Why Coronado Biosciences Is Poised to Plunge

Market-lagging returns could be written in this 2-Star.

Brian D. Pacampara, CFA
Brian D. Pacampara, CFA
Apr 15, 2013 at 11:49AM
Health Care

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, biotechnology company Coronado Biosciences (NASDAQ:FBIO) has received a distressing two-star ranking.

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

Coronado facts

Headquarters (founded)

Burlington, Mass. (2006)

Market Cap

$295.6 million

Industry

Biotechnology

Trailing-12-Month EBITDA

(26.1%)

Management

Chairman/CEO Harlan Weisman
CFO Lucy Lu

Return on Capital (average, past 3 years)

(67.4%)

Cash/Debt

$40.2 million / $14.2 million

Competitors

Abbott Labs
Biogen Idec

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

On CAPS, 15% of the 20 members who have rated Coronado believe the stock will underperform the S&P 500 going forward.

Just yesterday, one of those Fools, All-Star zzlangerhans, succinctly summed up the Coronado bear case for our community:

Whipworm eggs to treat autoimmune disease might sound completely reasonable to some people, but I see it as farfetched to the border of insanity. If you wonder why high level executives and scientists would spend years pursuing a completely irrational scientific endeavor, my answer would be that I don't know but I see it happen all the time. The fact that Coronado management is confident does not make me confident. Pull out all the pretty epidemiologically colored world maps you want, I will snarf my corn flakes if I open up my watchlist one morning and find out this works. Topline results from the TRUST-1 phase II trial of the magic beans in ulcerative colitis are expected in the second half of 2013, so we don't have too long to wait.

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