Wednesday, October 27, 2004

Whisper of the Week: Stratasys

About a year ago, I told a prospective client to buy shares in a
Minnesota-based company called StrataSys (NASDAQ: SSYS), even though,
at that point the stock had already zoomed fourfold. While the stock
had had its run, I said, he should at least follow the stock as if it
were his cholestrol, wait until profits were taken, and then load up.

Stratasys specializes in 3D protoypes that are first engineered on
computer
and then created into physical models. They are incubated in a non-toxic
environment, spitting out fastly processed, high resolution, and fully
functional polycarbonate models. Think elated architects, think
ebullient middle school laboratories. In fact, during the last quarter,
Stratasys announced that they had received a bunch of orders from
schools. Their numbers look great--they've grown profits year to year
since 2000; as we speak, the stock is only four or five points from its
52 week high, and on the Street, the trend is always your friend. Today,
Stratasys find itself in the middle of yet another base and just about
at the same price it was 52 weeks ago.

Wall Steet can be a really sordid place sometimes; on others, it can act
with redeeming benevolence, as when stocks come around full circle to
pick up those who missed the boat the first time around.

This seems to be the case right now with one of my favorite
pharmaceutical companies--Ivax. Ivax (AMEX: IVX), which specializes in
the manufacturing of generic drugs went from $12 to $28 in 2003, then
sold off briskly, finding support at $18. With all the political
pressure to reduce drug costs, generic drugs are just as great place to
be as they were a year ago. Today, Big Pharma as a whole is recuperating
from the blow it was administered when Merck was forced to pull Vioxx
off the shelves. Ivax, which I particularly like, is commandeered by
Phillip Frost--one of the engineers of the 60 billion dollar
Pharmacia-Pfizer deal. He's got an indispensable knack for deal-making,
not overly common in the industry. Ivax recently launched a generic
version of Nuerontin, Pfizer's epilepsy drug.

Whether it's pills or prototypes, investors should never take thier eyes
off a stock, espicially if that stock is known to act like a boomerang.

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