Top Picks 2007: Ryan Detrick bets on the Millennium

Posted Dec 31st 2006 8:30AM by Steven Halpern
Filed under: Newsletters, ETF Investing

Each year Steven Halpern, editor of TheStockAdvisors.com, surveys the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is part of his 24th annual Top Picks Report.

Millennium Pharmaceuticals (NASDAQ: MLNM) is the top speculative idea for 2007 from Ryan Detrick, editor of Players Performer. He says, "Millennium is one of the top performing stocks in the biotechnology field, as the equity has gained more than 44% since May 2006.

"The Cambridge, Massachusetts-based firm focuses on treatments for cancer and inflammatory diseases. The company also has drugs in the pipeline for multiple sclerosis, Crohn's disease, and various cancers. The biotech sector as a whole is positioned very nicely for a move higher.

"The overwhelming sentiment from investors toward this technical outperformer is one of doubt and skepticism, which parlays perfectly into a contrarian outlook. Specifically, heavy skepticism levied against a stock that is attractive from a technical perspective, not to mention a security from a solidly performing sector as a whole, suggests that there is ample sideline money to help usher the shares even higher.

"Short sellers are trying to call a top to the security; nearly 7% of the stock's float is sold short, which could provide ample fuel for a covering rally on any positive developments from the company.

"And Wall Street analysts absolutely despise the company, as all 14 of the brokerage firms following MLNM rate the stock a 'hold' or worse. Given the strong performance from the biotechnology group and MLNM, this heavy-handed bearish sentiment is rather surprising and could lead to an influx of upgrades on continued strong price action."

To see Ryan's favorite conservative stock for 2007, click here.