Why Repligen Corporation Shares Were Slammed

Repligen shares sink after the company reports its fourth-quarter earnings results. Is this dip a buying opportunity or a reason to keep your distance.

Mar 6, 2014 at 1:51PM

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 Repligen (NASDAQ:RGEN), a life-sciences company that develops consumable products used in the process of manufacturing biological drugs, fell as much as 16% after reporting its fourth-quarter earnings results before the opening bell.

So what: According to its report, Repligen delivered total quarterly revenue of $15.4 million, an 18.2% decrease from the year-ago quarter, as adjusted EPS fell by two-thirds to just $0.10 from $0.30. Repligen blamed its reduced revenue on a one-time out-licensing agreement with Pfizer that resulted in a $5 million upfront payment last year, but no payment this year. By comparison, Wall Street estimates had pegged Repligen for $15.9 million in revenue and $0.14 in EPS, meaning it missed on both accounts. If there was a bright spot, it was that Repligen's bioprocessing revenue jumped nearly 7% to $10.4 million.

Looking ahead to fiscal 2014, Repligen issued guidance calling for revenue in the $54 million-$57 million range, including product-revenue growth of 10%-15%. Net income for the year is expected to total $7 million-$9 million, or $0.21-$0.28 in EPS. This estimate, however, bracketed a bit higher than the Street's consensus of $53.1 million and $0.22 in EPS for the full year.

Now what: I wouldn't be too surprised by today's move lower because Repligen doesn't have a lot of Wall Street coverage and is liable to be whipsawed for beating or missing the one or two estimates available. The key takeaway here is that Repligen's bioprocessing business, which is its bread and butter, has the potential to grow organically by low double digits. This seems like a pretty fair growth target for the remainder of the decade, yet I'm still a bit taken back by its projected P/E for 2014, which is close to 60 at the moment. While I appreciate Repligen's organic growth, I'd rather watch it from the sidelines until its bottom-line profit catches up with its current valuation.

Repligen shares have soared over the past year, but even it may struggle to keep up with this top stock in 2014
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Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

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A Financial Plan on an Index Card

Keeping it simple.

Aug 7, 2015 at 11:26AM

Two years ago, University of Chicago professor Harold Pollack wrote his entire financial plan on an index card.

It blew up. People loved the idea. Financial advice is often intentionally complicated. Obscurity lets advisors charge higher fees. But the most important parts are painfully simple. Here's how Pollack put it:

The card came out of chat I had regarding what I view as the financial industry's basic dilemma: The best investment advice fits on an index card. A commenter asked for the actual index card. Although I was originally speaking in metaphor, I grabbed a pen and one of my daughter's note cards, scribbled this out in maybe three minutes, snapped a picture with my iPhone, and the rest was history.

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I love the exercise, because it makes you think about what's important and forces you to be succinct.

So, here's my index-card financial plan:


Everything else is details. 

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