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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

Industry

Biotechnology

Trailing-12-Month Revenue

$48.6 million

Management

Chairman/CEO Wei dong Yin
CFO Danny Cheng

Return on Equity (average, past 3 years)

(8.5%)

Cash/Debt

$90.9 million / $34.5 million

Competitors

GlaxoSmithKline
Sanofi

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.

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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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Stocks Mentioned

Sinovac Biotech Ltd. Stock Quote
Sinovac Biotech Ltd.
SVA
Sanofi Stock Quote
Sanofi
SNY
$55.50 (-0.63%) $0.35
GlaxoSmithKline plc Stock Quote
GlaxoSmithKline plc
GSK
$44.42 (-1.22%) $0.55

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