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Seattle Genetics, Inc. Message Board

  • ricardouno ricardouno Mar 29, 2013 11:40 AM Flag

    Morningstar Report Today

    For what little it may be worth: this is taken from Morningstar's sector report from today:

    "Buybacks and Acquisitions, Not Deleveraging, Are Key Cash Deployment Strategy
    Reducing debt hasn't been the greatest point of emphasis for most health-care firms, considering their strong cash flows and manageable leverage. Buybacks remain the preferable cash deployment strategy outside acquisitions and reinvestments, although their pace has decelerated as of late. With growth prospects still uncertain given the macro environment in the U.S. and Europe, cheap debt remains the key source of capital to fund growth strategies, particularly acquisitions. We believe Big Pharma firms will probably continue to rummage around biotechnology for their next targets, and our top five biotech takeout targets all offer the combination of highly sought factors: pipeline potential, therapeutic area attractiveness, collaborative fit, and digestible size. Our top biotech picks are Onyx (ONXX), Regeneron (REGN), Incyte (INCY), Biomarin (BMRN), and Seattle Genetics (SGEN)."

    Good luck to all !


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    • Morningstar's top picks are not made without much consideration. I'm a buyer of their top pick INCY now and have put some of the proceeds from my recent sale of SGEN there.
      INCY is a little ahead of SGEN on fundamentals. It is another Baker Bro top pick. It's current price should be higher than SGEN IMO.
      Management there made a minor misstep that SGEN has avoided. They were too enthusiastic and overstated their 1st year guidance. No worry about that here. As a result they attracted a horde of class action attorneys.
      They also had the misfortune of having a patient die of PML and may get a boxed warning like SGEN.
      Those minor missteps have created a buying opportunity in INCY IMO. When and if it trades at par or higher with SGEN I'll be back in here. I believe SGEN may have greater long term potential.

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