BYD Corp (OTCMKTS: BYDDF) has won the largest electric bus contract the U.S. has ever awarded. The Metropolitan Transportation Authority of Los Angeles placed an order for 60 new fully electric buses for $48 million. Each bus is 40 feet long, has maximum speed of 60 miles per hour, and has a range of 160 miles before it needs recharging. This is part of L.A.’s initiative to achieve 100 percent electronic transportation by 2030. These buses will be manufactured in BYD’s factory in the L.A. area and create at least 60 new jobs.

As for BYD, the company has been attempting to boost its U.S. presence. It’s building a new manufacturing facility in Lancaster, California that will employ 700 workers and target annual production of 1,500 electric vehicles (EVs). Construction is expected to complete this month. California, of course, is our nation’s most EV-friendly state, with more than 2,000 EV charging stations and 6,000 charging outlets in addition to rebates for purchasing EVs, so it’s no surprise that BYD is first building plants in the state in its foray into the U.S. market. The company aims to be the first Chinese automaker to sell passenger cars (traditional or EV) in the U.S. market.

BYD doesn’t garner nearly the same attention as the much flashier Tesla (Nasdaq: TSLA) but it sells the most EVs in the world. Its home country China is the world’s largest and fastest EV market. Government subsidy cuts earlier in the year brought pain to the EV industry, but in the long run we think it actually will likely benefit a heavyweight like BYD because reducing subsidies should disproportionately hurt the smaller competitors.

We rate BYDDF a “buy” up to $7.

Last week, we briefly mentioned that Theravance Biopharma (Nasdaq: TBPH) has become a “buy” as its share price dropped below $30. This week, negative reaction to its earnings results knocked the stock under $24 a share. After evaluating the details of its earnings conference call, however, we think the fundamentals haven’t significantly changed and the stock is still a “buy.” We keep our suggested buy-up-to price at $32.

The stock missed both revenue and earnings expectations due to lower sales of VIBATIV and higher spending on research and development as its pipeline advances. However, at this stage of the company’s life, more important than the top and bottom lines is the state of its product pipeline.

Two drug candidates that Theravance is particularly excited about are gastroenterologic.

During the earnings conference call, the company reiterated top-line results from Phase 2b trial of velusetrag, being evaluated as treatment for gastroparesis, partial paralysis of the stomach which prevents the emptying of food. The FDA has granted velusetrag a fast-track designation, signifying the drug’s importance as a potential treatment for a condition of unmet medical need. Different dosages of velusetrag were tested, and only the lowest dose (5mg) exhibited symptomatic benefits, probably due to higher doses causing other problems.

The 5mg data showed sufficient efficacy to move the drug to Phase 3 development, expected to consist of two separate trials lasting one year.

The other drug management concentrated on was TD-1473, a JAK inhibitor, a class of medication that has therapeutic application in the treatment of inflammatory diseases and cancer. In the case of TD-1473, Theravance is first targeting patients with moderate to severe ulcerative colitis (inflammation of the colon lining). Early-stage tests on a small number of patients over four weeks suggested that the drug was able to locally target the affected areas without affecting the patients systematically, which can lead to undesired side effects. Patients showed good tolerance of the drug. The early results supports continued development of the drug. Theravance is now enrolling two larger groups of patients for further Phase 1b testing.

The market, however, seemed to want more data from TD-1473, and along with a revenue and earnings miss, punished the shares severely. The fact that expectations had run too high likely contributed to the selloff.

The early data on both early-stage drugs, however, suggest good efficacy and tolerability that support further development.

Besides revenue from the upcoming revefenacin, which assuming FDA approval could hit the markets by late 2018, the company should also begin to receive royalty payments from GlaxoSmithKline (NYSE: GSK) as early as in the first half of 2018 from the first ever once-daily closed triple treatment for chronic obstructive pulmonary disease (COPD). Regulatory approval in the U.S. and Europe is expected before the year of the year). GSK will pay an upward tiering of 6.5 percent to 10 percent of global net sales to Innoviva (Nasdaq: INVA), from which Theravance spun off in 2014. Theravance in turn has 85 percent interest in these royalty payments.

We cautioned our readers not to chase the rally once the share price ran past our suggested buy-up-to price. Now, we think the price and expectation reset has created a very good buying opportunity. Keep in mind that as normal for small biotech companies without a major marketed product yet and is valued mostly for its pipeline, the stock’s risk and reward are both high. After the large price decline, however, we think the risk/reward balance tilts to the reward side. We expect the share price to recover as the company starts to generate revenue from its late-stage products and its pipeline advances. We rate the stock a “buy” up to $32.

We are almost ready to recommend several stocks from top funds such as Baupost Group and Tiger Global Management. The last box we have to check is we are awaiting the filing of their latest Form 13-F, expected by August 15 (next Tuesday), to see what these top money managers have done with these stocks. Assuming no negative surprises, we expect to have two exciting new picks next week, and with more to come in the following weeks. Visit our website and monitor your email to make sure you don’t miss out!