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Why Sinovac Is Poised to Keep Pulling Back

By Brian D. Pacampara, CFA - Apr 18, 2013 at 1:45PM

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Market-lagging returns could be written in this 1-Star.

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, biopharmaceutical company Sinovac Biotech (SVA) has received the dreaded one-star ranking.

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

Sinovac facts

Headquarters (founded)

Beijing, China (1999)

Market Cap

$205.0 million



Trailing-12-Month Revenue

$48.6 million


Chairman/CEO Wei dong Yin
CFO Danny Cheng

Return on Equity (average, past 3 years)



$90.9 million / $34.5 million



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

On CAPS, 33% of the 66 All-Star members who have rated Sinovac believe the stock will underperform the S&P 500 going forward.

Earlier today, one of those Fools, zzlangerhans, succinctly summed up the bear case for our community:

Sinovac is now back in unsustainable territory due to the double whammy of a new bird flu epidemic and positive results for the EV71 vaccine for hand-foot-mouth disease. As always, the flu scare will resolve itself without any contribution from Sinovac or any long-term impact on their revenues. And EV71 is no doubt benefiting from public confusion over hand-foot-mouth disease, a benign illness of children that sounds a lot like hoof-and-mouth disease, an economically disastrous disease of cattle. Not every childhood viral illness requires a vaccine. I suspect that even though a few hundred children die of hand-foot-mouth out the million who contract it every year in China, the Chinese government won't see it as a public health issue pressing enough to require a new vaccination program. Eventually, Sinovac will have to live or die based on their hepatitis vaccine programs which of late have looked somewhat stagnant.


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


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