My Watchlist

Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.

Recs

4

2-Star Stocks Poised to Plunge: Human Genome?

By Brian D. Pacampara | More Articles
January 25, 2012 | Comments (3)

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, biopharmaceutical company Human Genome Sciences (Nasdaq: HGSI  ) has received a distressing two-star ranking.

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

Human Genome facts

Headquarters (Founded) Rockville, Md. (1992)
Market Cap $1.8 billion
Industry Biotechnology
Trailing-12-Month Revenue $106.7 million
Management CEO H. Thomas Watkins (since 2004)
CFO David Southwell (since 2010)
Return on Equity (Average, Past 3 Years) (71.6%)
Cash/Debt $539.8 million / $524.6 million
Competitors Biogen Idec
Emergent BioSolutions
Genentech

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

On CAPS, 20% of the 713 members who have rated Human Genome believe the stock will underperform the S&P 500 going forward.

Earlier this week, one of those Fools, All-Star zzlangerhans, took another short-shot at Human Genome:

I haven't done very well with Human Genome, missing an enormous potential gain on the success of Benlysta in clinical trials and then getting crushed when I thought the stock was oversold after approval. Let's see if I have better luck this time. ...

The rise in share price seems to be predicated on optimistic language from management as well as takeover speculation. However, we already know that the net Benlysta revenue for Q4 will be about 26M, which isn't much of a jump from 7.8M and 18.8M in the preceding quarters. It certainly won't be enough to make much of a dent in the company's huge quarterly losses. A recent 500M debt financing indicates that the company may be digging in for a prolonged period of negative cash flow.

What do you think about Human Genome, or any other stock for that matter? If you want to retire rich, you need to protect your portfolio from any undue risk. Staying away from dangerous stocks is crucial to securing your financial future, and on Motley Fool CAPS, thousands of investors are working every day to flag them. CAPS is 100% free, so get started!

Want to see how well (or not so well) the stocks in this series are performing? Follow the new TrackPoisedTo CAPS account.

The Steve Jobs Betrayal
You may already know that in the final year of his life, Jobs revealed a stunning betrayal — and told his biographer, "I will spend my last dying breath... and every penny of Apple's $40 billion in the bank to right this wrong." What was it that made Jobs so irate — and why could it make a few in-the-know investors some major profits over the coming months and years?

Enter your email address below to find out what made Jobs so enraged!

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 may not 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.


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 January 25, 2012, at 12:49 PM, barristerfool wrote:

    You indicated that you have lost money trading this stock on the fundamentals. Perhaps the problem is that trading HGSI on fundamentals alone is analogous to fighting with one hand tied behind your back. The stock has now broken above the 50-day moving average, just as it did in 2009 prior to a 20-point run. ADX is 37, and the MACD histogram is bullish. This is not a time to short this stock, in my view.

  • Report this Comment On January 25, 2012, at 10:24 PM, nbnguy wrote:

    I give your article a 1 star.. own very, It think it takes time for a drug like Benlysta to get started..

    By the way HGSI has already plunged. You should have wrote this when t was at $30. Think about it, selling at $30 with no drug in the pipe line and now they do have a drug to sell, give them time..If the numbers go backwards on sales this month then you might be correct. Then it might Plunge.

    As usual I think most of your articles are 1 star at best..

    Good luck shorting this

  • Report this Comment On January 27, 2012, at 3:03 PM, steveat wrote:

    I bought this stock when it was $55. Good thing I didn't buy that much!

Add your comment.

Compare Brokers

Fool Disclosure

DocumentId: 1764994, ~/Articles/ArticleHandler.aspx, 5/28/2012 12:16:57 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...

Today's Market

updated 2 days ago Sponsored by:
DOW 12,454.83 -74.92 -0.60%
S&P 500 1,317.82 -2.86 -0.22%
NASD 2,837.53 -1.85 -0.07%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

5/25/2012 3:59 PM
HGSI $13.61 Down -0.01 -0.07%
Human Genome Scien… CAPS Rating: **

Advertisement