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Joe Cotton: Stock pick of the week is Supernus Pharmaceuticals, real drug company, real earnings

Market Assessment-As of October 18, 2021 at 10:51 AM

Last week the DOW rallied from Wednesday’s lows to amazingly cross strongly back above its 50-day moving average, and our concerns regarding our being in a Bear Market have currently ended…see chart below.

That doesn’t mean we aren’t still cautious. Two adages we like to keep in mind are “Stocks don’t go up forever” (Mine) and “A Bear Market Comes Like a Thief In the Night” (Mine).

Our “Stock of The Week” is Supernus Pharmaceuticals, Inc. (SUPN) 31.44. It is a biopharmaceutical company that focuses on the development and commercialization of products for the treatment of central nervous system diseases in the United States, including epilepsy, Parkinsons, Migraines, and Attention Deficit Hyperactivity Disorder.

Joe Cotton

It recently received FDA approval for Qelbree for the treatment of ADHD in pediatric patients 6 to 17 years of age. This is a big deal, as it is a non- controlled substance. And the company has submitted a supplemental new drug application (sNDA) with the FDA for adult patients, and expects the results within the 2nd quarter of 2022. In addition, on Monday, October 11, the company announced it was buying Adamas Pharmaceuticals for $400 million to expand its roster of treatments for Parkinson’s disease and reduce reliance on it’s top selling epilepsy medicine.

This is a quality company, which we believe is substantially undervalued at its current price. We gave the stock a Buy Rating @ 27.46 in our September 7th, 2021 Market Letter. It’s a Real drug company that has Real earnings….$1.84/Sh, and a relatively low PE Ratio of 17.17 and sold for $60 a share in May of 2018…see chart. My wife bought the stock for $32.28 on Friday 10/15/21.

Joe Cotton has won 3 National Stock Picking Contests with yearly percentage gains in excess of 96%. His 2020 Wall Street’s Best stock contest winner was Inovio Pharmaceuticals (Symbol INO) with a 742% 1-Year return.

This article is not investment advice, nor is it in any way to be construed as investment advice. For Investment Advice consult a Registered Investment Advisor or a Certified Financial Planner. Joe Cotton’s website is www.cottonstocks.net. NKY’s Joseph W Cotton is publisher of the market newsletter, Cotton’s Technically Speaking. He is a graduate of Xavier University, a former bank manager and credit analyst, and a former Fidelity Investments registered investment representative. Contact him at cottonstocks@hotmail.com

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