A newcomer to our Most Attractive Stocks for July, this small cap stock has an excellent risk/reward profile, which earns it our highest Rating: Very Attractive.
Very Attractive Stocks had low downside risk b/c they are very cheap and unlikely to go much lower.
For example, MYGN’s stock price at $14.95 (closing price of stock before it was added to our list) implied the company’s NOPAT will drop by over 35% and remain at that depressed level for ever. In other words, the valuation of the stock at $14.95 implies 35% negative growth next year and 0% growth forever after the drop-off.
The stock has strong upside potential because the economic cash flows are rising (despite what the market expectations in the stock price say) and investors would reap big gains if the stock rose to a valuation that implies 0% growth instead of negative 35%.