2 Riskier Companies I'm Considering Selling In The Short Term, And Buying In The Long Term

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Includes: ASMB, MNTA, TEVA
by: Matt Schilling

As US markets opened down on Monday, many investors looked once again toward the uncertainty in the Eurozone as a reason for the sell-off. That being said, there are two companies which I'm considering selling in the near term, and buying for the long term for various reasons.

Ventrus Biosciences (VTUS) - Shares of VTUS opened down almost 56.5% at the start of Monday's trading session, making the stock very attractive to those who may be interested in shorting the company at these levels. Trading in a 52-week range of $6.64/share and $15.69/share, Ventrus Biosciences has continued to trade in a steady manner over the last 5 sessions, until this morning's open. The company announced today that its drug, VEN 309, failed to eliminate bleeding when compared to that of a similar placebo treatment, and also noted that it would discontinue any studies or research with regard to VEN 309.

That being said, I think VTUS presents potential investors with a great opportunity to establish a position as the sell-off ceases. This is due to the fact that there are two other experimental drugs in the company's pipeline, both of which are geared toward anal fissures and fecal incontinence. If the stock drops to $4.60/share or lower I would then begin to establish a small position, and any drop below $3.95/share should investors to establish a much larger position. If VTUS can demonstrate positive results during the clinical trial phases of each drug, it could carry some very good long-term potential. The play here is very risky, considering the most recent news, and I expect the stock to drop even further over the next few sessions. Once the dust settles and volatility calms down, a buying opportunity near the $3.60/share range could present itself.

Momenta Pharmaceuticals (NASDAQ:MNTA) - Shares of MNTA opened down almost 18.1% at the start of Monday's trading session, making the stock very attractive to those who may be interested in shorting the company at these levels. Trading in a 52-week range of $10.15/share and $21.00/share, Momenta Pharmaceuticals had been trading in a positive manner over the last 5 sessions, until this morning's open. The company announced today that it had lost a patent lawsuit with regard to the drug Copaxone, which represents nearly $3 billion dollars of the $20 billion dollars Israeli-based Teva Pharmaceuticals (NASDAQ:TEVA) is expected to generate this year.

That being said, I think MNTA presents potential investors with a great opportunity to establish a position once the near term sell-off ceases. This is due to the fact that there are two other experimental drugs in the company's pipeline, M402 (which is a Novel anti-cancer compound) and M118 (which is an anticoagulant geared toward the unmet needs of various acute coronary syndromes). If the stock drops to $11/share or lower I would then begin to establish a small position, and any drop below $9.90/share should investors to establish a much larger position. If MNTA can demonstrate positive results during the clinical trial phases of each drug, it could carry some very good long-term potential. The play here is very risky, considering the most recent news, and I expect the stock to drop even further over the next few sessions. Once the dust settles and volatility calms down, a buying opportunity near the $9.25/share range could present itself.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.