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Dummy's Case For Buying OPK

Jan. 10, 2014 11:47 AM ETOPK2 Comments
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Seeking Alpha Analyst Since 2010

I am an engineer, MBA (IT & finance) and have been investing in US and foreign stocks for more than 20 years. My main strategy is swing trade and call options.

Recently, Opko Health has come into my radar screen due to the heavy insider buying. CEO, Dr. Phillip Frost had been buying shares all along even at $10.9 recently. Now that the stock price has retraced to around $8.4 and hovering across 200 day moving average, this might prove to be a golden opportunity to buy some shares. After missing an opportunity to buy Tesla (TSLA) shares in June 2013 at a slightly cheaper price than what CEO Elan Musk paid when he bought shares worth $100 million at $92.2, I have learnt my lesson. Valuation of TSLA was sky high and I was nervous in putting my money in it in spite of the bet by Musk. Since then the stock has rallied more than 50%.

Here are few dummy's reasons that OPK is a buy at this point.

1. OPK had a long run over the years indicating there is substantial value or potential in the business.

2. OPK is near its 200 day moving average, which should prove to be a great opportunity to buy the stock now.

3. CEO Dr. David Frost has a track record of being a successful entrepreneur in the past, similar to Elan Musk.

4. Biotech stocks tend to go higher based on the speculation and potential of new drugs coming into the market. Opko being a conglomerate of biotechs, this could be a diversified bet.

Disclosure: I am long OPK, .

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