2-Star Stocks Poised to Plunge: Synta Pharmaceuticals?

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, biotechnology company Synta Pharamaceuticals (Nasdaq: SNTA  ) has received a distressing two-star ranking.

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

Synta facts

Headquarters (Founded) Lexington, Mass. (2000)
Market Cap $440.3 million
Industry Biotechnology
Trailing-12-Month Revenue $5.2 million
Management Co-Founder/CEO Dr. Safi Bahcall
CFO Keith Ehrlich
Trailing-12-Month Return on Capital (70.9%)
Cash/Debt $44.7 million / $16.3 million
Competitors Infinity Pharmaceuticals
Kyowa Hakko Kirin
Novartis

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

On CAPS, 16% of the 168 members who have rated Synta believe the stock will underperform the S&P 500 going forward.

Just last week, one of those Fools, All-Star zzlangerhans, touched on Synta's seemingly unsustainable valuation:

Hsp90 inhibitor Ganetespib is certainly in a lot of mid-stage trials but thus far in 2012 we haven't seen the kind of exciting interim data that management led us to expect. There's certainly a lot more info to come, but with Synta's poor developmental track record so far I see a market cap of [$450M] as excessively optimistic.

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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 don't 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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