Why Ligand Pharmaceuticals Is Poised to Pull Back

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, biotechnology company Ligand Pharmaceuticals has received the dreaded one-star ranking.

With that in mind, let's take a closer look at Ligand and see what CAPS investors are saying about the stock right now.

Ligand facts

Headquarters (founded)

La Jolla, Calif. (1987)

Market Cap

$437.9 million

Industry

Biotechnology

Trailing-12-Month Revenue

$31.4 million

Management

CEO John Higgins
CFO John Sharp

Return on Equity (average, past 3 years)

(26.5%)

Cash/Debt

$12.4 million / $28.3 million

Competitors

Eli Lilly
Merck
Roche Holding


Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 32% of the 129 members who have rated Ligand believe the stock will underperform the S&P 500 going forward.

Just yesterday, one of those Fools, All-Star zzlangerhans, succinctly summed up the Ligand bear case for our community:

For years I couldn't understand why Ligand wasn't getting any love for their deep and extensive pipeline that had led to many approved drugs. Then after seeing revenues fail to materialize quarter after quarter, I understood that the company was incapable of extracting shareholder value from their partnerships. Now it seems that a new generation of traders has their eye on the Captisol platform as an apparent pathway to profitability, but I remain skeptical. Revenues upticked to [$13.6M] last quarter but the breakdown was typically opaque. The 2013 revenue guidance was a disappointing [$41-$44M]. ... The share price has risen nicely so far in 2013 but I think Ligand doesn't qualify for the buy and hold category.

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Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.

The article Why Ligand Pharmaceuticals Is Poised to Pull Back originally appeared on Fool.com.

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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 Motley Fool has a disclosure policy.

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