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Shares of Arena Pharmaceuticals (ARNA) were trading up as much as 40% on Wednesday, as the FDA approved it first obesity drug in 13 years. The drug, Lorcaserin (aka Belviq), eliminates ones desire to eat, even at times when they aren't hungry, which essentially eliminates one's desire to snack. That being said, it wasn't the only good news hitting the wires today. In my opinion, not only does ARNA look fantastic at these levels, but two other companies have caught my eye and carry some very nice long-term upside potential.

Loral Space & Communications Ltd. (LORL) - LORL, which trades in a 52-week range of $45.65 (52-week low) and $82.48 (52-week high), was trading as high as $66.87/share on Wednesday. Shares were up roughly 14% during trading on Wednesday, as the company has agreed to sell its Space Systems/Loral subsidiary to the Canadian firm, MacDonald, Dettweiler, & Associates. LORL sold its Space Systems/Loral subsidiary for an estimated $875 million dollars, freeing up some much needed cash. On the surface many investors see the deal being worth $875 million, however it could actually reach above $1 billion dollars Space Systems/Loral will still pay dividends to Loral for some time. The company noted, "That in addition to the $875 million it will also receive cash dividends and other payments from its SS/L subsidiary, which are expected to be in excess of $135 million". What attracted me to LORL at these levels, were two notable factors. First, they'll be receiving additional dividends from the Space Systems/Loral acquisition of at least $135 million, which will to the $500 million in cash the company already has on its books. Second, the company is trading at an affordable P/E ratio of 31.76, which could actually be lowered in the coming quarters if positive results can surpass street estimates by 5% or more. For potential investors looking to establish a position in the company I'd begin with a small one and ad additional shares as earnings announcements approach.

UniFirst Corp. (UNF) - UNF, which trades in a 52-week range of $42.84 (52-week low) and $62.98 (52-week high), was trading as high as $63.24/share on Wednesday. Shares were up roughly 10% during trading on Wednesday, as the company reported EPS results that were much better than the street was expecting and lifted its full year outlook for 2012. Analysts were expecting UNF to earn $0.99/share on revenue of $311.7 million dollars; however the company reported earnings of $1.37/share on revenue of $320.9 million dollars. In my opinion, surpassing earnings estimates by 38% is pretty impressive, especially when the company surpasses year ago EPS by 49%. UniFirst is very attractive at these levels for two reasons. First, the company's full year outlook continues to get better. During the second quarter UNF noted full year numbers to be as high as $4.25/share on revenue of $1.24 billion, today they announced those numbers could be as high as $4.70/share on revenue of $1.26 billion. Second, they've beaten street estimates by an average of 11.2% over the last four quarters, and by the looks of it should be able to sustain that success in the upcoming quarters based on their most recent outlook. For potential investors looking to establish a position in the company, I'd begin with a medium to moderately large sized position and add to that position as earnings announcements approach.

Source: 2 Stocks That I Believe Have Strong Upside Potential