The biotech analysts at PropThink always try to handicap the best and worst scenarios on the stocks they cover. PropThink is an intelligence service that delivers long and short trading ideas to investors in the health care and life sciences industries. Their focus is on identifying and analyzing technically complicated companies and equities that are grossly overvalued or undervalued.

Here are some current stocks the PropThink analysts are covering. Investors should remember that these names can be highly speculative and are not suitable for conservative portfolios.

AVEO Pharmaceuticals Inc. (NASDAQ: AVEO) may be a micro-cap stock to buy. An advisory panel vote went against the company recently, but it may be a bottom-fishing candidate. Aveo is a developmental stage biotech company, with its leading product candidate designed to treat renal cancer. Seth Klarman’s Baupost Group hedge fund owned 4.9 million shares at the beginning of this year. The Thomson/First Call price target is $2.90.

Onyx Pharmaceuticals Inc. (NASDAQ: ONXX) is a company with huge momentum. For its most recent quarter, Onyx delivered a doubling in revenue from the previous year to $145.5 million, with practically all the gains coming from its multiple myeloma drug Kyprolis. The consensus price target for the stock is $106.

Celgene Corp. (NASDAQ: CELG) hit a new 52-week high this week. The company recently reported data from its ongoing phase III trial of apremilast this month, showing the drug successfully reduced psoriatic arthritis symptoms by at least 20% versus placebo. The consensus target is at $140.

Regeneron Pharmaceuticals Inc. (NASDAQ: REGN) is another name that has been on a huge roll. Regeneron is an integrated biopharmaceutical company that focuses on development of new candidates for serious ailments primarily in areas like ophthalmology, inflammation, cancer and hypercholesterolemia. The consensus for the stock is at $288.50.

MAKO Surgical Corp. (NASDAQ: MAKO) is an intriguing stock to the PropThink team, although not yet listed as a stock to buy. MAKO Surgical is a medical device company that markets its advanced robotic arm solution, joint-specific applications for the knee and hip, and orthopedic implants for orthopedic procedures in the United States and internationally. The consensus price target is $12.

ViroPharma Inc. (NASDAQ: VPHM) is expected to deliver growth despite a poor quarter. ViroPharma’s commercial and pipeline progress is on track, with new timelines announced for several clinical programs. With its lead drug Cinryze continuing to show growth and what appears to be growing market share, the company is moving beyond the loss of its Vancocin franchise. The consensus price target for the stock is $33.

Cubist Pharmaceutical Inc. (NASDAQ: CBST) is the ultimate binary event play. With a critical court decision pending, the stock could have tremendous movement, depending on the outcome. Cubists’ primary revenue drug Cubicin (daptomycin), which is an injectable antibiotic with nearly $1 billion in sales, is being challenged by a generic drug manufacturer. Investors need to be very careful here. The consensus price target for the stock is $52.50.

With a penchant for large-cap names with huge momentum and small-cap names on the verge of a big success, PropThink offers a good balance of biotech information and data. Again, investors should remember that some of the highly speculative stocks may be totally unsuitable for conservative portfolios. With that caveat in place, some of the names could also lead to spectacular gains.

In a close examination of their stocks to buy, Merrill Lynch analysts sought to (1) point out possible product launches and (2) highlight important milestones, including potential threats for the companies in their coverage universe. The firm also summarized quarterly growth and margin trends and provided a valuation snapshot for each company. Here are the stocks to buy from Merrill Lynch.

AbbVie Inc. (NYSE: ABBV) seems to be on the radar at most major Wall Street firms, despite the fact that 50% of all revenues are from one drug (Humira). Merrill Lynch is bullish on the stock given its attractive valuation, above-average dividend yield, and the potential for the pipeline to deliver a blockbuster hepatitis C (HCV) franchise over the medium term. Their price target for the stock is $49. The Thomson/First Call consensus target is $45.50. Investors are paid a 3.60% dividend.

Bristol-Myers Squibb Co. (NYSE: BMY) is a stock to buy. Merrill Lynch analysts do have some concern over the pipeline of future products. They believe that pipeline setbacks could pressure the stock, but a solid dividend yield should limit downside risk. The Merrill Lynch price objective for the stock is $45. The consensus target is much lower at $38. Investors receive a 3.50% dividend.

Eli Lilly & Co. (NYSE: LLY) is considered a “sum-of-the parts” stock to buy. Continued strong cash flow generation, a focus on shareholder return through a stable dividend, expense control and potential for positive pipeline news could improve sentiment over time and lead to multiple expansion. The Merrill Lynch price target is $65. The consensus is, again, much lower at $57. Shareholders are paid a 3.60% dividend.

Merck & Co. Inc. (NYSE: MRK) is a stock to buy with characteristics similar to the Eli Lilly story. Merrill Lynch analysts are looking for continued strong cash flow generation, focus on shareholder return through a stable dividend (with potential for growth) and share buybacks, and potential for positive pipeline news could improve sentiment over time and lead to multiple expansion. The Merrill Lynch price target for the stock is $53, while the consensus is at $51. Investors are paid a 3.80% dividend.

Pfizer Inc. (NYSE: PFE) rounds out the list of large cap stocks to buy. With a solid current revenue base and a growing pipeline, Pfizer may have the most potential of the stocks to buy. The Merrill Lynch price target is $33. The consensus is $32. Shareholder are paid a 3.30% dividend.

While the Merrill Lynch report did not assess macro issues, which can play an important role in driving stock performance, it was very helpful for company-specific analysis. Combining strong growth potential with consistent and possibly rising dividends, make large cap pharmaceutical stocks a good bet for any portfolio.

Through an arrangement with CVS Caremark Corp. (NYSE: CVS), patients who have a valid prescription for Viagra will be able to order the medication online. Other treatments for erectile dysfunction like Cialis from Eli Lilly & Co. (NYSE: LLY), Levitra and Staxyn from GlaxoSmithKline (NYSE: GSK) and Germany’s Bayer A.G., Stendra from Vivus Inc. (NASDAQ: VVUS) and Zydena from South Korea’s Dong-A are likely to be the first followers as patients with prescriptions for these drugs may want to avoid the stigma — real or imagined — attached to purchasing these drugs in person.

But the makers of other drugs will be watching as well. By selling direct, drug makers avoid two problems. First is counterfeiting. Viagra, which sells by prescription for $25 a tablet, is often faked by online sellers and sold as the real thing. That damages the drug’s brand and keeps profits out of Pfizer’s hands.

Second, Pfizer will not undersell its distribution chain, at least not yet, meaning that the company will put more profit in its pocket. For Viagra, with sales of $2 billion a year, the company may realize some additional profit, but by promoting Web sales as offering “real Viagra,” Pfizer is offering a guarantee that the knock-off sites cannot match.

Makers of weight-loss drugs will be watching Pfizer’s Web sales closely, and these may be the next drugs to hit the market directly from manufacturers to patients. Drugs like Viagra attract more Internet searches from men and weight-loss medications more searches from women than any other medications.

If Pfizer can pull this off, it could decide to extend Web sales for other drugs or it could promote sales from online pharmacies like CVS or Walgreen Co. (NYSE: WAG). Once again, the Internet changes everything.

A new list compiled by Drugs.com for the first quarter of 2013 shows that all but one of the seven drugs with $1 billion in quarterly sales saw total sales gains. Only three of the wider list of the top 20 drugs in quarterly sales posted negative sales trends. You will notice that many of the drugs had negative unit (prescriptions) trends again in the first quarter, but this was seen by and large a year ago as well.

We used data from Drugs.com, and this represents the top-selling drugs and medicines measured as U.S. national sales through both retail and hospital channels. This list is for the first quarter of 2013, and we have provided an image of the top drug sales on a chart below.

Abilify by Otsuka Pharmaceutical Co. led the list, at $1.526 billion in quarterly sales with a 3.24% gain. What is interesting here is that the number of units sold in the quarter was shown to be down by 5.89% to 2.477 million units sold, despite a continual rise in total sales. This will seem sad to be the list leader to many people, because Abilify is prescribed as an add-on drug treatment for adults with unresolved symptoms of depression after at least six weeks on an antidepressant. It is also meant to be taken in addition to an antidepressant rather than as a standalone drug.

Nexium by AstraZeneca PLC (NYSE: AZN) was second on the list, at $1.458 billion in quarterly sales with a 1.21% gain. After a small uptick in dollars sold, there was actually a small drop of 2.47% in units to 6.667 million units in the quarter. Nexium is known as the Purple Pill to treat heartburn caused by acid reflux.

Cymbalta by Eli Lilly & Co. (NYSE: LLY) came in third on the list, with $1.296 billion in quarterly sales after a 5.65% gain. Cymbalta units fell by 2.09% to 6.502 million units. Cymbalya is meant to treat major depressive disorder (MDD), generalized anxiety disorder (GAD), for the management of diabetic peripheral neuropathic pain and fibromyalgia, and to manage chronic musculoskeletal pain due to chronic osteoarthritis pain and chronic low back pain.

Crestor by AstraZeneca PLC (NYSE: AZN) was fourth, with quarterly sales of $1.295 billion after a 1.59% gain. Unit sales were down by 2.93% to 4.106 million units in the first quarter. Crestor is prescribed (along with diet) to lower high cholesterol and to slow the buildup of plaque in arteries.

Advair Diskus by GlaxoSmithKline PLC (NYSE: GSK) came in at number five, at $1.277 billion in sales after a 6% rise. This was the first of the list with a per unit gain, with sales up 1.81% to 5.959 million units. Advair Diskus is for the treatment of asthma in patients four years and older. It is approved for adults with chronic obstructive pulmonary disease (COPD), including chronic bronchitis, emphysema or both.

Humira by Abbott Laboratories (NYSE: ABT) was ranked number six, with $1.217 billion in quarterly sales after a 0.91% gain. This drug’s unit sales were down by 5.68% to 631,000 units in the first quarter. Humira is prescribed for moderate to severe rheumatoid arthritis, moderate to severe chronic plaque psoriasis, moderate to severe Crohn’s disease, moderate to severe ulcerative colitis, ankylosing spondylitis, psoriatic arthritis and in moderate to severe polyarticular juvenile idiopathic arthritis.

Enbrel by Amgen Inc. (NASDAQ: AMGN) was the last of the top seven drugs with sales of more than $1 billion, at $1.075 billion in quarterly revenue. This was also the sole drug on the list that had a decline in total dollar sales, with a 1.22% drop. Enbrel even led the top drugs here on this list with a 6.83% decline to 969,000 units sold. Enbrel is indicated for moderate to severe plaque psoriasis, psoriatic arthritis and moderate to severe rheumatoid arthritis.

You probably noticed that there was a steady decline in unit sales in the first quarter. In most cases, this was also the case in the first quarter of 2012. It seems that the trend can be influenced by timing as well as by rotational use or by the public’s routine annual changes, more so than drug companies arbitrarily raising their prices each year to make up for lower unit sales.

We also have two runner-ups here that are close to $1 billion in quarterly sales. Remicade from Johnson & Johnson (NYSE: JNJ), under the old Centocor and Janssen unit, posted a 3.58% sales gain to $969 million. Copaxone from Teva Pharmaceutical Industries Ltd. (NYSE: TEVA) posted a 1.98% sales gain to $926 million.

Read also: Viagra to Be Sold Online Soon

Maybe the big pharmaceutical company figures it is easier to use a computer than to walk into a drug store. After all, contact lenses already are available on the Internet. Another theory is that men are embarrassed to let their local pharmacist know that they have an erection problem.

Whatever the reason, the Houston Chronicle reports on getting Viagra online:

Men still will need a prescription to buy the blue, diamond-shaped pill on viagra.com, but they no longer have to face a pharmacist to get it filled. And for those who are bothered by Viagra’s steep $25-a-pill price, Pfizer is offering three free pills with the first order and 30 percent off the second one.

Pfizer’s bold move blows up the drug industry’s distribution model. Drugmakers don’t sell medicines directly to patients. Instead, they sell in bulk to wholesalers, who then distribute the drugs to pharmacies, hospitals and doctors’ offices.

But the world’s second-largest drugmaker is trying a new strategy to tackle a problem that plagues the industry. Unscrupulous online pharmacies increasingly offer patients counterfeit versions of Viagra and other brand-name drugs for up to 95 percent off with no prescription needed. Patients don’t realize the drugs are fake or that legitimate pharmacies require a prescription.

Those fake drugs do not work, anyway.

Arena made its announcement last night when it reported first-quarter earnings. The company said it is “currently evaluating the best approach for submitting at a later date.”

Belviq is one of three new weight-loss drugs from different makers, and was the first new medicine of its kind to receive U.S. Food and Drug Administration (FDA) approval in 13 years. Qsymia, from Vivus Inc. (NASDAQ: VVUS) and Contrave from Orexigen Therapeutics Inc. (NASDAQ: OREX) are the others. Qsymia has also received FDA approval while Orexigen is expected to reapply for Contrave approval later this year or early next.

Arena is likely to have withdrawn its application in order to avoid being rejected by the European regulators. None of the three competing weight-loss drugs has been approved for use in Europe.

Shares of Arena are getting hammered in premarket trading this morning, down about 14.4% to $7.19, in a 52-week range of $2.32 to $13.50.

Shares of Vivus are up 2.7%, at $13.30 in a 52-week range of $9.86 to $31.21.

Before calling it a bubble, there are many things to consider. While there are some major ETFs in the sector, we have noted previously how these biotech ETFs are often misrepresented by their name, given the weightings and stocks they hold. Another issue is culling out the risky one-candidate companies from the established biotech leaders. A long-term comparison also can be made to drug giants for relative valuation and for dividends.

As far as why we are asking if a bubble is forming here, it is not just because these stocks have performed well. The four major U.S. biotech players are Amgen Inc. (NASDAQ: AMGN), Biogen Idec Inc. (NASDAQ: BIIB), Celgene Corp. (NASDAQ: CELG) and Gilead Sciences Inc. (NASDAQ: GILD). All four companies hit new all-time highs this last week.

24.7 Wall St. is taking a look at each for valuation metrics by market capitalization, forward earnings multiples, sales and earnings growth expected, and paring up the current stock price against the Thomson Reuters consensus price targets from Wall Street analysts.

Before we get into biotech, Pfizer Inc. (NYSE: PFE) and Merck & Co. (NYSE: MRK) need to be evaluated. Both drug giants were trading very close to multiyear highs going into earnings this week. Somehow the market did not anticipate that both companies were going to offer muted guidance ahead. Merck is now down almost $4 from its 52-week high of $48.78, and Pfizer is down more than $2 from its 52-week high of $31.15. Both stocks trade at 12 or 13 times the projected 2013 earnings estimates from Thomson Reuters.

What sets Big Pharma stocks apart from biotech stocks is that there is just no revenue growth expected this year, or next even, if the so-called patent cliff woes are mostly behind these companies. Pfizer’s common stock dividend yield is 3.2%, versus 3.6% for Merck. Only one of the major biotechs (Amgen) pays a dividend as the sector is still tracking for growth.

Amgen Inc. (NASDAQ: AMGN) took a beating after its earnings report last week. Even after being added to the Conviction Buy List at Goldman Sachs, the biotech giant is up 2% at $106.25 after a recent all-time high of $114.95. The firm’s price target is $130 now, with a consensus target from analysts down at $111.36 and a street-high target of $133 for Amgen. It took a sell-off for this stock to get back under the consensus price target. Amgen shares are still up 24% so far in 2013 after the recent sell-off. The good news is that Amgen trades at about 14.6 times expected earnings this year, but the bad news is that sales growth is projected to be less than 5% for this year and next. Amgen is not really expensive for a biotech stock, but it is missing that monster growth. Amgen also acts like a new Big Pharma stock now that its dividend yield is 1.8%.

Biogen Idec Inc. (NASDAQ: BIIB) is now down $10 from its recent all-time high of $226.18. It was removed from Goldman Sachs’ Conviction Buy List, but at $216.25 its consensus price target is all the way down at $202.56. Biogen’s multiple sclerosis franchise is now approaching a total domination in the field. It pays no dividend but is expected to post 16% to 17% sales growth in both 2013 and 2014. The problem that investors may face going forward is that valuation is stretched at more than 27 times the consensus 2013 earnings estimate, since this stock has risen a whopping 48% so far in 2013.

Celgene Corp. (NASDAQ: CELG) is down just over $10 per share from its recent all-time high of $128.52. The consensus price target of $124.69 is also under the most recent high, while the street-high price target is up at $143.00. What Celgene has going for it is that some market pundits expect its earnings to double by 2015 to 2016. Sales are expected to rise more than 10% for at least the next two or three years, as well. That being said, Celgene trades at about 21 times expected 2013 earnings estimates, now that shares have risen a whopping 50% so far in 2013.

Gilead Sciences Inc. (NASDAQ: GILD) is down about $5 from its recent all-time high of $55.16. Gilead trades at about 25-times expected 2013 earnings, and its shares are up by 37% so far in 2013. The consensus price target is above the prior high at $58.20, and the highest target price is around $70 for the HIV drug leader. Sales continue to grow in the double-digits and are expected to maintain that path for at least the next two years.

Now before you run off scratching your head, there are the market capitalization figures to consider, versus $208 billion for Pfizer and $138 billion for Merck. Amgen is king at about $80 billion as of now, and it seems to be the first biotech that could ultimately reach the mega-cap class at $100 billion. The problem with thinking Amgen will be first is that analysts project more upside and growth at Gilead, and its market cap is almost $77 billion. Biogen Idec is worth more than $51 billion and Celgene is worth about $49 billion.

Biotech stocks have performed incredibly well so far in 2013. For value-oriented investors, these still need to soften up in price. For investors who chase growth at any price, there is still some perceived upside. The good news is that biotechs have pulled back and now Big Pharma stocks have all pulled back. The bad news is that if the market does not keep rising, it is very likely that investors will look for more patient entry points before chasing these high gains and valuations in biotech.

For those looking for undervalue growth with more risk, a firm called PropThink has just issued a list of biotech stocks that it feels are not represented with proper valuations (yet) by the market.

One more issue we noted in much more detail in our ETF Folly for Biotech ETFs is that the exchange traded fund universe is very underrepresented in this sector, regardless of valuation analysis. The top ETFs here are the iShares Nasdaq Biotechnology (NASDAQ: IBB), SPDR S&P Biotech (NYSEMKT: XBI), First Trust NYSE Arca Biotech Index (NYSEMKT: FBT) and the Market Vectors Biotech ETF (NYSEMKT: BBH). Note that the combined market capitalizations are not quite 2% of the combined market valuations of just the top four biotech stocks.

In Pfizer’s case, the loss in 2011 of patent protection on its Lipitor product has punched a serious hole in the company’s revenues. Sales of Lipitor in the first quarter were down 55% year-over-year. Pfizer also felt a negative impact from the weaker Japanese yen.

Amgen experienced weaker sales from two of its anemia drugs, a drop that could not be overcome by higher sales of its new osteoporosis drug. Sales of its best-selling drug for rheumatoid arthritis were also slightly below expectations.

Merck is expected to post earnings per share (EPS) of $0.79 on revenues of $11.09 billion when it reports earnings tomorrow before the markets open. Three months ago, the consensus estimate for quarterly earnings was $0.90. In the first quarter of 2012, Merck posted EPS of $0.85 on revenues of $11.73 billion.

Shares of all three stocks reached a new 52-week high last week, before starting to slide following Amgen’s report. Amgen is down about 5.5% since reporting results, Pfizer is down about 4.7% and Merck holds onto a tenuous 0.3% gain. For the past year, though, Amgen is up 48%, Pfizer is up 35.5% and Merck is up more than 26%.

Shares of Pfizer are down about 3.5% today, at $29.36 in a 52-week range of $21.40 to $31.15. Shares of Amgen are down about 2.2%, at $104.29 in a 52-week range of $67.61 to $114.95. Shares of Merck are down 1.3%, at $47.16 in a 52-week range of $37.02 to $48.79.

We wanted to take a look at some of the bright spots in the earnings season so far, and these include Intel Corp. (NASDAQ: INTC), Microsoft Corp. (NASDAQ: MSFT), Verizon Communications Inc. (NYSE: VZ), Johnson & Johnson (NYSE: JNJ), Netflix Inc. (NASDAQ: NFLX), Google Inc. (NASDAQ: GOOG) and Peabody Energy Corp. (NYSE: BTU).

Intel Corp. (NASDAQ: INTC) and Microsoft Corp. (NASDAQ: MSFT), the Wintel duo, were not expected to show much in the first quarter. Fourth-quarter PC shipments were down and not expected to improve, while Microsoft’s Windows 8 operating system was generating some buzz, but not much in the way of sales. The two companies offered surprising, if not exciting results. Both companies’ share prices have remained above their pre-release levels even though both remain well within their 52-week ranges. One possible note of caution going forward is that the channels may be stuffed with product that is not moving and we won’t know that until next earnings season.

Verizon Communications Inc. (NYSE: VZ) seems to post a new 52-week high every day. Perhaps there is increasing optimism that the company will buy out Verizon Wireless partner Vodafone Group PLC (NASDAQ: VOD). That buyout would be immediately accretive to revenue and profit, but leave Verizon with a punishing debt load. This may be one of those situations where everything is fine until it’s not.

Johnson & Johnson (NYSE: JNJ), like Verizon, seems to make a new high every day. The company appears to have fixed its quality control issues and many of its most important lines of business are growing again. As we noted last week, we expect the 2.9% dividend yield to get a boost any day now.

Netflix Inc. (NASDAQ: NFLX) absolutely shattered expectations and the shares have been on a tear for the last couple of days, posting another 52-week high today of just under $220. Subscriber numbers were up and much of the credit is going to the company’s original production of “House of Cards.” Original programming is expensive and eats into the bottom line, but given the demands for licensing content from other media houses, Netflix’s original programming should carry it to more growth going forward.

Google Inc. (NASDAQ: GOOG) earnings beat estimates and were just a bit shy on the top line. Paid clicks were up 20%, but the amount the company received for each click fell by 4%. That’s still a net positive, however, and the plain fact is that web searching is massive, and Google simply owns search in much of the world. That’s not likely to change anytime — sooner or later.

Peabody Energy Co. (NYSE: BTU) did not post a profit in the first quarter but its loss was only a third as large at analysts had expected. Peabody and Arch Coal Inc. (NYSE: ACI), which reported in-line results this morning, both expect sales to improve as natural gas prices rise for the rest of this year. The entire coal mining sector could begin to see improvements based on these two miners’ results

We said at the beginning that we were going to cover bright spots so far this earnings season, but there is one storm cloud that deserves to be mentioned as well. As we’ve noted before, Caterpillar Inc. (NYSE: CAT) may be very bad news not just for the mining and heavy equipment sector, but for the whole mining group. The big miners have been struggling with rising costs and surging stockpiles. It could be several quarters before the mining sector sorts itself out.

On a GAAP basis, Abbott posted EPS of $0.34.

On the revenue side, Abbott said that excluding the effects of currency exchange rates, the company’s revenues rose by 3.5%. Including exchange rate effects, revenues rose by just 1.8%. U.S. sales fell by 3.3% and sales in the medical devices group fell by 12.7%. Sales gains in the nutrition and diagnostics segments totaled 2.1% and 2.9%, respectively.

The company’s CEO said:

Strong performance in Nutrition and Diagnostics, as well as overall results in emerging markets, led our sales growth this quarter. We had significant new product and geographic expansion activity during the quarter that positions Abbott well for continued growth.

Abbott confirmed its full-year adjusted EPS guidance of $1.98 to $2.04, in line with the consensus estimate of $2.01. GAAP EPS is expected to total $1.39 to $1.45 due to items including intangible amortization expenses and cost reduction expenses. For the second quarter, Abbott expects to post adjusted EPS of $0.43 to $0.45, which does not include $0.16 in one-time items.

Shares of Abbott are trading down in the premarket this morning, at $35.80 in a 52-week range of $31.64 to $72.47. Thomson Reuters had a consensus analyst price target of around $37.90 before today’s report.