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13

1-Star Stocks Poised to Plunge: Pluristem?

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, biotechnology company Pluristem Therapeutics (Nasdaq: PSTI  ) has received the dreaded one-star ranking.

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

Pluristem facts

Headquarters (founded) Haifa, Israel (2001)
Market Cap $212.9 million
Industry Biotechnology
Trailing-12-Month Revenue $615.0 thousand
Management Chairman/CEO Zami Aberman
CFO Yaky Yanay
Return on Equity (average, past 3 years) (109%)
Cash/Debt $39.5 million / $0
Competitors Aastrom Biosciences
Advanced Cell Technology
Osiris Therapeutics

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 94% of the 18 All-Star members who have rated Pluristem believe the stock will underperform the S&P 500 going forward.

Just last month, one of those Fools, zzlangerhans, tapped Pluristem's recent price surge as highly unsustainable:

You can't sell your snake oil in the USA until [the FDA has] approved it. In order to get something past them, you have to demonstrate a benefit that outweighs the risk in large, randomized clinical trials. That's an area where Pluristem has actually made very little progress in recent months, despite their exciting announcement of the selection of a contract company for an upcoming phase II trial. No word on when that trial will actually begin, and likewise for other promised late stage trials. ... Is the move over? Don't really know. But eventually the money will have been made by the insiders and manipulators and the retail traders will ride the wave back down to baseline.

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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.


Read/Post Comments (14) | Recommend This Article (13)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 17, 2012, at 12:36 PM, keynesianponzi wrote:

    what a joke. these "fools" obviously don't understand the concept of disruptive innovation.

    "You can't sell your snake oil in the USA until [the FDA has] approved it. In order to get something past them, you have to demonstrate a benefit that outweighs the risk in large"

    check out what the snake oil just did recently:

    "Pluristem Stem Cells Save Second Patient with Bone Marrow Failure"

    http://news.yahoo.com/pluristem-stem-cells-save-second-patie...

    This stock is going to be a home run. I'll be back in 6 months to say i told you so.

  • Report this Comment On August 17, 2012, at 1:07 PM, BohicaJohn wrote:

    This is just someone looking to scare people out of the stock. He obviously has not done any dd on what has been going on with PSTI.

  • Report this Comment On August 17, 2012, at 4:58 PM, GentlejoeS wrote:

    Obviously, zzlangerhans nor you have done your homework. Articles such as this does Motley Fools readers an injustice, not to mention those of us who believe in the technology, and the company.

    I am surprised that Motley Fool even published this!

  • Report this Comment On August 17, 2012, at 7:29 PM, eyalyazdi wrote:

    I really hope you read these responses. Just to remind you a year ago zzlangerhans bubplished this report with 2 stars and sell recommendation (http://www.fool.com/investing/high-growth/2011/05/11/1-stem-..., what happened since, price doubled. Do your homewoek before you post anything. Maybe you had an agenda, getting cheap shares like every other reporter/writer out there.

    Bottom line, shows how reliable Motley Fool. I guess I will buy more now ansd wait a year, price will double.

  • Report this Comment On August 18, 2012, at 5:11 AM, Usishkin wrote:

    Placenta = snake oil.... interesting. Where can i find this person for investment advice.

    The problems here is not PSTI's but the US citizens' who will have to travel to Canada to get life saving treatments... Just because one confused President interpreted God's will as being-against-stem-cell-treatments (talk about snake oils... or "primitive" societies)

    A company which saves cancer patients that reached the level of "compassionate treatment" with a market cap of 190M... is about to drop 12%. How come I didn't see it coming?

    I guess in Wall ST 17 opinions from 17(?) anonymous sign-ins is considered "randomized clinical trials" sufficient to drop a stock 12%.

    Good job. Very deep analysis.

    And a very impressive "market movement" using the Good Guys as a platform.

    Hey Fool... maybe there is some lesson here?

    We have already Einhorn, Citron and others who destroy the stock market through slamming-n-shorting.

    I was hoping this site was different.

    What happens though this 1-star-thing is no better than Einhorn-HLF. It's a signal for herd-shorting.

    Do you realize that your good intentions may become a platform for potentially-criminal trading? obviously not in this case, but i am sure I am not alone in seeing the potential...

    It is another example why most private investors are GONE

    and why volumes are under 500M/day

    and why 1/2 of Wall St will be selling hotdogs on the corners before the private investors are back

  • Report this Comment On August 18, 2012, at 9:42 AM, TSIF wrote:

    Interesting, more people who think that an article published on an equity that is comprised completely of one unknown persons opinion, that he shares with an investing community, is a plot of shorts and that it was 12% successful.

    While my comments from the CAPS forum are also often turned into "articles" so MF can get attention to their paid services, the reason is becasue so few of the proported 64,000 "members" write any comments. Just as many of my positive comments are used as my non-positive and they are generally used within a few days of my posting them. Anyone who makes calls whether an equity will beat or lose to the S&P average can add comments that might get used as an article.

    The timing appeared to be "timely" because this one has nearly doubled in a month. Of course everything worthwhile that might potentially save lives, but has NO data to prove it deserves to go straight up forever.

    I personally don't like the "poised to pop or poised to plunge" title put on some of these. It does often present the wrong message.

    Overall, however, PSTI was due a correction regardless of any imaginary metrics being touted. And regardless that their business model is MUCH shadier than MF's random headlines. Claiming two miracle cures without the data to support it adds false hope and strengthens the investing conviction bias that too many people have.

    Here are some of my recent comments meant for the CAPS "trading idea" community for anyone seriously looking for more DD.

    http://caps.fool.com/Pitch/PSTI/6448708/i-might-be-a-little-...

    Even if you are a supporter of drug companies and their potential both financially and to society, a little DD about "valuation" might help you protect your limited financial resources so you have something to fall back on when the governement doesn't support you.

    Learning the phases of a biopharm, cycles, length of trials and the financing requirements can definitely help you if you want to "play" in this volitile, risky field.

    Overall, your time would be better spent on DD and learning about biopharms as zzlangerhans does who has an 80% success rate calling one up or down at a given time. Down sometimes on valuation at the time, not any negativity toward potential long term success.

    This one has at least 2-3 years of dilutive financing to continue. They will do equitity raises each time this spikes.

    Good luck.

  • Report this Comment On August 18, 2012, at 9:44 AM, TSIF wrote:

    PS thanks for joining MF to reply to this "article" so they can add you to their "head count". More zombies who add to the 64,000 headcount but who don't add anything to the community.

  • Report this Comment On August 18, 2012, at 9:50 AM, TSIF wrote:

    For those looking to do some DD, they should read the rest of zzlangerhans pitch that MF snippeted around. You will get the snake oil context and my own offense with the company.

    http://caps.fool.com/Pitch/PSTI/6424450/theres-certainly-no-...

    Besides the first paragraph I pasted below there are several more paragraphs of context.

    Good luck.

    =============

    There's certainly no shortage of microcap biopharma companies that have questionable ethics when it comes to misrepresentation and self-promotion with the ultimate goal of enriching management. But there are only a few that inspire the deep revulsion that I have for Pluristem. I can't say I have much sympathy for anyone who knowingly invests in a stock that recently underwent a 200:1 reverse split. Nevertheless, no investor deserves a CEO who writes a letter to shareholders to take credit for "saving the life" of a single patient who recovered after use of their unproven therapy outside of a clinical trial. It's notable that this miraculous event occurred outside of the United States, which makes the company's version of events much more difficult to corroborate. Here's a blurb from the CEO from a press release to an Israeli newspaper:

  • Report this Comment On August 19, 2012, at 5:07 AM, Usishkin wrote:

    TSIF

    Think about the following...

    PSTI got it's 1-star rating by a poll which came out 17-to-1

    If you digest a little the remarks here you'll find tat PSTI is over 50% positive...

    Interesting, no?

    If you look again carefully at my original response

    "17 opinions from 17(?) anonymous sign-ins". Pay attention to the "?"

    As a statistician, I'll share with you... something is wrong either with the 17-to-1 score or with the responses here.

    They don't sit well together, actually the chances that both are legit are less than hitting 3 straight 27's on the roulette.

    Statistically speaking...

    In today's stock market with Einhorn, Citron etc this is no paranoia. This is everyday life

  • Report this Comment On August 20, 2012, at 10:07 AM, TSIF wrote:

    The CAPS forum, where we trade ideas and "pit" ourselves against the S&P's performance is not a typical "survey". While we may have "anonymous" handles, many of us are "well known" in the community. The statistic of 17 out of 18 all-stars represents "members"/"players" who have been here long enough on MF and with a "successful" record, of putting us in the top 80% of the "Players".

    Most better known equities have hundreds of "calls" on whether the equity will "beat" the S&P over a specified period of time.

    PSTI has 33 total "calls", of which 18 were all-stars with a higher weighting. The 15 other calls could be from some savvy people, but generally represent those who "fall" for hype, are wishful of good news, hope to score big (financially or on caps), by being contrarian, etc. The allstars, while not necessarily any brighter have "typically", not always, been around longer and understand the "rhythms" such as see with PSTI.

    I would agree that some of the "allstars" are better known, such as zzlangerhans who "specializes" in biopharms. Some of us do check in on the others. When ZZ makes a pick, several other allstars may see it, research it and rate it. I sometimes go against ZZ, but most times agree with him. So some players can "attract" extra attention to a stock. The star rating is further tuned when there are more picks to duration of time, player ratings, etc.

    That 17 out of 18 allstars thumbed down PSTI after a near 100% spike on limited data and this early in the biopharm cycles is not unusual. While player names might seem anonymous, many of us know others from several years of "playing" together. Unlike the Yahoo message board where some shills make up knew names daily and band together to control the boards, this community is fairly mature. You don't have to agree with us, but it's not roulette.

  • Report this Comment On August 22, 2012, at 9:40 PM, rbemr wrote:

    I just read the Yahoo Finance article "Another Opportunity To Benefit From The Games Naked Short Traders Play?" that cites Brian D. Pacampara's blog. I've seen repeated hit pieces like this by the Fool now, particularly ARNA. This process is raping the average investor, who you are supposed to be serving. I am dropping my subscription. The Gardners try to portray themselves as average Joes. What a joke. They are deep in the sheets with big money Wall Street. If there's any integrity in the organization, these authors/bloggers should be rooted out and exposed. Motley Fool owes a public apology to your retail subscribers who have lost money because of your deceitful blogs.

  • Report this Comment On August 22, 2012, at 9:49 PM, keynesianponzi wrote:

    uh ohhhh, somebody might be going under the microscope...

    "Another Opportunity To Benefit From The Games Naked Short Traders Play?"

    http://finance.yahoo.com/news/another-opportunity-benefit-ga...

    your article was mentioned and called out for being the load of purposefully manipulative garbage that it is - already I've seen a dozen people say they'll be submitting a securities fraud tip to the SEC.

    have a nice day!

  • Report this Comment On August 24, 2012, at 10:32 AM, TSIF wrote:

    Interesting, I don't see a single reference to Motley Fool or the founders in the article you are linking to. The attention to PSTI by those playing the CAPS game for points and fame, (not even any cool prizes), was caused by the irrational spike.

  • Report this Comment On August 24, 2012, at 10:35 AM, TSIF wrote:

    Ahhh, I see it now, an embedded link to this article as an example of a perfectly timed short. Do direct mention to MF, Brian, or MF in the authors own article, just a vague "example" by someone who claims to have "inside information" on the workings of "dilutive financing". Inside information would be good for hte SEC to look at.

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