Why Opko Health Is Poised to Pull Back

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, pharmaceutical and diagnostics company Opko Health (NYSE: OPK  ) has received an alarming one-star ranking.

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

Opko facts

Headquarters (Founded)

Miami (2006)

Market Cap

$2.0 billion

Industry

Biotechnology

Trailing-12-Month Revenue

$36.6 million

Management

Chairman/CEO Dr. Phillip Frost (since 2007)
Vice Chairman/Chief Technology Officer Dr. Jane Hsiao (since 2007)

Return on Equity (Average, Past 3 Years)

(23.9%)

Cash/Debt

$42.4 million / $21.4 million

Competitors

Alnylam Pharmaceuticals (NASDAQ: ALNY  )
Genentech
Merck
(NYSE: MRK  )

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

On CAPS, 17% of the 168 members who have rated Opko believe the stock will underperform the S&P 500 going forward.

Just last week, one of those bears, All-Star TMFBlacknGold, touched on Opko's seemingly unsustainable valuation:

I see a lot of speculation here about a buyout, but let's get back to reality. It doesn't seem likely that any company will pay over $2 billion for just $170 million in net assets and less than $40 million in annual revenue. Opko goes from a measly $5-$6 million in quarterly revenue to $11 and all of a sudden it's the best company ever? Look closer and you'll see that a near doubling in revenue resulted in an even larger loss than last year!

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Read/Post Comments (5) | Recommend This Article (3)

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 February 05, 2013, at 7:20 AM, cyclesico wrote:

    An absolute feeble attempt to bash a stock. This company is not about takeover, but leadership and proven historical results from that leader.

    This author belongs on the yahoo message board, that is about the quality and depth of this pathetic writing.

  • Report this Comment On February 05, 2013, at 9:06 AM, curtbs wrote:

    Where can we and the SEC find the 180k ranking and your position in OPK.?

  • Report this Comment On February 05, 2013, at 10:52 AM, curtbs wrote:

    And wheres the dis-like button?

  • Report this Comment On February 05, 2013, at 4:38 PM, Alancoit wrote:

    The author doesn't seem to have the medical knowledge to evaluate the value of OPK's technologies.

  • Report this Comment On February 06, 2013, at 12:13 PM, Alancoit wrote:

    For those of you who are interested in OPK, also take a look at PBTH. Long acting growth hormone, only one of its projects, would completely take the

    growth hormone market away from the short acting version. Kids now on growth hormone need an injection every day for years. The long acting version would be given once a week, so it is vastly more convenient, less painful and less expensive, which would motivate insurance companies to cover it.

    Disclosures: I am a physician and am long PBTH.

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