Why Endocyte 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, biopharmaceutical company Endocyte (NASDAQ: ECYT  ) has received a distressing two-star ranking.

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

Endocyte facts

Headquarters (founded)

West Lafayette, Ind. (1995)

Market Cap

$590.7 million

Industry

Pharmaceuticals

Trailing-12-Month Revenue

$49.2 million

Management

Co-Founder/CEO Ron Ellis
Co-Founder/Chief Scientific Officer Philip Low

Return on Equity (average, past 3 years)

(35.3%)

Cash/Debt

$134.8 million / $62.1 thousand

Competitors

Nektar Therapeutics
Sunesis Pharmaceuticals

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

On CAPS, 10% of the 20 All-Star members who have rated Endocyte believe the stock will underperform the S&P 500 going forward.

Just last week, one of those Fools, zzlangerhans, touched on the stock's seemingly unsustainable price run:

Kudos to those who saw the opportunity when Endocyte was beaten down, as the share price rebounded once it became clear that the company would submit vintafolide for accelerated European approval regardless of the negative OS data and partnered the drug with Merck globally on very favorable terms. The stock has gapped up at regular intervals and the latest may be occurring as I write. Nevertheless, I think the valuation has become excessive given the possibility that CHMP might not wish to give a favorable opinion with the topline PFS data from the PROCEED phase III trial of vintafolide expected in H1 2014. Even if CHMP issues a favorable opinion, PROCEED will have to yield positive PFS and likely OS data to maintain approval and have a strong commercial impact. I missed the easy money here but those more fortunate would be wise to take at least some of their profits off the table.

While you can certainly make quick gains in speculative biotech stocks, the best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.


Read/Post Comments (4) | Recommend This Article (2)

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 July 08, 2013, at 3:49 PM, tjsimone wrote:

    Brian:

    "On CAPS, 10% of the 20 All-Star members who have rated Endocyte believe the stock will underperform the S&P 500 going forward."

    ECYT to pull back based on 2 MF's believing it will?

    Then you use a quote by zzlangerhans to support your article? Someone who admits he missed the move! "I missed it, but now I know?" Really...

    Here is some fodder for you. I am in ECYT since 3....its going to 35 long term, 20+ short term. if it does pullback, back up the truck, and load up!

  • Report this Comment On July 15, 2013, at 6:20 PM, tjsimone wrote:

    zzzzzzzzz.......

  • Report this Comment On July 31, 2013, at 10:40 AM, tjsimone wrote:

    Still waiting on that pullback Brian?

  • Report this Comment On July 31, 2013, at 10:40 AM, tjsimone wrote:

    Still waiting on that pullback Brian?

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2525309, ~/Articles/ArticleHandler.aspx, 9/1/2014 3:32:21 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Apple's next smart device (warning, it may shock you

Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early-in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!


Advertisement