Myrexis, Inc. (MYRX)

[HopeUnderstand]

Speculative Small-Cap: Myriad Pharmaceuticals (MYRX)

Spun off by Myriad Genetics in June 2009, this company has seen its share of problems already. Spun off in the $7-$8 range, MYRX fell to below $4 in a matter of weeks; in fact, it still only trades at $4.42. The cause for the rapid selloff wasn’t because it was a bad investment, but because many funds were forced sellers. Myriad Genetics was a $4 billion company before it spun off Myriad Pharmaceuticals, which only has a market cap of $105 million. Many of the largest sellers of MYRX stock were the large institutional companies who either didn’t care about MYRX (because they wanted to own the parent company, not MYRX), or were forced sellers because MYRX was too small of a company. This has created a unique situation where small investors can actually take the upper hand.

The company has a cash hoard of over $180 million, almost twice their market cap. Combine that with zero outstanding debt, it MYRX looks even more interesting. The only bearish side to the company clearly isn’t on its balance sheet, but in its pipeline. Most of their drugs are in early phases of clinical trials, and will need huge amounts of cash until they get to market. Some of their drugs were prudently purchased from other companies, some extremely cheaply as the seller was going into bankruptcy. Although I am not an expert in the field of medicine, I believe if the trials go as planned, they should have a very profitable line of drugs. There cash hoard should provide them with a cushion of comfort, and especially with such a great balance sheet, they are an intriguing takeover target. Look for MYRX to outperform in the long-run, but keep a sharp eye on their drug trials, as this is the only caveat.

LINK: http://seekingalpha.com/article/160114-three-stocks-for-any-portfolio?source=yahoo