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Gene Marcial's 2008 book, The 7 Commandments of Stock Investing, was published by the Financial Times Press. Marcial was long a columnist for Business Week; he often included in his weekly columns Ascent CEO Peggy Farley's views on the stock market and on investment worthy companies. These are some excerpts from Gene Marcial's book:
On Kos Pharmaceuticals (KOSP) found on page 122:
"The company had been down in the dumps at $5 a share seemingly forever. But Peggy Farley, president and CEO of Ascent Capital Management, Inc., bought shares anyway in 2000. Although the company had made progress with its lead drug called Niacin, Kos was ignored for years by Wall Street and the investment community. Farley saw Kos as an incredible bargain: It had proven product, both from an efficacy and marketing standpoint; it had seasoned management with the ability to drive sales higher over time by adding new products; and it had shown capability to expand its markets. Then the stock sparkled. It climbed to an all-time high of $78 a share—yes, $78. Predictably, a lot of second-thinking and skepticism followed, and, combined with predictable profit taking, the stock fell to $66. But Farley stayed with the stock, convinced that Kos couldn't have vaulted to great heights—from $5 to $78—without good reason. Sure enough, Abbott Laboratories emerged from the wings and expressed an interest to buy Kos. It eventually did, at $78 a share."
On page 145, Advanced Neuromodulation Systems (ANSI):
"Advanced Neuromodulation Systems is in the business of managing chronic pain. What's neuromodulation? It is the delivery of electrical stimulation to nerve fibers to ease pain. The company has developed an implantable pulse generator system that stimulates the spinal cord to remedy intractable chronic pain. The company's stock itself was in great pain: It plunged from $47 a share in February 2004 to $27 on May 12, 2004. The entry of another company, Advanced Bionics, into the pain control business prompted many investors in Neuromodulation Systems to bail out. However, some smart-money pros took the decline as an opportunity. Peggy Farley, President of Ascent Capital Management, was one of them. Because there were only a handful of players in the field, Farley felt the company could end up as a buyout target of Big Pharma. There were rumors that Johnson & Johnson was looking to broaden its stake in the neuromodulation market, which was then dominated by Medtronic. Other factors provided allure to the stock. Some clinicians believed that neuromodulation had potential in treating other major ailments, such as Alzheimer's and depression.
Neuromodulation Systems did get bought out, but Johnson & Johnson wasn't the buyer. St. Jude Medical bought the company, in 2005 for $62 a share. Neuromodulation Systems wasn't a well-known stock but, like many biotechs, its value was in the potential worth of its products. St. Jude recognized that it needed to be in that field more broadly."