2-Star Stocks Poised to Plunge: Auxilium Pharmaceuticals?
by
Jul 6th 2012 3:30PM
Updated Jul 6th 2012 3:32PM
Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, biopharmaceutical company Auxilium Pharmaceuticals (NAS: AUXL) has received a distressing two-star ranking.
With that in mind, let's take a closer look at Auxilium's business and see what CAPS investors are saying about the stock right now.
Auxilium facts
| Headquarters (founded) | Malvern, Pa. (1999) |
| Market Cap | $1.3 billion |
| Industry | Pharmaceuticals |
| Trailing-12-Month Revenue | $279.6 million |
| Management | CEO Adrian Adams (since 2007) CFO James Fickenscher (since 2005) |
| Return on Equity (average, past 3 years) | (48.9%) |
| Cash/Debt | $163.1 million / $0 |
| Competitors |
Abbott Labs Par Pharmaceutical Cos. Watson Pharmaceuticals |
Sources: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 31% of the 180 members who have rated Auxilium believe the stock will underperform the S&P 500 going forward.
Just last week, one of those Fools, BlacknGold, succinctly summed up the bear case for our community:
This came up in a screen for stocks with the highest gains in the last 4 weeks. With a fair [book value per share] of $1.83 this company is greatly overvalued -- although that is expected in speculative pharma. It is almost breaking even, but only has $89 million in shareholders' equity as of 1Q12. Should be an easy red-thumb target.
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At the time this article was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Motley Fool owns shares of Abbott. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.
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