Based on the aggregated intelligence of 130,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, drugmaker Forest Labs (NYSE: FRX ) has earned a coveted five-star ranking.
With that in mind, let's take a closer look at Forest Labs' business and see what CAPS investors are saying about the stock right now.
Forest Labs facts
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Headquarters (founded)
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New York, NY (1956)
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Market Cap
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$6.51 billion
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Industry
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Pharmaceuticals
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Trailing-12-Month Revenue
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$3.85 billion
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Management
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CEO Howard Solomon (since 1977)
CFO Francis Perier Jr. (since 2004)
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Return on Equity (average, last three years)
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21.4%
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Competitors
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Eli Lilly (NYSE: LLY )
Pfizer (NYSE: PFE )
Wyeth (NYSE: WYE )
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CAPS members bullish on FRX also bullish on
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Johnson & Johnson (NYSE: JNJ )
General Electric (NYSE: GE )
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CAPS members bearish on FRX also bearish on
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Texas Instruments (NYSE: TXN )
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Sources: Capital IQ (a division of Standard & Poor's), and Motley Fool CAPS.
Over on CAPS, 447 of the 470 members who have rated Forest -- or 95% -- believe the stock will outperform the S&P 500 going forward. These bulls include TheGarcipian and Gtrinvestor, both of whom are ranked in the top 0.4% of our community.
Just last week, TheGarcipian noted that Forest "is one of the few in the S&P500 (or so it seems) that has a... good ROA (13.0%) and ROE (22.4%), and has positive margins both at the profit margin level (22%) and the operating margin level (24.9%)."
In a pitch from one day earlier, Gtrinvestor urged our community to see the Forest for the trees:
Hmmm, $3.5 B of tangible assets (of which most is in cash and investments) and no debt vs a market cap of $6.5 B. A non-stop onslaught of positive operating cash flow for the past several years (and quarters) with very little capex (so the company is throwing off a bunch of free cash flow). Sales have risen for the past several years (although are mostly flat for the past 4 quarters), so its not all a bed of roses... but what really is in this economy. The company's PE is about 8, which will probably stay flatish for the next year or so given the economy, even in the drug industry, but with the cash on hand and industry it is in, this may not be a bad investment.
What do you think about Forest Labs, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 130,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.
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