Value Investing Value Investing In Biotech |
| Posted: 03 Aug 2018 01:36 AM PDT Like the rest of you here, I am a firm believer in value investing. However, I am also a scientist, so unsurprisingly the most interesting companies that I find myself analyzing are biotechnology/pharma (at this point, all pharma companies are heavily focused on biotechnology). Looking for "value" in biotech, , mainly those on the smaller cap side, faces a number of challenges- so I figured that I'd ask those of you here for your thoughts on the subject (the biotech sector did not exist when the last edition of The Intelligent Investor was written). Some of the challenges facing investors are analogous to those presented by traditional tech companies (how do you project growth, dealing with negative cash flow, etc). However, I think there are a number of unique and more daunting challenges. The main question that I have is the following: Is it possible to invest in small cap biotech as a value investor? Because of the limited duration for exclusivity of drugs once they reach the market (~8 years), projecting the future value of a company is heavily dependent on the pipeline in clinical trials and under preclinical investigation. For larger companies, preclinical studies are highly secretive and especially difficult to analyze. The first approach to consider is to try to predict clinical trials. I find this to largely be a fool's errand, not because it is impossible to do so, but more because I think the chances of beating the market/identifying value here are slim. The second approach that I have considered is to focus on early biotech startups. I think that identifying companies focusing on unique/interesting scientific areas, mainly with technology that can serve as a platform for multiple avenues of target investigation-while ignoring the biotech IPOs that are rehashing old strategies or focused on a single drug/target- can serve as a means to provide value. I also now only buy if the price of the company is below the IPO price or near the 52 week low. My main qualm with this second strategy is pricing-what makes a company with only preclinical or phase 1 data worth 300 million vs 200 million vs 1 billion? I am happy to list specific examples of companies for further discussion if anyone here is interested. Thank you for your thoughts. [link] [comments]  |
| Equity Research Reports Old Or New Posted: 02 Aug 2018 05:51 PM PDT Hi, Would anyone know where to find old or new equity research reports? Or if someone happens to have a file , could they link it to me? I'm hoping to become an ER analyst in the next few years but I've been struggling with finding actual reports without having to pay. It doesn't matter if they are new or older I just want to read through as many as I can to get a feel for the format and writing style. As well as see some of the thought process while explaining different investments. Thanks in advance [link] [comments]  |
| You are subscribed to email updates from Value Investing. To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
| Google, 1600 Amphitheatre Parkway, Mountain View, CA 94043, United States | |
No comments:
Post a Comment