This post is part of a special annual report -- Top Stock Picks '09 -- in which TheStockAdvisors.com asked 75 leading newsletter advisors to select their favorite investment for the new year.
"My top idea for 2009 is Myriad Genetics (NASDAQ: MYGN)," says Mike Cintolo. In The Cabot Market Letter, he looks at "the leader in the new field of cancer predisposition testing."
"Myriad Genetics five tests on the market (covering colon, breast, ovarian, and skin cancer) that tell a patient if his genes make it more likely that he'll get various types of cancer.
"During the past few quarters, revenues from these tests have risen at a 50% annual clip, and there's no sign of that slowing down.
"The company also has a pharmaceutical division, but it's going to spin that off sometime in 2009. That should be a big positive, as the drug development division carries good potential, but also big-time costs. Once the cancer predisposition testing division is on its own, much of that revenue growth is going to fall to the bottom line.
"Not that earnings need any goosing. Revenues rose 53% to $73.7 million in the third quarter, while earnings soared to $0.30 a share, up from a loss of 18 cents the year-ago quarter. Better yet, analysts expect the bottom line to jump 40% in each of the next two fiscal years.
"The stock itself actually hit new peaks in early November, despite the market's weakness, and is now building a new launching pad as institutional investors quietly build positions.
"In fact, the past few weeks have successfully taken the stock out of the public's eye, and while it may need a bit more time to set up, it's primed for a breakout early next year. If the market's nascent uptrend can persist, I think MYGN can be a big winner."
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