Chris Lau
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Chris Lau in Value Stocks,

Look at These Triple Digit Value Stock Ideas

The Micro-cap value stock strategy unwound most of its losses. The strategy benefited from bearish calls on Mid-Con Energy Partners (MCEP), Unipixel (UNXL), and Heron Therapeutics (HRTX). Weak market conditions will mean more selling/avoiding calls. Biotech stocks are even more volatile. 

Disappointing cash flow burn rates, low revenue, and the high costs associated with launching drugs will pressure small-cap biotech stocks. See Relypsa (RLYP). The company raised debt, not stock, but the market still reacted negatively. There are few buy ideas in the small cap space, but when stocks get too discounted, followers will get an alert.

Bottom fishing for value strategy added Endo International (ENDP) as a short-call. The company faces steep competition from other generic drug makers. Government is also scrutinizing price-gouging, a move that may further hurt Endo. High reader-interest in Valeant (VRX) is unsurprising: the wild price swings give traders lots of buying and selling opportunities. The government’s continued interest in Valeant’s pricing model will weigh on the stock.

Click here to follow this strategy. 

Originally emailed to TradingIdea subscribers..