This list is strictly for the purpose of researching whether or not the companies have viable business models. Although theses companies are very risky, they provide significant opportunity to outperform the market in the coming year.
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Nasdaq 100 Summary
On our last Nasdaq 100 watch list, Cephalon (NASDAQ:CEPH) was within 6% of the 52-week low. This week, Cephalon was presented with an offer that seemed exceptional. Valeant (NYSE:VRX) announced that it was willing to offer a buyout of Cephalon at $73. The market reaction to this was to push Cephalon above the offer price to $75. At the same time, Valeant's stock price has jumped more than 15%, indicating that the market feels that Cephalon could use a shake-up. Our individual recommendation of Cephalon was issued on February 15, 2011 and can be found here.
Nasdaq 100 Performance Review
Our watch list from March 26, 2010 (found here) performed well, considering that Apollo Group (NASDAQ:APOL) has continued to fall due to closer scrutiny of Apollo's business practices. Gilead Sciences (NASDAQ:GILD) managed to decline -30% before coming full circle with a 1-year loss of "only" -7%. The average gain for the whole group was 21.26%, which was slightly ahead of the Nasdaq 100 index by 2.13%.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.