This satellite communications company is an interesting standout case in extreme debt. Intelsat S.A. (NYSE: I) earnings did not disappoint this year, but it has one of the most lopsided balance sheets that even rivals famously bankrupt Caesars. The company is in debt over 15 times its market cap of $1 billion. Intelsat would have to succeed beyond anyone’s wildest expectations instantaneously in order to be able to grow itself out of its nearly $15 billion debt hole. If interest rates tick up the slightest bit, the company will be destroyed. It is down over 40% on the year.
Chesapeake Energy Corp. (NYSE: CHK) is a casualty of the decline in the price of oil. After cruising through the first half of last year, the company was blindsided by the biggest crash in oil since 2008, and it took a huge balance sheet impairment of nearly $5 billion. Debt is also very high at 150% of market cap, so coming out of this decline will be difficult. It may be worth buying for a brief bounce, but for bottom pickers in energy, best pick a company battered, but in better financial shape for the long term. Chesapeake is down 45% year to date.
Whether this is taken ominously or as a piece of good news, all top five performers this year have been biotechs.
Eagle Pharmaceuticals Inc. (NASDAQ: EGRX) began the year at $15.50, climbed all the way up past $92, and has now pulled back to around $75. It is up 382% on the year. Eagle is in the business of reformulating old drugs to make them better and more easy to use. It is partnered with Teva on some lucrative projects (a partnership that has arguably contributed the most to its rise), has two potential approvals coming in the next few months and just had its first profitable quarter.
This biotech is up 200% on the year, 144% since late May when it reported positive Phase 3 results for its anti-nausea post-chemotherapy drug Sustol. Sustol was shown to be effective in preventing nausea for cancer patients undergoing chemotherapy for up to five days post treatment. Though medical cannabis has also been proven to accomplish the same thing, since it is illegal in most states and taboo even where it is allowed, Heron Therapeutics Inc. (NASDAQ: HRTX) looks set to make a lot of money. Market size looks to be close to $1 billion at optimum.
Horizon Pharma PLC (NASDAQ: HZNP) is something of a biotech roll-up company. It is up 144% on the year by acquiring drugs on the cheap on marketing them successfully to expand their sales. It acquired two key drugs late last year that have proven to contribute meaningfully to its revenues, and it bought Hyperion for over $1 billion this year to further expand its portfolio. Horizon is a risky one because, while its revenues are growing, it is not yet profitable and it spends a lot.
Synageva BioPharma Corp. (NASDAQ: GEVA) was acquired by Alexion for $8 billion, a deal that was announced in early May. Alexion was after a drug called Kanuma, which is under FDA review. It treats a rare cause of fatty liver and is expected to be blockbuster. Its big 157% move on the year is entirely attributable to its deal with Alexion.
Retrophin Inc. (NASDAQ: RTRX) was a controversial stock when former CEO Martin Shkreli headed operations until September last year. He was fired for impersonating rappers on Twitter to promote the company, as well as other strange practices. He did get Retrophin off to a running start, however, and the recent approval of Cholbam for bile acid synthesis disorder has put it on the move again since March. The company focuses on rare diseases and is up 160% in 2015.
Sponsored: Tips for Investing
A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.