Cubist Pharmaceuticals, Inc. (NASDAQ:CBST)

Cubist is a tasty treat at this price. I missed an opportunity to pick them up below 30 in the depths of the recent decline - I imagine I was saving a few stocks for a deeper dip. Now that I've had time to make a more measured assessment, I see the stock as having all the ingredients for a successful mid-cap biotech/pharma outperform pick.

1. Growing revenues. Sequential quarterly numbers of 161M, 163M, and most recently 177M. Yes, all the revenues come from a single drug. But sales have been steadily growing for years and there's no generic until 2018. Cubicin was also recently approved in Japan which might give some juice to the top line.

2. Strong pipeline. Novel anti-pseudomonal cephalosporin CXA-201 has moved into phase III trials in UTI and will soon do the same with intra-abdominal infections. The company reported encouraging phase II data for c.diff antibiotic CB-183,215 in June but has not yet decided if and when to progress this candidate to a phase III trial.

3. Share price significantly off of recent highs. The share price was over 38 in June. There's only one thing bringing the stock down, and that's broad market uncertainty. When fund managers liquidate a speculative position because they can't remember what that ticker stood for, it's an opportunity for sector-focused traders to come in and pull the babies from the bathwater.