Price/Earnings (TTM) 44.7x
Price/Book (MRQ) 10.2x
Price/Cash Flow (TTM) 46.4x
Price/Sales (TTM) 10.7x
No doubt FRX is a good company, but is it really worth what you are paying for it? These remind me of the prices paid for the once high flying Tech darlings ... CSCO,INTC, ect...
You would think people would learn. Remember, Bulls and Bears make money, but Pigs get slaughtered.
I'm going against the crowd and am shorting this one.
Thats what makes a market . I agree with your post 100% . Good luck to you in your investing as well. Sounds like you scored out on FRX so you prob dont need the $$$ as much as i do - LOL. Have a good weekend !
Your analogy of a two way street I could not agree more with. What I was referring to was you could making money on both sides of that street if you change your course at the right time. You feel that FRX at this price is way overpriced and that is fine and decent because it is your opinion. I on the other hand think that with all the positive news about ready to explode on this stock over the next month that the next couple of days will still promote good buying opportunities for this stock. I would agree that at some point in time this stock will reach a position to short I just do not think that position is now. Even if we do not agree with each other we can still agree to disagree without being obscene towards each other. Good luck to you on all your investing. You seem like a man of character and I can respect that.
What i was eluding to when i mentioned that its a 2-way street was that LONGS and SHORTS can make money . As far as going LONG(for me) its not gonna happen anytime soon on FRX. The only scenario would be for me to TAKE THE LOSS and cover my short. I think the stock is way overvalued - whether the market sees it this way is another story . Its one thing to be LONG with a much lower cost and HOLDING , but to be initiating a LONG position here, in my opinion is crazy. If ones cost avg. is much lower than present than holding has been a lucrative stragegy. RISK/REWARD up here seems to be favoring the short side, but like they say - the proof is in the pudding .Time will tell.
Stockbest You are the low life and at the very least ignorant. ANYTIME you would like to back up your words in person be a man and send me your home address and we will take care of this in person. There is absolutely no reason to become this upset with me if you are losing money you idiot! If I had you near me now I would choke the life out of you over your ignorant reply.
Dready I am always happy when I am making money. What I can not understand (and you stated it perfectly "It is a two way street") is why you would not change your course and go long when you noticed the stock continuing to rise day after day. I can tell you this if the stock started going down on bad fundementals or bad news I would be shorting this stock. You are right it is a two way street but if you are on the wrong side of the street where the traffic is you are going to get run over. Use your own philosophy and go long now!
forget the PE ....what about P/S and P/CF ?
Price/Book (MRQ) 10.2x
Price/Cash Flow (TTM) 46.4x
Price/Sales (TTM) 10.7x
Everybody thinks that this stock will grow profits exponentially forever ... This is a PHARMACUTICAL company !!!! While their pipeline is STRONG - many have it priced for perfection. If/when it stumbles and sooner or later it has to , this stock will come crumbling - as the HEDGE FUNDS that are runnin it up the last few weeks will be on the SELL side !
Your valuations are correct for the present years earnings. Projected earnings for next year make the P/E ratio lower next year. Also shorting this stock on the upcoming news of better than expected earnings and 2 weeks following that information on their new drug Memantine (treats mid to late stage Alzheimer patients which is the only one in the world to date) would seem to make your decision foolish. But go ahead for every loser their is a winner and if you go short I and every other long will be receiving your loss in the form of profits. Thank your very much! Anyone shorting this stock for the next month is going to be feel like those poor souls in that plane crash the other day. They did not know what hit them. Heed the warning come over to the profit side and become long on FRX. You will sleep much easier at night.
I could never sleep good at night owning this stock at current valuations. It is like holding a hot potato as one day in the near future, some bit of bad news will occur and the MM's will gap this puppy down $10 and then I'll cover.
I agree that this is a great company, but not at these prices
Remember ... buy the rumor sell the news
You fundamental types have your methods and if they work for you, fine. I can't hazard a guess as to fair valuation but I do see a very extended updrifting chart pattern on relatively low volume, culminating today with distribution at the old highs. This is not a sustainable breakout formation, no matter what news the company is due to report.
I never expected it to get back to these levels but it did...and now it is once again a short.
I feel the need to make a comment. Valuations are a very subjective thing-I was an I-banker for a period of time. While very useful in evaluating potential investments one must remember that since they are tied to earnings they are constantly in flux. Valautions are a very tricky thing to truly evaluate
Is 44 a higher "Current PE" compared to other pharmas? Sure. There is a premium "because" FRX has the "potential and history" of astounding growth while some of the bigger boys like the pfizers of the world are muddled currently with little growth. So yes, there is a reason it trades higher. Now is there growth for years for sure? No, its a risk like anything else. However, those who are buying are under the direction they will continue to grow at a decent clip which makes their "Foward PE multiple" actually much more digestable, even attractive(Obviously as earnings accelerates, a PE drops barring equilibrium)
Those who thinks its overvalued are betting that future growth will slow, therefore FRX "should" no longer command a premium to other pharmas which have anemic growth prospects right now. Who is right, well that people is investing...but please don't be niave enough to assume that your outcome based on "your valuation evaluation" os the right one. People forget people are doing very similar math to you with their assumptions, and actually seeing its valuation attractive. And FRx has a lot of history on its side of earings growth, beating expectations,and "compared" to other pharmas they have at least one "potential" blockbuster in memantine. But I am saying one or the other valaution is correct, I at least respect that their are two, and not that others are idiots for not getting my numbers
Lastly, you lose all intergrity and credibility when you talk about valuations when you compare FRX's Pe to those years ago of cisco, etc. That my friend is insulting. Csco had A PE well over a 100 in an industry than turns on a dime and is inexorably tied to the economy. Frx has more than half the PE, huge growth prospects, an industry where sales are far more stable and consistent, and who's sales are fairly independet of the economy.
Excellent post...except for one thing... about turning on a dime for techs...don't forget how quickly a pharma turns when FDA or generics hit a pharma in bad way. This can be a wicked game on both sides of the aisle.