Imagine a company with 90%-plus margins and huge cashflow that uses its cash to carefully expand its business and buy back stock -- with a P/E under 8! That's Questcor Pharmaceuticals (NASDAQ: QCOR).

QCOR has a treatment that is approved for spasms from multiple sclerosis, but is mostly used to treat radical infantile spasms that kill or retard babies.

Your best strategy for life-changing profits?

Buy the stock and wait for it to appreciate or for the company to get bought out. You could also buy the (illiquid) options, or buy the stock and sell the calls.

Next: Biotech Stock #3

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