Updating Plans for Three Recent Trade Ideas
Here's how I'm responding as Acadia Pharmaceuticals, Lantheus Holdings and The St. Joe Company revealed Q4 results.
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Fourth quarter earnings reports are flying across the wires as February comes to a close. Let's circle back to some recent trading ideas and update the investment thesis on a few mid-cap names following Q4 results:
Let’s start with my stock pick for 2025, Acadia Pharmaceuticals ACAD. This mid-cap biopharma managed to buck the big selloff in the market on Thursday after posting its Q4 numbers before the bell. The company had a huge bottom-line beat. But this was primarily due to recording just over $145 million in proceeds from a priority review voucher it sold on the market. Quarterly revenues did rise just over 12% on a year-over-year basis. After more than tripling profits in fiscal 2024, management put out decent initial fiscal 2025 guidance and provided a solid update around its pipeline. Acadia also has a large cash hoard on its balance sheet and is likely to remain a good rinse, wash, and repeat covered-call trade for my portfolio throughout 2025. It would be nice if the company did use some of that cash on its balance sheet to bolster its pipeline via a small, strategic bolt on acquisition.
Lantheus Holdings LNTH, which I touched on in an article earlier in the month, posted impressive fourth-quarter results on Wednesday, triggering a nice rally in the stock. Sales and earnings growth will cool in fiscal 2025, but the stock is still reasonably priced at around 13-times forward earnings. Especially given the overall market multiple and the company is relatively resistant to both recession and tariffs. That said, I would probably wait for the stock to give back some of its post earnings rally and pull back into the mid-$80s before I added to my stake in this pharmaceutical name.
Finally, we have The St. Joe Company JOE, a name I highlighted a few weeks ago. This is one of only two real estate-related companies I own in my portfolio, as I have been hugely underweight this part of the market for over a year now. The main reason I own St. Joe is that the huge land acreage it has up in northwestern Florida is significantly undervalued.
St. Joe reported better-than-expected fourth quarter earnings earlier this week. Revenues rose just over 20% from the same period a year ago. Homesite sales surged in the quarter, revenue from its hotels was up better than 19% and the leasing revenues from its commercial properties also rose 15%. The company continues to convert its large land bank to accelerating revenue and other productive uses. St. Joe recently opened its own boutique real estate brokerage to boost that process. St. Joe is likely to remain a core holding for me for the foreseeable future.
Unfortunately, not every trading idea can be a winner. In Monday’s column, I will circle back on some investment picks that have not panned out to date and what I am doing with them in my portfolio.
At the time of publication, Jensen was long ACAD, LNTH and JOE.
