Inc. (AMBA)
McKesson Corporation (MCK)
Insys Therapeutics, Inc. (INSY)
GNC Holdings, Inc. Class A (GNC)
Tickers entering:Five Prime Therapeutics, Inc. (FPRX)
Valeant Pharmaceuticals International, Inc. (VRX)
Michaels Companies Inc (MIK)
Cato Corporation Class A (CATO)
10% Movers:Five Prime Therapeutics, Inc. (FPRX) 11.74%
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