I really wish I had several thousand dollars to play with right about now. If I did, I'd plunk the entire wad down on Medivation (MDVN) and let it ride.
Why would I do that? My reasoning is simple. I'd do that because the recent sell-off of Medivation, on the heels of a disappointing phase 3 study of the drug dimebon (latrepirdine) absolutely blew the floor out from under the company's shares. I'm telling you right now, I believe that sell-off has gone twice as deep as good sense can justify. At least, that's the way I see it.
First off, we should understand that drug trials are Medivation's business. Clinical trials are what the company does. This failed phase 3 study isn't to be considered a crash into a brick wall. It's not a crippling lawsuit. It's not the loss of a major customer account. It's simply a sudden downshift, a temporary change of gears. In many ways, for Medivation, it's just one facet of business as usual.
As I look at Medivation's one-year and three-year performance charts, the opening to invest is just screaming at me. It's very seldom that I come across scenarios that, to me, present such an appealing opportunity. Of course I'm just a rank amateur at this, and I'm certainly no one's professional stock analyst. However, I do have an eye for potential, and to me this situation presents some.
In my view, this stock should rebound very nicely, and in fairly short order.
Gary Sattler does not knowingly hold positions in the companies he writes about.