When you are looking to make a profit on options, the ones that are more volatile tend to be the smart play. But the best plays maybe the stocks that are not volatile, but may experience some turbulence in the near future. Par Pharmaceutical Companies, Inc (PRX) could be one one of these stocks. I brought it to your attention in January, when I said it would break $40 in the short term. We were right about a move to the upside and banked some serious coin on the calls.
Now I bring it to your attention again when it is sitting over $40. This is an "under the radar' generic pharma company that has been beating EPS estimates for 10 of the last 11 quarters. A company that has been acquiring assets and putting itself in a better position since it was sitting at $10 in 2008. This once $75 stock is ready to steamroll to $50+ this summer(like I wrote in my January post).
And it sure looks like the company is starting to gain the attention of the investment community with 5 new analysts starting coverage in the last 9 months.
| 4/20/2012 | Piper Jaffray | New Coverage | Overweight | 49.00 | 40.20 | 40.94 | 1.84% | |
| 3/16/2012 | JPMorgan | New Coverage | Neutral | 40.00 | 37.46 | 40.94 | 9.29% | |
| 1/9/2012 | Buckingham Research | Upgrade | Buy | 45.00 | 34.01 | 40.94 | 20.38% | |
| 12/9/2011 | Barclays | New Coverage | Equalweight | 35.00 | 31.46 | 40.94 | 30.13% | |
| 10/6/2011 | ThinkEquity | New Coverage | Buy | 35.00 | 27.87 | 40.94 | 46.9% | |
| 8/18/2011 | Leerink Swann » Updated 11/30/2011 |
New Coverage | Outperform | 35.00 | 29.44 | 40.94 | 39.06% | |
| 3/25/2011 | BofA/Merrill Lynch | Upgrade | Buy | N/A | 29.33 | 40.94 | 39.58% | |
| 9/30/2010 | UBS » Updated 1/9/2012 |
New Coverage | Buy | 42.00 | 28.66 | 40.94 | 42.85% |
Par Pharmaceutical Companies, Inc (PRX) reports first quarter earnings on May 8th. We think now is the time to position before that day, as this stock will trade above $45 in short order.
Disclosure: We currently own the $45 May calls