'Lucky 13 Portfolio': Fuel Systems and Three Cancer Drug Makers

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 |  Includes: ARIA, ASTX, CASC, CLNE, FSYS, GTXI, ONB, OSIR, PRXL, SPPI, SWC, TOMO, UNG
by: Justin M. Hall

The Lucky 13 Buys portfolio was introduced on July 7, 2009. In less than two months, this portfolio of carefully selected companies has gained nearly 30%. Three of the companies have achieved gains of greater than 53%. While almost ½ are up over 38%, more than ¾ of the Lucky 13 have advanced more than 15%.

Since the Lucky 13 Buys debuted, several leaders have emerged and since pulled back from their respective highs. To view past results, click on the companies listed below.

LUCKY 13 BUYS
Symbol
Last
Gain/Loss (%)
(NASDAQ:FSYS)
32.20
72.93%
(ONTY)
5.32
65.74%
(NASDAQ:TOMO)
4.05
53.41%
(SUPG)
2.89
42.36%
(NASDAQ:ARIA)
2.12
40.40%
(NYSE:SWC)
7.01
38.26%
(NASDAQ:CLNE)
10.62
23.34%
(NYSE:ONB)
11.15
19.00%
(NASDAQ:GTXI)
9.61
18.50%
(NASDAQ:SPPI)
6.49
15.28%
(NASDAQ:PRXL)
12.98
2.77%
(NASDAQ:OSIR)
12.25
(-2.23%)
(NYSEARCA:UNG)
11.35
(-6.81%)
Portfolio
Gain
+29.48%
Click to enlarge

Data: Closing prices from July 7 to August 21, 2009.

FUEL SYSTEM SOLUTIONS

Fuel System Solutions, the newest leader of the Lucky 13, has gained nearly 73% in the past seven weeks. On Thursday, August 6, FSYS reported solid Q2 2009 earnings which beat analysts’ estimates. Eight days later, on August 14, Jim Cramer, the host of CNBC’s Mad Money, provided a favorable outlook on the company.

FSYS is one of three plays, within the Lucky 13, on T. Boone Pickens’ Plan. Under the Pickens’ Plan, Boone has proposed a solution that could enable the US to reduce its dependence on foreign oil by shifting commercial vehicles from diesel and gasoline to a much cleaner and cheaper (for now) natural gas – compressed (CNG) or Liquid (LNG). According to Boone, even former US Vice-President Al Gore likes the idea! It is worth noting a bill could be passed as early as this year calling for half of the federal government’s fleet to be switched from petroleum-based fuels over to natural gas. If so, this would likely spell a huge win for FSYS.

Interested investors ought to keep an eye on FSYS.

OTHER RECENT CALLS

  • On August 17, 2009, I alerted investors at my SeekingAlpha blog that SPPI Is a Buy at $6.12 when shares retested their 50-day MA. In four short days, SPPI advanced +6.05% to close at $6.49 on Friday, August 21.
  • On August 14, 2009, I pointed out that ARIA had Significant Catalysts Approaching. Since then, ARIA has jumped +17.78%. At the end of last week’s trading, shares of the stock closed at $2.12.
  • On July 14, 2009, I wrote that SPPI was Oversold and Undervalued at $4.98. Since that time, shares have advanced +30.32%.

GOING FOWARD

Some on Wall Street are expecting the market to pullback in the near-term. As major indices continue to post new highs (YTD), investors should -- at least -- anticipate and be prepared for stocks to retreat at some point in the near future.

Throughout 2009, small cap drug makers with late stage products have been a good bet. Over the coming weeks and months, this trend is highly likely to continue. From my view, the best plays are late-stage drug makers with pending catalysts. Listed below are three of my favorite fall ‘09 picks (arranged by date of event).

(1) Spectrum Pharmaceuticals

On or before September 7, the FDA will review the company's non-Hodgkin's lymphoma drug, Zevalin® for first-line consolidation treatment.

On October 8, regulators are also scheduled to review SPPI's drug Fusilev® which is indicated for colorectal cancer. For more details, see this August 20 article on SPPI.

(2) Ariad Pharmaceuticals

On or before September 30, data is expected from the first of two interim analyses of a Phase 3 study on ridaforolimus, an mTOR inhibitor that is indicated for soft-tissue and bone sarcomas. For more details, see this August 14 article on ARIA.

(3) GTX Inc.

On October 30, regulators are also scheduled to review GTXI's new drug Acapodene® which is indicated for the treatment of bone loss in men with prostate cancer.

Disclosure: Long ARIA and SPPI.