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Intrepid Investor

 
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  • Biotechs With Insider Buying
    Today, 2:16 PM ADMA, ARIA, DVAX 2 Comments

    Summary

    • Inside ownership is one of many considerations in stock selection, and certainly not the primary one.
    • It is nevertheless discouraging to make a high risk:reward investment, then find out management is selling - I prefer to partner with management that is also buying.
    • Ariad is my top pick among the seven biotechs featured below with recent insider buying.
  • Square Root Sign Of Micro-Cap Stock Price Manipulation
    Today, 8:30 AM AAPL, AIRT, EXQNF Comment!

    Summary

    • Everyone knows it goes on, but not much is said - can't prove it, and it's embarrassing if you're duped into selling.
    • Too much information out there on large caps like Apple to know for sure if irrational price movements are self-inflicted by the fearful, short sales, or deliberate manipulation.
    • Simpler stories, less liquidity, less short interest, and less visibility make micro-caps the best case studies of deliberate price manipulation. Great American Group price action looks like an example.
  • How Long Can A Good Stock Remain Undervalued?
    Sat, Aug. 16 AFL, CSCO, GD 13 Comments

    Summary

    • FAST Graphs is well known to SA readers as a highly visual and useful research tool for putting valuations on stocks, and identifying a margin of safety.
    • Some SA readers have wondered how long a good stock can remain undervalued, a question which arises when viewing a stock's underperformance over a period of time on FAST Graphs.
    • Many stocks undervalued by more than 20%, even when undervalued for periods of 3 years or more, still outperformed the market.
  • Buy An Unprofitable Company That Will Use Your Capital To Become Profitable
    Fri, Aug. 15 KTOS, NOK, NVAX 10 Comments

    Summary

    • A company that is profitable enough to pay shareholders dividends and repurchase its own shares obviously doesn't need your capital, but may be a good place to deposit your cash.
    • A company that is unprofitable but is continually reinvesting revenue and shareholder capital in its research, development, and growth offers opportunity for real investment.
    • Capitalizing R&D expenses in the analysis of returns on investment may help identify unprofitable companies that will use your capital to become profitable in the near future.
  • Largest Cap Techs Undervalued, Consumer Goods And Utilities Large Caps Stretching Market Valuations
    Thu, Aug. 14 XLU, XLI, XLF 4 Comments

    Summary

    • SPDR ETFs can be used as a broad guide to stock performance by sector and may be tracked on Google.com/finance. Technology sector ETF (XLK) has by far the highest P/E.
    • FAST Graphs is a stock research tool that provides a 2-dimensional fair value reference for a stock's price based on current, historical and projected earnings.
    • FAST Graphs 2-D snapshots show technology large caps to be the most undervalued, consumer goods and utilities are most overvalued.
  • Some Elegant Biotech Platforms I Read About While Looking For The Next Regeneron
    Wed, Jul. 16 BLUE, BNIKF, BTEBY 37 Comments

    Summary

    • Discovery and development platforms can efficiently multiply a drug pipeline. Regeneron leveraged its platforms to become a biotech paragon over the 5 years prior to 2014.
    • Bluebird bio, Epizyme, Sangamo, and Benitec are among companies with platforms that could not only be force multipliers, but also change the way diseases are treated, i.e. be disruptive.
    • Placing valuations on biotech companies is difficult; confidence in the platform is therefore essential.
  • Basket Of Biotech Bargains To Buy And Hold
    Mon, Jun. 30 AEGR, AEZS, AMBI 19 Comments

    Summary

    • Nearly 20% of biotech stocks remain more than 50% off 18-month highs. Most of these companies have a market cap below $1B - some might be bargains.
    • To make the cut as a potential bargain, I required the company to have TTM revenue growth, market cap-to-revenue less than 15, and R&D budget at least 50% of revenue.
    • Eleven candidates are presented and briefly discussed.
  • Mentor Graphics' Peer And Market Beating Valuation Metrics
    Wed, May. 14 MENT 7 Comments

    Summary

    • Mentor Graphics (MENT) has strong-buy ratings from Eva Dimensions and Zacks which is an uncommon consensus.
    • MENT combines features growth and value, i.e. GARP.
    • MENT valuations beat its peers, Synopsys and Cadence, and the current fear of small cap tech stocks may enable investors to beat the market if they buy now and hold.
  • If You Want GARP, Look Into Biotech, Not Utilities, But Do The Valuations
    Mon, Apr. 28 AMGN, BIIB, GILD 10 Comments

    Summary

    • If there is a rotation in stocks, it is more apparently from high growth into low growth than into quality.
    • Just look at revenue growth versus multiple expansion over the past 2.5 years among top biotechs being sold off, and you'll see what I mean.
    • The biotech selloff is at best indiscriminate, at worst contrived to rock others out of the boat.
  • Retail Investors Should Be Doing Valuations On Their Biotechs - The Market Is
    Mon, Apr. 21 AMGN, GILD, PCYC Comment!

    Summary

    • Valuations on profitless biotechs are difficult. One method puts R&D expenses back with operating profits in the numerator of ROC, and capitalizes them as an asset included in the denominator.
    • Amgen, Gilead and Pharmacyclics returns using R&D-adjusted ROE and ROC are presented along with ROIC data from New Constructs and from Morningstar.
    • Investors in a biotech with reliable returns on capital that exceed its cost, or that are rising rapidly, can ride out negative volatility with more confidence than speculators can.
  • The Biotech Sell Off Is Largely Indiscriminate And The Best Stocks Are Not Over-Valued
    Mon, Mar. 31 11 Comments

    Summary

    • The biotech sell off has affected the best of them: the top 10 FBIOX stocks fell 16% in the month of March.
    • While P/S, a misnomer for market cap-to-revenue, gives a only a snapshot valuation, it is one way to compare stocks and to look for inflation of valuations over time.
    • Valuations of most of the FBIOX top 10 had not become inflated between early 2012 when prices began to soar, and late February 2014 when the sell off began.
  • Looking For Value Among Biotechs After Precipitous Declines In Stock Price
    Mon, Mar. 24 ACHN, AEZS, AMRN 25 Comments

    Summary

    • Recent, precipitous price declines in some biotech stocks highlights big risk.
    • However, when the herd stampedes out, it sometimes leaves a bargain behind.
    • Fallen stocks of biotechs with a novel drug approved or a multi-drug pipeline, growing revenue, and reasonable valuations make interesting prospects.
  • FDA New Molecular Entities - Finding Them Ahead Of Approval But Also Ahead Of The Herd
    Tue, Mar. 18 BBH, FBT, IBB 6 Comments

    Summary

    • The development of novel drugs that will have a large impact on the public health is a worthy investment.
    • Investing ahead of the herd but safely requires the most reliable source of information: trials results are often published in expertly peer-reviewed journals ahead of approval.
    • As a single, reliable source of important clinical trials results for novel drugs ahead of FDA approval, New England Journal of Medicine is unparalleled.
    • If the herd has already stampeded a stock on preliminary data ahead of expertly peer-reviewed publication and approval, just wait.
  • Geron Is A Speculative Buy Even After The Precipitous Price Decline
    Thu, Mar. 13 GERN 31 Comments

    Summary

    • Geron stock's precipitous decline highlights the risk in some biotech.
    • Half of the precipitous stock price declines among biotech in the past year have been followed by a substantial recovery.
    • Don't invest unless you believe in what the company is doing.
  • Exiqon Is A Safe Way To Play The Renaissance In Antisense
    Wed, Feb. 12 AFFX, QGEN, TMO 2 Comments
  • Be Glad You Didn't Sell Affymetrix's Earnings Miss. Its Returns Are Evidence Of Its Recovery
    Mon, Feb. 10 AFFX 4 Comments
  • Seattle Genetics Will Exceed And Immunogen Will Meet Market Expectations
    Sat, Jan. 25 AMGN, CLDX, IMMU 17 Comments
  • Forecasting Earnings Growth And Profitability In The Biopharmaceutical Industry
    Tue, Jan. 21 ACOR, AMGN, BIIB 5 Comments
  • Isis Ally Alnylam - Trying To Understand Its Astounding Valuations
    Dec. 10, 2013 ISIS, ALNY 27 Comments
  • Life Sciences Offer Good Growth With Much Less Risk Than Biopharmaceuticals
    Nov. 26, 2013 AFFX, ILMN, NSPH 5 Comments
  • Ballantyne Strong: Beacon Switching To Technology Services
    Nov. 11, 2013 BTN Comment!
  • Understanding Air T's Low Valuations In Relation To Its Big Daddy
    Nov. 8, 2013 FDX, AIRT 18 Comments
  • S&W Seed Co. Stock Price Marked Down From $11 To $7: A High Risk But High Reward Long-Term Buy
    Nov. 5, 2013 SANW 5 Comments
  • Delicious Fresh Del Monte: Growing More Than Produce
    Oct. 28, 2013 FDP 2 Comments
  • Armanino Foods Of Distinction: A Rich-Too-Quick Microcap?
    Oct. 21, 2013 AMNF 11 Comments