Emergent BioSolutions Shares Jumped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of biodefense specialist Emergent BioSolutions (NYSE: EBS  ) popped 13% on Monday after landing a contract with the U.S. government to supply it with 44.75 million doses of anthrax vaccine BioThrax.

So what: Emergent has trailing-12-month sales of $284 million, so the agreement -- worth as much as $1.25 billion over five years -- is obviously a big win for the small-cap company. In fact, Emergent has been punished in recent months on a steep drop in BioThrax sales, suggesting a possible turning point in the shares.

Now what: Don't let today's pop keep you from looking into the stock. Deliveries of BioThrax are already slated to start later this year, with 8.5 million doses delivered in the first contract year, so investors won't have to wait very long to see those top-line gains. And with Emergent still down about 30% year-to-date and currently trading at a reasonable forward P/E of 12, it's hard to imagine the shares not following.

Interested in more info on Emergent? Add it to your watchlist.

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.


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12/19/2014 4:05 PM
EBS $27.05 Up +0.07 +0.26%
Emergent BioSoluti… CAPS Rating: ****

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