Options Play
TonyKau
7/4/2011 3:31:50 PM
I followed this article with an options play recommendation on SeekingAlpha to better take advantage of the movement I anticipate. Let me know what you think.
Biotech is a tricky area. I particularly like Roche Holdings because they have adapted to the regulatory environment by a diversification that has synergy to it. A division of their business that deals with laboratory assay material and apparatus has accounted for a substantial portion of their income, and it's a part of the business that thrives in general when rigorous approval standards are imposed on pharmaceuticals. With a P/E of 11.57%, you're taking a little bit more on faith than others on the list, but their business model does suggest staying power. Plus they are solidly in the forefront of stem cell research, which has won a great deal of popular support. In countries that have dispensed with the cumbersome bioethics protocols, some very interesting results have been achieved.
But isn't every investment a risk?
Re: Biotech Enthusiasm
mInvestor
7/2/2011 9:30:51 AM
Thank you, Tony.
GILD looks like a good buy based on all info and data. I will keep close attention to these two companies.
Thank you for this great analysis.
mInvstor
Re: Biotech Enthusiasm
TonyKau
7/1/2011 9:18:57 PM
Thanks. all, for the positive feedback!
mInvestor,
I did a writeup on Gilead Sciences (GILD) that you might like. You can see great ratios, and a much better outlook for sure. What are your thoughts?
Personally I like TEVA more. TEVA is selling at a far more fair price. With little exposure of patent expiration. As the biggest generic drug manufacturer, their profit margin is close to these big pharms. I like the low cost manufacturer, the only concern is the Dividend payout is not that good.
The great thing about Biotech stocks.
back2basicz
6/30/2011 9:00:58 PM
Guys,
The Greatest thing about Biotech stocks is if you can actually pinpoint a winner(with a relatively strong level of accuracy);your Winnings can be enormous.
Its just that looking at the Biotech Majors like Biogen defeats the purpose.You have to look at the Small-caps(& prepared to see wild-wild swings) just like in Junior Resource stocks.
Here's a list of some interesting Biotech Speculations.
http://www.investorplace.com/47797/biotech-penny-stocks/?sid=MA5219&cp=CWOE&ct=20110630&cc=eletter&en=3667462
Regards
Ashish.
No Dividend Growth No Buy.
back2basicz
6/30/2011 8:52:02 PM
Tony,
Great Analysis!!!
Its a well known fact that the S&P 500/Nasdaq has basically gone nowhere since its peaked in 2000.
In this sceanario the only reliable way to make returns in the stockmarket is through Dividends and especially consistently Growing Dividends.
Does Biogen fit this picture?
No it does'nt ;so it does'nt rate as a Buy in my opinion.
Regards
Ashish.
Re: Biotech Enthusiasm
mInvestor
6/30/2011 2:27:01 PM
Hi Tony,
Good analysis. Can you give an example that the company has a potential up trend? So we can do a side by side comparison.
Thanks.
Great analysis Tony. Check out CELG. Popping up on my screen as undervalued.
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