01/07/2005 12:00 am EST
Jamie Dlugosch successfully balances the sizzle of growth stocks with the relative stability of value in creating his model portfolios. For his Top Pick, however, he leans towards the speculative side with a play on the controversial field of stem cell research.
"Notwithstanding the re-election of George W. Bush, stem cell research continues to power forward. While widespread opposition to the use of stem cells limits its progress, advancements in medicine and treatments as a result of such research cannot be stopped. Offering hope for everything from spinal chord injury to diabetes, the potential benefits appear to clearly offset the negatives of stem cell usage.
"My stock of the year, Geron Corp. (GERN NASDAQ), with 240 stem cell patents, is uniquely positioned to benefit from developments in this exciting area of medical research. Widespread coverage of the stem-cell debate negated nearly 50% of GERN’s market cap in 2004 and offers investors a chance to scoop up shares at a discount. Earnings are negative, but are expected to show marked improvement in 2005. With large pharmaceuticals struggling mightily, I expect companies such as GERN to benefit greatly. GERN is well capitalized with tremendous market potential. I would buy up to $9 per share. My target is $18."