Surgery Partners (SGRY) IPO: Should I invest?

Our newest series, 3-up, 3-down takes a look at new IPOs and offers up three reasons to invest in them and three reasons to avoid them. Then, you decide. Let’s take a look.

3 reasons to invest in the Surgery Partners (SGRY) IPO

1) Rapid growth. Surgery Partners operates 99 surgical facilities – five of which are surgical hospitals – across 28 states. 200,000 surgical procedures were performed in their surgical facilities last year. Surgery Partners managed that feat in the 11 years since the company was founded in 2014.

That growth has helped the company achieve “industry leading same-facility revenue growth of approximately 9% during 2014, and an average of approximately 8% annually on a pro forma basis from 2012 to 2014.”

“Our pro forma revenue for 2014 was $871.2 million, which represents a compound annual growth rate of approximately 83% compared to revenue of $260.2 million for the year ended December 31, 2012,” the company writes in its S-1 filing. “For the six months ended June 30, 2015, our revenue was $457.0 million, compared to revenue of $147.3 million for the same period during 2014.”

2) Acquisitions. Surgery Partners has a proven track record of acquisitions. “Acquiring facilities has been a core component of our strategy since inception,” the company writes. They focus specifically on how they can create synergies between their company and their target acquisitions. The right acquisitions allow them to reduce head counts, close offices and pay less for supplies thanks to bulk ordering. “As a result of our recent acquisition of Symbion, as of June 30, 2015 we have achieved annualized cost and revenue synergies in an aggregate amount of approximately $8 million. … We expect this acquisition to drive significant cost and revenue synergies over the next two to three fiscal years, which we estimate will ultimately exceed $30 million in the aggregate (an amount that includes the approximately $8 million of synergies realized as of June 30, 2015).”

Surgery Partners also acquired NovaMed, Inc. in 2011. That acquisition led to a $5.2 million reduction in expenses and generated $9.3 million in incremental revenue.

3) The right sector. Healthcare is outperforming the S&P 500 Index this year. It’s up 2.9 percent YTD vs. -2.92 percent for the S&P. Biotech’s taken a pounding recently, but healthcare staples like AMN Healthcare Services, Inc. (AHS), whic offers healthcare workforce solutions and staffing services to healthcare facilities, have performed better.

3 reasons NOT to invest in the Surgery Partners (SGRY) IPO

1) Gobs of debt. Between Surgery Partners’ two business units – Surgery Center Holdings and Symbion – the company’s holding nearly $1.8 billion in long-term debt. That’s greater than the combined revenues of both entities.

2) Thin margins. In the past few years, Surgery Partners has largely been operating in the red. That’s thanks to its acquisitions, but it’s also due to fierce competition in the healthcare space. Surgery Center Holdings “more than doubled revenue from 2011 to 2014, exceeding $400 million,” per Fool.com. “But across that stretch it was positive on the bottom line only once, and posted an attributable net loss of $66 million last year. As for Symbion, in its last stand-alone fiscal year (2013) its revenue grew by 9% annually (to $536 million), but attributable net loss dipped to almost $13 million.”

Fool.com points out one of Surgery Partners’ competitors, AmSurg (NASDAQ:AMSG), demonstrated a similar pattern over past few years: substantial revenue growth and very thin top-line growth.

3) Regulatory risk. Government regulations are increasingly worrisome for healthcare companies – a risk Surgery Partners is well aware of. “The amount that we receive in payment for our services may be adversely affected by market and cost factors that we do not control, including Medicare, Medicaid and state regulation changes, cost containment decisions and changes in reimbursement schedules of payors, legislative changes, refinements to the Medicare Ambulatory Surgery Center payment system and refinements made by CMS to Medicare’s reimbursement policies. For instance, cuts to the federal budget caused a 2.0% reduction in Medicare provider payments in 2013.”

DISCLOSURE: I do not have a position in SGRY, and I do not plan to initiate one in the next 72 hours.

Photo credit: Adam Ciesielski

The Top 12 Best Biotech Stocks of 2013 and 2014

Biotech stocks can be unpredictable, but there are few that seem to have the consistency and growth to be worth the investment. Here’s my take on the top 12 Biotech Stocks on the market to date.

Biotech stocks can be unpredictable, but there are few that seem to have the consistency and growth to be worth the investment. Recent acquisitions, new products, and increased competition have every biotech company fighting to stay on top. Here are what we view as the top 12 Biotech Stocks:

Gilead Sciences, Inc. (NASDAQ:GILD)

Gilead Sciences is a research-based bio-pharmaceutical company that discovers, develops, manufacturers, and commercializes various prescription drugs. Their primary areas of pharmaceuticals include human immunodeficiency virus (HIV), AIDS, cardiovascular, metabolic and respiratory conditions, as well as liver diseases like hepatitis B and C. Gilead Sciences has operations in Asia, Europe, and North America and their product line includes AmBisome, Atripla, Cayston, Truvada, Viread, Eviplera, Emtriva, Hepsera, Letairis, Ranexa, Rapiscan, Macugen, Tamiflu, and Vistide. In January 2012, the Company acquired Pharmasset, Inc. and on February 8, 2013, its subsidiary, acquired YM BioSciences Inc. YTD: +63%

Amgen, Inc. (NASDAQ:AMGN)

Amgen creates, manufactures, and delivers innovative human therapeutics for a variety of uses. When it started in 1980, Amgen was one of the first biotech companies to develop safer and more effective medications using the latest technology. Amgen provided their investors with sizable gains last year, but a repeat performance this year is not as likely. Their first-quarter revenue fell short of their forecasts, but it is important to keep in mind that this is the first time in the last eleven quarters that Amgen failed to reach expected targets. YTD: +23%

Novo Nordisk (NYSE:NVO)

Novo Nordisk is a global healthcare company with more than 90 years of experience. The company focuses on new treatment for diabetes, as well as bio-pharmaceuticals and therapeutics for disorders associated with haemostasis, inflammation, and pancreatic cancer. They also manufacture protein delivery devices and systems for diabetes patients. Novo Nordisk joined forces with collaborating partners, CAT, CP Kelco, Novozymes, DONG Energy, the Danish Technical University (DTU) and the University of Copenhagen in February with the common goal of reducing energy consumption and the amount of raw materials used in biotechnological production. Novo Nordisk increased operating profit by 18% in the first quarter of 2013. YTD: +1.4%

AbbVie Inc. (NYSE:ABBV)

AbbVie is a research-based pharmaceuticals company that discovers, develops, and markets advanced therapies for a variety of common diseases like Parkinson’s disease, thyroid disease, kidney disease, Crohn’s disease, and human immunodeficiency virus (HIV). AbbVie’s extensive array of products includes Lupron, HUMIRA, Simdax, Vicodin, and Zemplar. So far, AbbVie biotech stock has experienced slow, but steady growth. However, this biotech stock has high-potential for significant growth in 2013. Last October, the company initiated a comprehensive Phase III program for hepatitis C virus genotype one that is sure to increase revenue. AbbVie and Alvine Pharmaceuticals (a leader in celiac disease therapeutics development) also announced they have entered into a global collaboration to develop a new oral treatment for patients with celiac disease. YTD: +28%

AstraZeneca (NYSE:AZN)

AstraZeneca focuses on six primary areas of therapeutics; cardiovascular, neuroscience, gastrointestinal, oncology, respiratory, and infectious. They create, manufacture, and distribute over 50 different prescription products including Brilinta, Diprivan, Nexium, Sensorcaine, Xylocaine, and Zomig nasal spray. AstraZeneca experienced a big boost at the end of the last quarter for 2012 when the demand for the new heart drug Brilinta skyrocketed from $38 million to $51 million. Their revenue and stock recently dropped in the first quarter of 2013, but the right acquisition could quickly turn things around. YTD: +6.9%

Celgene Corporation (NASDAQ:CELG)

Celgene is a global bio-pharmaceutical company focused on the discovery, development, and distribution of products used for the treatment of various immune and inflammatory disorders, as well as several types of cancers. The products they distribute include Arbaxane, Pomalyst, Istodax, Thalomid, Revlimid, and Vidaza. They generate $5.5 billion in revenue. Celgene released data from its ongoing Phase III trial of Apremilast earlier this year, which shows the drug successfully reduces psoriatic arthritis symptoms by up to 20% compared to the placebo. This should continue the upward trend of Celgene’s biotech stock. YTD: +73%

Biogen Idec Inc. (NASDAQ:BIIB)

Biogen Idec offers various treatments for different cancers, autoimmune-inflammatory diseases, and multiple sclerosis. Their pharmaceutical products include Avonex, Fumaderm, Rituxan, and Tysabri. Biogen’s biotech stock has quickly risen 34% from its February $155.40 flat-base buy point and has experienced consistent growth in their EPS (earnings per share) for the past eight years. Their success is estimated to continue with more than 20% gains for 2013 and again in 2014. YTD: +54%

Takeda Pharmaceutical Company Limited (TYO:4502)

Takeda Pharmaceuticals manages the research and development of products to treat patients who suffer from cardiovascular disease, diabetes, prostate cancer, and gastroenterology. Their product line includes Actos, Amitiza, Benet, Enbrel, Prevacid, and Uloric. Takeda recently announced that it would be acquiring Inviragen (a bio-pharmaceutical company specializing in vaccines for infectious diseases). Many investors feel this will drive the stock upwards since it strengthens their position and aligns them with a world-class leader in the fight against dengue. Dengue is a serious mosquito-borne illness that threatens the lives of nearly half the world’s population. YTD: +21%

Teva Pharmaceutical Industries Ltd. (NYSE:TEVA)

Teva Pharmaceutical is the largest generic drug manufacturer in the world and specializes in medications to treat respiratory disorders, central nervous system diseases like Parkinson, chronic lymphocytic leukemia, and pain relievers for muscle spasms in musculoskeletal conditions. The company’s biggest-selling drug is Copaxone for multiple sclerosis, which is expected to face extensive competition from a recently launched alternative from Biogen Idec. Teva is also due to launch a new product line later this year which includes a generic version of Amgen anti-infection drug Neupogen. YTD: +10%

Allergan, Inc. (NYSE:AGN)

Allergen is a healthcare company that discovers, develops, and commercializes various medical devices, biologics, over-the-counter consumer products, and a diverse range of pharmaceuticals. One of their most well-known products is Botox, but they are also providers of the increasingly popular adjustable gastric banding system, LAP-BAND. Allergen’s other products include Restasis, Tazorac, and the Refresh brand of artificial tears. Allergan’s growth has been recently started to slow down. Allergen however is a relatively stable biotech stock. YTD: -1.4%

Valeant Pharmaceuticals International Inc. (NYSE:VRX)

Valeant Pharmaceuticals handles the development and marketing of medications used in the fields of dermatology, neurology, and infectious diseases. In March of 2012, Valeant acquired a 19.9% minority equity investment in Pele Nova Biotecnologia S.A and in April of this year, they acquired the entire share capital of Obagi Medical Products Inc. These are both strong signs that this is a company focused on growth and expansion. Their revenue also rose significantly this year and is almost at $1.04 billion. YTD: +52%

Regeneron Pharmaceuticals Inc. (NASDAQ:REGN)

Regeneron is a bio-pharmaceutical company that invents, develops, manufactures, and distributes medicines for the treatment of several different serious disorders. They produce Eylea for neovascular macular degeneration, Arcalyst injections for Cryopyrin-Associated Periodic Syndromes (CAPS), and Zaltrap for metastatic colorectal cancer. Eylea, in particular, has been a factor in their positive gains. The company has been on a consistent upswing, reporting total revenues of $440 million compared to the $232 million generated during the corresponding quarter of 2012. YTD: +56%

A ZocDoc IPO? Could it be the next big thing in tech?

If backing from Digital Sky Technologies and Goldman Sachs isn’t enough, here are three reasons why a ZocDoc IPO would probably be a good buying opportunity.

Every now and then, a Web site comes along that makes you wonder why it didn’t exist years ago. That’s how I felt when I learned about ZocDoc.com – an online booking system that lets you search for a doctor nearby who can see you right away.

Calling your doctor and scheduling an appointment three days in the future could be a thing of the past. Of course, it also means you might need to see a doctor who doesn’t know your name. Does that matter, though, when you’re sick and eager to get better?

Here are three reasons why a ZocDoc IPO (if there’s even one on the horizon) might be a good buying opportunity:

1) Investors are already knocking on ZocDoc’s doors. ZocDoc’s one of several companies that were identified as “rising stars” on SecondMarket – a site where users can buy shares in private companies (see our post How to buy stock on SecondMarket for more). While ZocDoc doesn’t have any shares available on SecondMarket yet, it’s one of the top three social sites SecondMarket users want the opportunity to invest in (behind only Pinterest and Practice Fusion).

2) Rapid growth. ZocDoc’s already got 1.2 million users a month in 17 markets (per CNBC), and the company plans to roll out nationwide next year. ZocDoc’s pushing for rapid growth (rather than an early IPO) to try to get a head start on copy-cat entrepreneurs, CEO Cyrus Massoumi told CNBC. An IPO would presumably come after the nationwide rollout.

3) Big backers. ZocDoc has already raised $95 million since launching in 2008. $50 million came from well-known venture capitalist firm Digital Sky Technologies. What’s really interesting, though, is the source of another $25 million. Apparently, it came directly from Goldman Sachs (per Beta Beat). That’s an nontraditional move that shows Goldman really likes what they see at ZocDoc.

4) A viable business model. Unlike a lot of tech start-ups, ZocDoc has a well-defined, easy-to-understand business model: the company pulls in $250 a month for every doctor that’s listed on its site. Should ZocDoc firmly establish itself as the online leader in its niche, it would have the sort of steady cash flows most websites dream about.

One of my favorite parts about the company is that Massoumi – the company’s co-founder – seems to understand that it needs to stay laser-focused on doing one thing and doing that one thing very well.

“We have one of the best lists of practicing physicians in the country right now,” Massoumi told Venture Beat. “That is an incredibly valuable rolodex, and people are always asking us to partner with them on that data. But we believe our success comes from our single minded focus, and we’re sticking to that.”

Ignoring short-term gains at the expense of doing one thing very well is the key to success that we’ve seen at companies like Instagram and Pinterest. ZocDoc understands that, and my guess is it’ll help them make the transition from start-up to a company with true staying power.

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The Baby Boomer stock shock and what you can do to avoid it

A prolonged sell-off in the stock market thanks to the retirement of waves of Baby Boomers could mean stock prices won’t recover to their 2010 levels until 2027.

Two researchers buried amid reams of data at the Federal Reserve Bank of San Francisco emerged recently with a disquieting prediction: the first great wave of Baby Boomer retirements is going to push down stock prices for the next 10 years. According to researchers Mark Spiegel and Zheng Liu, stocks in 2021 could be worth 13 percent less than were in 2010.

Worse than that, Spiegel and Liu don’t expect stock prices to fully recover to their 2010 levels until 2027. I’ve dubbed it the Baby Boomer stock shock, and its had me exploring ways to protect my capital over the next 16 years.

Born between 1946 and 1964, Baby Boomers are the single largest demographic in America, and they make up fully 25 percent of the population. The youngest Boomer is now 44 years old, and the oldest Boomers should start qualifying for retirement benefits this year. According to Speigel and Liu, those Boomers are going to start selling shares they’ve spent decades accumulating, and that’s going to drive down the overall stock market.

How to avoid the Baby Boomer stock shock

While the overall stock market might suffer from prolonged selling as Boomers cash in their equities, stocks that specifically cater to an older population could be poised to outperform. JPMorgan Chase & Co. (NYSE:JPM) has actually put together a list of just such stocks. Dubbed the Aging Population Index, this group of 21 stocks has outperformed the S&P 500 six out of the eight past years (per the Financial Post).

The index is heavily weighted toward healthcare (at 48 percent), consumer discretionary items (at 33 percent) and financial stocks (at 14 percent). Among the companies?

Royal Caribbean Cruises Ltd. (NYSE:RCL). Stress-free trips on clear blue Caribbean waters. Just what the doctor ordered. There are even a handful of retirees who have opted to live out the rest of their days on cruise ships (per Snopes). The industry’s been working hard at appealing to younger travelers, but their bread and butter for the next 20 years will be Boomers.

Chico’s FAS, Inc. (NYSE:CHS). With a clothing line that’s specifically targeted at high-income women over 35, the company’s stock is up more than 123 percent over the past 10 years (not counting three stock splits earlier in the decade). Chico’s designs its clothes with a toned-down color palette and fills its racks with sizes aimed at “plumper” figures.

Sun Healthcare Group Inc. (NASDAQ:SUNH). One of Sun Healthcare’s largest businesses is SunBridge, which operates more than 200 nursing homes and post-acute care centers. All told, SunBridge houses 22,000 beds in 25 states, and that number should start accelerating rapidly 10 years from now. The average age upon admission to a nursing home is 79 (per PBS.org). As Boomers start aging, long-term care will be inevitable for many.

The Scotts Miracle-Gro Company (NYSE:SMG). The National Gardening Association pegs the average age for gardeners at 55 (per Mlive.com). Companies like Miracle-Gro that cater to that niche are in the fat part of the growth curve. The oldest Boomers are still gardening and the youngest Boomers could just be getting started.

In general, Boomers won’t be fully liquidating their portfolios, but they probably will be moving from high-risk sectors like tech into stable, dividend-paying stocks. Keep the macro-trend in mind, and you should fare better than the S&P in the years to come.

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Why invest in silver?


Stock market crash looming on horizon?

The 30 percent plunge in silver prices over the past two weeks could be an early warning signal that there’s something going wrong in the markets. I’d even go so far as to say it’s starting to look like 2008 out there.

The 30 percent plunge in silver prices over the past two weeks could be an early warning signal that there’s something going wrong in the markets. I’d even go so far as to say it’s starting to look like 2008 out there. That’s got a lot of investors moving into defensive positions, and that doesn’t bode well for stocks. Here are five signs that it might be time to lighten up your portfolio:

1) New margins on the CME. Changes in initial margin requirements for Comex silver futures have gotten most of the press. A series of recent hikes drove silver margins up 84 percent in just 8 days. What’s gotten slightly less press is the news that the CME Group didn’t limit their margin hikes to silver alone. Margin requirement for crude oil climbed from $6,750 to $8,438 on Tuesday, May 10. The United States Oil Fund LP ETF (NYSE:USO) is down 12 percent since the start of the month. “Increases in margin requirements have a history of triggering selling,” David Kotok, the Chief Investment Officer at Cumberland Advisors, writes at FinancialSense. Kotok noted that his fund is raising cash on the heels of the CME Group’s “game-changing” margin hikes.

2) Bullish on healthcare. It’s always a bad sign when investors start moving into healthcare stocks. Like utilities, the sector is one of few that consumers can’t cut back on when times get tight. Consider this: of the 10 S&P sectors, healthcare has performed the best this year. It’s up 14.9 percent, per Reuters. A lot of people with a lot of money apparently see signs that it’s time to get defensive.

3) The end of QE2. The Fed’s still doing its best to inject more money into the economy with QE2, but we all know that program’s due to end next month. When it does, the cash sloshing around in the stock markets could dry up quickly (just as it did at the end of QE1). Credit Suisse expects at least a 10 percent drop in equities at the end of QE2, according to Reuters. Value investor Jeremy Grantham’s calling for a 30 percent drop in stocks.

4) Weekly Leading Index. The Weekly Leading Index (WLI) from the ECRI (Economic Cycle Research Institute) is closely watched by professional traders thanks to its ability to forecast economic growth. In recent weeks, the WLI has flattened and slowly started edging downward – most recently from 6.6 percent to 6.4 percent. It’s an indication that economic growth is slowing. If regional manufacturing reports due out this week from New York and Philadelphia confirm the trend, the bears could again take the upper hand. And they just might as manufacturers suffer with higher input costs thanks to rampant energy inflation.

5) The debt ceiling debate. For all the drama surrounding the debt ceiling debate, I think Washington realizes they’re truly jeopardizing faith in the dollar. If the ceiling isn’t raised, it would be tantamount to a default on U.S. debt; something that even the most hard-line Tea Party member should realize isn’t a good thing. Even Speaker of the House, John Boehner (R-Ohio), has said as much: “They’ve pushed the date back, pushed the date back, pushed the date back. But it’s clear to me that at some point we’re going to have to raise the debt ceiling.” That should alleviate short-term fears of a bond default, and – coupled with the end of QE2 – move investors back into bonds and the dollar.

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WhiteGlove IPO: The next big thing in health care?

With an aging population and rapidly rising health care costs, WhiteGlove’s IPO might be one of the few bright spots in the health care industry.

WhiteGlove could very well be the next big thing in health care. Rather than making you trek to the doctor’s office or local Urgent Care, the company sends a nurse practitioner or phlebotomist to you for primary and chronic medical care whether you’re at home or work – and they do it 365 days a year 8 a.m. to 8 p.m. They can draw blood, do exams, order prescriptions for you and arrange to have them delivered; they can even offer you up a so-called “Well-kit” that’s stocked with chicken soup, crackers, Gatorade, applesauce, cough drops, and Kleenex.

While WhiteGlove’s yet to turn a profit, the trends look good and an IPO is in the works. When shares open up for trading, here are three reasons to consider investing in WhiteGlove stock:

1) Unique business model. WhiteGlove describes its business model as “Costo”-like. Member’s pay an annual fee to the company ($420) as well as a fixed flat rate ($35) for each visit at their home, office or hotel room. Visits cover just about any ailment that would prompt you to visit your family doctor: from the flu to sinus infections, vaccines and physicals.

In some cases, health insurance covers membership costs and visit fees although WhiteGlove doesn’t file claims itself. The company touts this as a way employers can lower overall health insurance costs (since the number of doctor’s visits covered by company health insurance plans are drastically reduced).

2) High demand. As of right now, WhiteGlove has 469,000 members and counting. Enrollment has surged by triple digit percentages in each of the past three years. That growth could mushroom as WhiteGlove looks to expand across the country. Right now, they’re in just seven cities across three states, but they claim to have identified more than 250 metropolitan markets that could prove profitable – and they plan to go after them aggressively, adding five to 10 new markets every year.

3) Profits on the horizon? Revenue growth at the company has been impressive. It surged 348 percent between 2008 and 2009, and another 178 percent last year to $4.01 million. Still, it’s important to note that WhiteGlove’s not profitable yet. The company lost $3.4 million in 2009 and another $5.4 million last year.

Startup costs and debt (which will be paid down with IPO proceeds) are skewing the numbers. According to WhiteGlove’s own models, the company needs just 2,391 members in a new market to break even.

“At 20,000 Membership Service enrollments in a market, we estimate approximately $761,000 per quarter in gross profit and approximately $530,000 per quarter in operating profits,” the company writes in its SEC filing. “As the number of Membership Service enrollments increases, the gross profits and operating profits continue to increase.”

Growing health care costs could drive up WhiteGlove’s membership numbers, especially considering the fact that they set flat visit fees and consciously aims to treat chronic conditions including high blood pressure, diabetes and thyroid problems that require frequent doctors visits. With an aging population and rapidly rising health care costs, WhiteGlove might be one of the few bright spots in the health care industry.

WhiteGlove ticker symbol: NYSE:WHCH

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Five stocks picks for 2011 from John Paulson

After returning as much 590 percent betting against mortgages in 2007, John Paulson’s looking toward precious metals, energy and housing in 2011.

Hedge fund manager John Paulson became an icon in the investing world when he made a huge wager against subprime mortgages in 2007. That year, his funds gained as much as 590 percent, according to the Wall Street Journal.

Paulson’s 2010 returns ranged between 11 percent and 45 percent compared with the 15 percent gain the S&P locked in. That was enough to net Paulson himself some $5 billion. Here’s a look at where he’s making his bets for 2011:

1) Precious metals. For several years now, Paulson’s been urging investors to buy gold. Just based on monetary expansion alone, he said last year, gold could hit $2,400 an ounce. Tack on significant inflation on top of that, and gold prices at $4,000 an ounce aren’t out of the question. Paulson’s gold positions in 2010 netted him a return of 45 percent, and he’s still optimistic that gold will outperform for the next 5 years calling it “the ideal vehicle to hedge against the risk of the U.S. dollar,” Forbes reports.

Among Paulson’s biggest gold positions last year were AngloGold Ashanti Limited (NYSE:AU), Osisko Mining Corp. (TSE:OSK) and the SPDR Gold Trust ETF (NYSE:GLD). Currently, his funds own securities that represent the rough equivalent of 96 metric tons of the metal, according to the New York Times. That’s more gold than the Australian government holds.

2) Internet security. Of the top positions initiated by Paulson as of Sept. 30, 2010, McAfee, Inc. (NYSE:MFE) made the list. McAfee, which makes antivirus software, firewalls and other software-based security for computers, made headlines after a buyout by Intel Corporation (NASDAQ:INTC) was announced in August. Paulson’s reputation as a macroeconomic investor makes it clear where he sees big opportunities for growth: protecting data from hackers.

3) Oil and natural gas. Paulson has jettisoned his position in banks in favor of energy stocks. Chief among his energy holdings going into 2011? Anadarko Petroleum Corporation (NYSE:APC), the Texas-based oil and natural gas producer. It’s returned 20 percent over the past three months.

4) Biotechs. Genzyme Corporation (NASDAQ:GENZ) also made the list of top stocks that Paulson was acquiring late last year. Another buyout target, Sanofi-Aventis SA (NYSE:SNY) appears close locking in a deal to buy Genzyme. Trend anyone?

5) Housing. Paulson argued late last year that it was the best time to buy a house in 50 years. “If you don’t own a home, buy one,” he said at a lecture for New York’s University Club. “If you own one home, buy another one, and if you own two homes buy a third and lend your relatives the money to buy a home.” Can’t buy a home? Consider some beat-down real estate or construction stocks. A few good picks and you, too, might be on your way to earning $5 billion a year.

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Healthcare giant Pall Corporation (NYSE:PLL) to set tone for sector

Pall Corporation’s CEO Eric Krasnoff seems optimistic that a global recovery is underway. We’ll see how right he is when his filtration company reports earnings after the bell today.

What’s good for Pall Corporation (NYSE:PLL) is good for the health care and water industries writ large. A New York-based provider of filters, separators and purifiers for liquids and gases, Pall serves the manufacturing and health care industries. Analysts are expecting the company to announce earnings of $0.64 per share after the bell today.

That’s well above last quarter’s $0.58 per share, and it comes on the heel’s of some big contracts the company has landed with New Brunswick Scientific, the city of Calexico, California, and, most recently, a big contract with Abu Dhabi Gas Industries Ltd. (GASCO).

Pall Corporation did issue $375 million in senior notes at 5 percent recently (to pay off higher-interest notes due in 2012), and offer guidance in the “low single digits” for the forth quarter. All told, Pall expects EPS of $1.97 for fiscal 2010. Earnings of $0.64 per share this quarter would put them well on the way to hitting $1.97 per share for the year.

The company’s biggest growth of late has been in its “microelectronics” department where revenue jumped 89 percent. Increased global industrial demand is where the real profits are, though, and CEO Eric Krasnoff was confident industrial demand is going to keep growing.

“The expected industrial recovery appears to now be firmly under way,” Krasnoff said in a press release last quarter. Let’s hope he’s right; not just for Pall, but the economy at large.

Will MDS Inc. (NYSE:MDZ) finally be profitable?

New revenue streams for MDS Nordion (MYSE:MDZ) won’t be reflected in today’s earnings report, but it’s a big step in the right direction. Re-inventing a company takes time and money, after all. And sometimes it takes a lot longer and costs a lot more than investors would like.

After losing more than $750 million over the past year, could this be the quarter that Canadian Biotech company MDS Inc. (NYSE:MDZ) finally turns things around? MDS will report their earnings after the bell today, and analysts are expecting a loss of $0.01 per share (or roughly $670 million).

The company’s been in a reinvention phase after announcing the sale of its Analytical Technologies and Pharma Services businesses in September of 2009. Analysts keep thinking MDS will turn the corner after absorbing costs associated with the sale, but the company still seems mired in lingering costs. Last quarter, analysts expected a loss of $0.06 per share. Instead, MDS reported a loss of $0.51 per share.

“While the Company’s focus is now solely on the MDS Nordion business, as well as Corporate and Other functions, transactions associated with the strategic repositioning continue to have a significant impact on continuing operations,” MDS said in a press release at the time.

Hopefully, last quarter’s big write-off will prove enough to help MDS return to profitability – a state the company hasn’t seen since June 2009.

MDS has gotten some good news in recent months, at least. Atomic Energy of Canada Ltd., which owns and operates the National Research Universal reactor, began shipping isotopes to MDS Nordion in Ottawa last month. MDS processes the isotopes before sending them on to hospitals across the country.

That will re-start a revenue stream for MDS that was shut off for 15 months for cleaning. That’s big news as MDS Nordion leads Canada’s molecular imaging and radiotherapeutics market. Of course, the change won’t be reflected in today’s earnings report, but it’s a big step in the right direction. Re-inventing a company takes time and money, after all. And sometimes it takes a lot longer and costs a lot more than investors would like – particularly when nuclear reactors are involvedd.

Time to buy Sunrise Senior Living, Inc. (NYSE:SRZ)?

Was the move in Sunrise Senior Living, Inc. (NYSE:SRZ) stock too much, too fast? Probably.

Shares in Sunrise Senior Living (NYSE:SRZ) exploded yesterday, rising 66 percent in a single trading session. The move came on news that the company would sell eight of nine of their assisted living facilities in Germany to GHS Pflegeresidenzen Grundstucks GmbH and Prudential Real Estate Investors. The deal was worth $74.5 million with the funds going to pay off debt on the property.

The move will strengthen Sunrise’s balance sheet, but it doesn’t point to any future growth in the company and that makes Sunrise look like a great short play. The deal was worth $74.5 million, but the stock rose $81.6 million in market cap yesterday. Too much, too fast? Probably. Especially since the company isn’t directly pocketing any cash in the deal.