The Top 5 Nasdaq 100 Speculative Opportunities

by: New Low Observer
Below are the top five Nasdaq 100 companies that are within 20% of the 52-week low. This list is strictly for the purpose of researching whether or not the companies have viable business models. These companies are deemed highly speculative unless otherwise noted. The complete list of 17 companies is located here.

Name Trade P/E EPS Yield P/B % from Low
Cisco Systems (NASDAQ:CSCO)
$19.70 14.44 1.36 0 2.46 3.68%
Intuitive Surgical (NASDAQ:ISRG)
$260.07 30.95 8.4 0 5.10 5.70%
Amgen Inc. (NASDAQ:AMGN)
$53.89 11.65 4.63 0 2.11 7.22%
$18.80 9.24 2.04 0 N/A 8.55%
Apollo Group (NASDAQ:APOL)
$37.95 10.49 3.62 0 4.02 12.44%

Watch List Summary

In the Nasdaq 100 watch list of 17 companies from November 26, 2010 to the closing price of December 10, 2010, the average return from all of the companies listed was +3.21%. This is compared to the NDX (Nasdaq 100 Index) which had a gain of +2.85%.

Apollo Group registered the largest gain of +10.13% in defiance of any suggestion by us that it was going to be dropped from the Nasdaq 100. Apollo Group's ability to stay in the Nasdaq 100 (article link) is in stark contrast to rival for-profit education company Corinthian Colleges (NASDAQ:COCO) which was dropped from the S&P MidCap 400 Index down to the S&P SmallCap 600 Index on Thursday December 9, 2010 (article link). Microsoft (NASDAQ:MSFT) and Teva Pharmceutical (NYSE:TEVA) rounded off the top three performers with 7.77% and 6.81% gains, respectively.

Dish Network and Gilead Sciences were the only two stocks with declines of less than -1.20% each.

Top Five Performance Review

In our ongoing review of the Nasdaq 100 Watch List, we have taken the top five stocks on our list from the closing price of December 11, 2009 and have checked their performance one year later. The top five companies on that list are provided below with the closing price for December 11, 2009 and December 10, 2010.

Symbol 2009 2010
Genzyme Corp. (GENZ) 49.74 69.82
Apollo Group (APOL) 56.58 37.95
Cephalon (NASDAQ:CEPH) 58.94 63.23
Electronic Arts (ERTS) 16.11 15.82
Gilead Sciences (NASDAQ:GILD) 46.42 37.61
Nasdaq 100 1792.06 2215.34

As a group, the top five companies on our Nasdaq 100 list watch list averaged a loss of –1.21% in the last year. This compares with the Nasdaq 100 Index gain of 23.62% in the same one-year time frame. It should be noted that Genzyme, Apollo Group, Cephalon, and Electronic Arts gained 10% in the first 41 days of the watch list posting. This equals approximately 80% annualized returns if sold at the 10% mark. As we continually state, if you can beat historical market returns in less than a year then it may be worth seeking out any viable alternatives from the most recent watch list.

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Disclosure: I am long Cisco (CSCO).