2-Star Stocks Poised to Plunge: Incyte?

Based on the aggregated intelligence of 165,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, biotechnology company Incyte (Nasdaq: INCY  ) has received a distressing two-star ranking.

With that in mind, let's take a closer look at Incyte's business and see what CAPS investors are saying about the stock right now.

Incyte facts

Headquarters (Founded)

Wilmington, Del. (1991)

Market Cap

$1.6 billion

Industry

Biotechnology

Trailing-12-Month Revenue

$25.9 million

Management

CEO Dr. Paul Friedman (since 2001)
CFO David Hastings (since 2003)

Return on Capital (Average, Past 3 Years)

(45.7%)

Compound Annual Revenue Growth (Over Past 3 Years)

(3.3%)

1-Year Return

271%

Competitors

Amgen (Nasdaq: AMGN  )
Bristol-Myers Squibb (NYSE: BMY  )

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 10% of the 254 members who have rated Incyte believe the stock will underperform the S&P 500 going forward. These bears include JackCaps and All-Star zzlangerhans, who is ranked in the top 0.5% of our community.

Just last month, JackCaps touched briefly on Incyte's skyrocketing stock price: "Incyte looks poised for a technical retreat."

In an earlier pitch, zzlangerhans also offered some insight into Incyte's risk/reward profile:

Incyte is at an eight year high less than a year after what I believe was a fifteen year low last April. Kudos to anyone who had the foresight ... to buy biotech during the meltdown last spring. But if you invested in Incyte back then, cash out and buy yourself something nice. The pipeline and partnerships have potential, but not 1.5 billion market cap potential at this time. Given the ebb and flow inherent in baby biotech, allow yourself a chance to buy it again below 5 next time the worm turns.

What do you think about Incyte, 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!

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Fool's disclosure policy always gets a perfect score.


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