Three Stocks For The Long Haul: NetEase, Inc (ADR) (NTES), Tenet Healthcare Corp (THC), ISIS Pharmaceuticals, Inc (ISIS)

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However, the Activision Blizzard story may just be a smoke screen for NetEase.com success, namely of its in-house gaming products.  The Chinese gaming market is well on its way to rivaling the U.S. market in revenue, with $10 billion generated in 2012.  NetEase.com reported $1.2 billion in revenues for last year, which was a 12% gain on the previous year.  Quarter-over-quarter earnings gained 14%, with new two in-house games: Kung Fu Master and Heroes of Tang Dynasty II, coming on stream in the latter part of the year.  NetEase.com doesn’t quote specific figures for individual games, but were “particularly” satisfied with games like Kung Fu Master, and would look to invest more resources to develop it through game expansions.

Finally, ISIS Pharmaceuticals, Inc. (NASDAQ:ISIS) was featured in September last year. The stock suffered heavy selling prior to its FDA pre-approval announcement for KYNAMRO. The stock ultimately went on to lose 40% as clinical trials pointed to a number of side effects with the drug, which threatened final approval for the drug.  However, investors took this opportunity to buy into what ultimately proved to be a successful FDA drug approval at the end of January.

What’s interesting about the KYNAMRO approval process was that the worst of the selling, and the best of the buying, happened before the FDA announced.  The official FDA announcement boosted the stock, but the bulk of the gains were already banked at that point.  Ultimately, the stock is down just 2% from when I covered it in September, but it’s had quite the ride between then and now! Despite this, the company will have to manage revenue expectations for a drug with significant side effects.  Approval is good news, but investors may want to be conservative in their expectations for the first revenue year.  This conservative outlook may lead to a ‘negative’ reaction in price, but it could also be an opportune time for building a position in the stock.

ISIS Pharmaceuticals competes in the RNA space with Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY). While market evaluations of the two companies are about equal at $1.5 billion, ISIS Pharmaceuticals, Inc. (NASDAQ:ISIS) has a significantly higher number of Phase II and Phase III products in the pipeline.  ISIS Pharmaceuticals also enjoys a higher revenue stream than Alnylam Pharmaceuticals, and this will improve with KYNAMRO.  The chief concern for Alnylam Pharmaceuticals is the insider selling, particularly an offload by Alnylam Pharmaceuticals’ largest shareholder, Novartis AG (ADR) (NYSE:NVS). ISIS Pharmaceuticals could benefit from rotation out of Alynylam Pharmaceuticals should sellers turn up the heat in the latter stock.

The article Three Stocks For The Long Haul originally appeared on Fool.com and is written by Declan Fallon.

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