TOM HUDSON: Technology and health care have been a couple of the strongest areas over the past year for investors. Tonight`s “Street Critique” guest is putting the two of them together, Hilary Kramer back with us, editor of gamechangerstocks.com.
Health care plus technology equals biotechnology, and here you`re looking at Ariad Pharmaceuticals, A-R-I-A, A-R-I-A, the ticker symbol, up near an 11-year highs with this run-up. What pushes it up into the teens?
HILARY KRAMER, EDITOR, GAMECHANGERSTOCKS.COM: Ariad Pharmaceuticals, Tom, has two very important compounds. One is for non-small cell lung cancer. Extremely important, AP3113 (ph), and the other compound is to fight bone sarcomas. And they`re in a joint venture, Ariad is, with Merck (NYSE: MRK) Pharmaceuticals. You know, in the $12 region, this is a stock certainly that could go to $18 or $20 because of this huge revenue potential in the applications for other cancers that these two compounds have for Ariad.
HUDSON: You`ve looked at biopharmaceuticals for some time. And back in February you liked one. And Amalan sent us an e-mail with this question, and “I know you were waiting on a cancer meeting a few weeks ago, but YMI,” which is YM BioSciences, “dropped after it, is it still a buy?” You mentioned this back on February 9th around $2.50 per share. It`s up 7 percent. But you see the drop-off in June after that big oncology cancer meeting. Is it still a buy at around these prices?
KRAMER: Why I am at the grapevine (ph) right now? Because we are waiting to find out that kind of phase II trials as well as who is going to be the marketing partner. Just like Ariad has Merck (NYSE: MRK), which is very important. Who`s going to partner up with? Who`s is going to help fund you, take you to that next level? And that`s the overhang on YMI right now.
HUDSON: All right. A strategy question landed in our in-box from Sandi, here it is, asking: “How is it possible that Hilary owns every stock that she recommends?” We`ve got a list of what you`ve recommended on our Web site, of course. How can you own all of them?
KRAMER: Well, you can`t own every stock. I own a lot of stocks because professionally, I`m in the stock market, and I have three newsletters where I`m writing and talking about stocks. However, for an individual, optimally, you never want to own more than 25 stocks. And there has been research 17 to 18 stocks is the right number.
You want to supplement it with ETFs to be in some hot sectors that might interest you, find great mutual fund managers on Morningstar (NASDAQ: MORN), and always keep diversified and keep some powder dry for those days where that stock market really gives some back, and then you can come in and buy some of the stocks that you`re interested in.
HUDSON: Yes, always keep some reserve cash. How about disclosures? Do you own the two biopharmas we mentioned tonight?
KRAMER: Yes, I own Ariad and I also own YM BioSciences. Great. More e-mails, get them to us at firstname.lastname@example.org. Our guest this evening, from the NASDAQ on “Street Critique,” it`s Hilary Kramer, gamechangerstocks.com.