ACADIA Pharmaceuticals Inc. (ACAD), Rite Aid Corporation (RAD), Questcor Pharmaceuticals Inc (QCOR): Are Any Of These Top Performers A Sell?

The company’s net sales of Acthar rose 64% year-over-year in the quarter, as introductions into new markets fueled growth. The company continues to test Acthar on other diseases, and with trailing 12 month sales of $550 million, Acthar could still triple before reaching peak sales.

At 11.5 times next year’s earnings, Questcor Pharmaceuticals Inc (NASDAQ:QCOR) is far from being expensive. In addition, the company buys back shares and pays an annual dividend of 2%. In my opinion, the future is bright for this company, and I’m going to be along for the ride.

Getting A Little Pricey

I bought Anika Therapeutics, Inc. (NASDAQ:ANIK) back in February at $12.22, after the company posted a strong quarter, and I felt it was undervalued. Since then, Anika Therapeutics, Inc. (NASDAQ:ANIK) has produced gains of 108% and has added 96.5 points to my CAPS.

In the final two days of last week, Anika traded higher with gains of 35%. The company responded with yet another strong quarter where revenue grew 6%. Overall, the company had a very solid quarter, which is what Anika investors have grown accustom to seeing with the company.

The problem with Anika Therapeutics, Inc. (NASDAQ:ANIK) is that it is not a high-growth company nor will it produce rapid growth in the near future. At 4.55 times sales and 23 times next year’s earnings, I do think the stock has gotten pricey. Therefore, with top-line growth of less than 10% year-over-year, I am not sure that it’s worth the premium, thus I am comfortable in taking a large profit off the table.

Final Thoughts

All of my CAPS picks, and investments, are based on the value-finding formulas in my book “Taking Charge With Value Investing (McGraw-Hill, 2013)”. While finding value is very important to success, the ability to reassess your position and know when to sell is equally important.

As of now, I still think Rite Aid Corporation (NYSE:RAD) has the most short-term upside. ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD) is in a waiting period before its FDA approval next year, but Rite Aid should see continued benefits of new generic introductions – pushing margins even higher.

With Rite Aid, the company’s significant discount to its industry still exists, and as improvements continue, I think Rite Aid could trade several times higher.

The article Are Any Of These Top Performers A Sell? originally appeared on Fool.com and is written by Brian Nichols.

Brian Nichols has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Brian is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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