10 Best-Buy Wealth-Building Bets, Odds-On Payoffs, In 6 Months Or Less

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 |  Includes: JAZZ, KLAC, LMT, MDCO, MDSO, MNK, VIAB, VRX
by: Peter F. Way, CFA

Summary

Put the market-makers and prop-desk traders on your side.

They tell what big-money funds are buying, how far those clients will push prices.

Not by what the sales types say, but by the way the block desk hedges its bets.

Likely odds and payoffs are based on hundreds of prior hedges like today’s.

Simple, time-efficient risk-management discipline compounds double-digit payoffs multiple times a year from a steady flow of screened candidates.

Suppose you had a friend whose employer for a number of years has paid him over a million dollars a year for picking stocks that could be sold, better than 9 times out of ten, in less than two months, for prices at least +15% greater than they cost. Repeating that half a dozen or more times a year more than doubles the boss's money.

And he left his list of today's ten picks by accident in your car as you drove him home. Here's what it said:

Click to enlarge

Medidata Solutions (NASDAQ:MDSO) provides cloud-based solutions for life sciences companies, offering products and services including Medidata Rave and Medidata Grants Manager.

Jazz Pharmaceuticals (NASDAQ:JAZZ) focuses on specialty pharma products that address unmet medical needs.

Valeant Pharmaceuticals International (NYSE:VRX) develops, manufactures, and markets generic pharmaceuticals and medical devices.

The Medicines Company (NASDAQ:MDCO) treats critical care patients through delivery of innovative, cost-effective medicines to the worldwide hospital marketplace.

Lockheed Martin Corporation (NYSE:LMT) is a security and aerospace designer and manufacturer of advanced technology systems and products.

Questcor Pharmaceuticals (QCOR) is a biopharma company focused on patients with serious autoimmune & inflammatory disorders.

KLA-Tencor Corporation (NASDAQ:KLAC) a supplier of process control and yield management for semiconductor and related nanoelectronics producers.

Viacom Inc. (NASDAQ:VIAB) is an entertainment content company connecting with audiences in over 160 countries with television, motion pictures, games and social media.

Air Methods Corp. (NASDAQ:AIRM) provides air medical emergency transport services and systems and installs medical aircraft interiors.

Align Technology Inc. (NASDAQ:ALGN) designs, manufactures and markets systems for treating the misalignment of teeth.

It looks like the forecasts of likely prices for these ten best stocks have upside price changes possible averaging over +15% with past price drawdowns at their worst of less than -5%. The ten companies over the past 4 years (1056 market days) had 490 similar forecasts and made money in 93% of them according to the blue totals row in his list. If it only took between 7 and 8 weeks of 5 market days each, they could be repeated 7 to 8 times a year, which at a net gain of +14.6% would produce profit at a rate of +150%.

Look at the differences between what the S&P500 SPDR (NYSEARCA:SPY) offers and this ten-best list. Heck, even the Nasdaq 100 Index (NDX) may do 3 times as good as that market bogey. Wow, they have forecasts for over 2500 stocks. That must include ETFs, like SPY, and market indexes too. Wonder how good their market forecasts are?

No wonder he gets paid what he gets. Running a mere $10 million of firm capital, there's plenty of a $15 million gain left for the firm after he gets his bonus.

Wish I could get a job like that. Well, maybe I can use this list on a much smaller scale. Just hope he might be this careless again. What a beautiful friendship this could turn out to be if he is!

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.