Biotech Values

[Rocky3]

My instinct says that when you see a big-cap stock with dramatically accelerating earnings, with a potential slowdown only several years in the future, the mainstream mutual funds and pension funds will be drawn to it like moths to a flame.

Totally agree. That is why I have been so surprised about the lack of upward movement in the last 2-4 weeks while the script numbers have been disclosed. Of course, there was a huge move last year that was based upon significant long term sales and earnings growth projections. But they are no longer as much projections as known math.

One of the things that I might be putting too little emphasis on is its current market cap. Again, it is the law of big numbers. Is it really possible that it could have a market cap of $250B+? Doesn't take a whole lot of extreme assumptions to see earnings of $5/sh and a p/e of 30 for a company growing earnings at ~100%. But we are not there yet. Made a lot of money on AMGN in the '90s on accelerating sales and earnings which exceeded expectations. But that was from a very low valuation. Plus AAPL, CSCO, and MSFT did pretty well from big numbers for a long time.

Appreciated the various viewpoints.