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Forest Laboratories Inc. Message Board

  • qqstocks qqstocks May 16, 2012 3:58 PM Flag

    Best Summer Stocks And Books

    Drugmaker Forest Laboratories (FRX, 34) has a checkered past—too much of one big patent-expired antidepressant (Lexapro)—and 2010 criminal settlements and allegations.

    That’s all in the past. The future is brighter with a great stream of 17 new and upcoming products for varying ­ailments, including antipsychotic Cariprazine and antidepressant ­Viibryd.

    Forest is among the 100 largest global R&D spenders. Thirty-five years ago I fathomed the price-to-research ratio—for buying good firms at less than ten times annual R&D spending. FRX is a rare qualifier. It also sells for 18 times March 2013 earnings.

    .. http://www.forbes.com/sites/kenfisher/2012/05/16/best-summer-stocks-and-books/?partner=yahootix

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    • Although Ken Fisher is respectable, he is playing a role of firefighter in that article.

      "T(t)oo much of one big patent-expired antidepressant (Lexapro)—and 2010 criminal settlements and allegations."

      "That’s all in the past." No, no, the "lexapro" effect isn't fu;;y spinning yet. It is in the first stage from March to September with only TEVA selling generic lexapro (except MYL selling the authorized one). The full effect will hit after September with so many Indian companies. Analysts estimate that Jun12 EPS will be $0.36 and Sep12 EPS will be $0.14. Fisher doesn't want to talk about that, and just said "The future is brighter with a great stream of 17 new and upcoming products for varying ­ailments, ...... It also sells for 18 times March 2013 earnings." First, Ken is wrong -- the P/E for FY-Mar13 woulod be about 34 (with estimated EPS $0.99), and 18 is for FY-14Mar (with estimated EPS $1.86); second, 17 new and upcoming product only can push P/E to 18!!! What a SHAME!!! And, don't forget, the Namenda patent cliff will hit FRX at the beginning of 2015.

      I don't know why respectable Ken wrote that irrespectable article.

 

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