United Therapeutics Corp. (UTHR)

United Therapeutic (UTHR-Q) or Allergan (AGN-N)? This is a tough one because they are 2 very different companies. Allergan is a much larger company and more broadly-based, however, this one is a very fine company. Its primary drug therapy is dealing with pulmonary disease. The risk of owning this is that one drug represents a high percentage of their total revenue.

A good company. ROC has been improving, and has been very high. Back in 2008, it had a 4% ROC. Including the trailing 4 quarters, he now shows a 35% ROC, so he knows the company is doing everything right. Remember that when you have that high return, it can turn over really fast, but for now it is good.

(A Top Pick Dec 19/12. Up 115.38%.) Involved in a very specialized area, pulmonary arterial hypertension, which is high blood pressure in the lungs. The big spike in the stock price came as a result of FDA approval of an oral application for one of their drugs. They are quickly establishing themselves as the “go to” drug maker in this critical area where a lot of people are at risk.

(A Top Pick Dec 19/12. Up 81.38%.) Bio-pharmas are interesting because they have got a pipeline that is very exciting with new drugs coming on that are biology-based as opposed to chemical-based. Have always been extremely expensive, but this one isn’t. Trading at about 14-15 times next years earnings. There has to be a continuation of the acceptance of the existing product, but what he is really hoping for is an expansion of their product offering. They have 3 main drugs that they get most of their revenues off of. He’d like to see that at 6 or 12.

It is going to be news driven. In October one of their drugs was turned down by the FDA. The more drugs they have in their pipeline the less you will see of this. Growing well. Thinks it is good value. 10 times earnings.