2-Star Stocks Poised to Plunge: Human Genome?
Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, biopharmaceutical company Human Genome Sciences (NAS: HGSI) has received a distressing two-star ranking.
With that in mind, let's take a closer look at Human Genome's business and see what CAPS investors are saying about the stock right now.
|Headquarters (Founded)||Rockville, Md. (1992)|
|Market Cap||$1.8 billion|
|Trailing-12-Month Revenue||$106.7 million|
|Management||CEO H. Thomas Watkins (since 2004)|
CFO David Southwell (since 2010)
|Return on Equity (Average, Past 3 Years)||(71.6%)|
|Cash/Debt||$539.8 million / $524.6 million|
Sources: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 20% of the 713 members who have rated Human Genome believe the stock will underperform the S&P 500 going forward.
I haven't done very well with Human Genome, missing an enormous potential gain on the success of Benlysta in clinical trials and then getting crushed when I thought the stock was oversold after approval. Let's see if I have better luck this time. ...
The rise in share price seems to be predicated on optimistic language from management as well as takeover speculation. However, we already know that the net Benlysta revenue for Q4 will be about 26M, which isn't much of a jump from 7.8M and 18.8M in the preceding quarters. It certainly won't be enough to make much of a dent in the company's huge quarterly losses. A recent 500M debt financing indicates that the company may be digging in for a prolonged period of negative cash flow.
What do you think about Human Genome, or any other stock for that matter? If you want to retire rich, you need to protect your portfolio from any undue risk. Staying away from dangerous stocks is crucial to securing your financial future, and on Motley Fool CAPS, thousands of investors are working every day to flag them. CAPS is 100% free, so get started!
Want to see how well (or not so well) the stocks in this series are performing? Follow the newTrackPoisedToCAPS account.
At the time this article was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.
Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.