Ghetto Gekko's favorite pick, "A Drug Dealer"

There are illegal drug dealers and there are legal drug dealers.

I like the returns from investing in the legal dealers better. You can make a lot of dough riding on the coat-tails of the ones who are selling the right drugs and who are selling a lot of them for the right prices.

My favorite one is Genentech (DNA) which closed Friday down $1.29 to $79.90.

I will not bore you with the details why, a detailed post will follow, but for now I will summarize it this way.

The company has been developing and selling drugs which are on the cutting edge of cancer treatment and therapy. They have been making a shitload of cash on these drugs in the last few years and most recently their financial results kicked ass on the consensus analysts estimates.

After a three year run up of almost 500% stock returns, I believe Wall St. has been taking a break for the last 12 months to allow for sales and earnings to catch up to reasonable valuations. I believe we are there now. After a brief sell-on-the-news pullback last week as a result of the 79% earnings rise which was much better than expected, the stock has been holding strong as a pit-bull during Wall Street's sharp sell-off the past two trading sessions.

The bottom line is the company is prolonging and saving lives while making plenty of money for themselves and shareholders. They are sitting on huge cash position which can be used for new acquisitions or to fund the Research and Development pool, their investment and gamble. It is because of their R&D budget that brought their miracle drugs to market, so I got their back when the idiots in Washington want to criticize them for charging to much for their products.

Ghetto Gekko wants to note that the company should get FDA approval on 4 different products in the next 3 months, so the estimates should rise on these events. I have to agree with the analysts that see this stock north of $100 a share, and from these levels, " I have got to get on that train Casey."

To all the gangstas that want to make money legally on the drug trade, Buy DNA and show Wall Street that OG's got the inside tip from Ghetto Gekko.

This week, I am adding 100 shares and one contract of the January 2007 75 Calls to my model portfolios.. The prices as of the open Monday morning will be the execution prices in the model portfolios.

I am adding these two postions to my long term investment portfolio and my trader investment portfolio.

Links to the model portfolios will be available soon.