Replies to post #209663 on Biotech Values

[biocqr]

FMI > Streetsweeper takes a swipe...

http://www.thestreetsweeper.org/undersurveillance/Foundation_Medicine__FMI___Perfectly_Priced_To_Plunge

*Conclusion

While this company is better than most TheStreetSweeper covers, we believe significant downside looms ahead.

First, Foundation's fundamentals have a lot going against them, ranging from rising losses to tough analyst ratings to lagging behind the competition.

Second, even if Foundation ever became profitable, the stock still couldn't justify such a high price. The price would have to be more comparable to competitors.

Third, even if the company does get the FDA/CMS approval, the new anti-Obamacare package poses a major risk. Under Obamacare, doctors ordered tests and those costs were fairly easily passed on to insurance companies.

The new healthcare plan is expected to allow insurance companies to back off on paying some costs ...that's why insurance company stocks have jumped since election day. Companies such as Foundation will likely lower prices as everyone grabs at the same shrinking dollars. A profit may be more difficult to make and sustain.

Foundation's just not a billion-dollar company...certainly not until it becomes profitable.

Foundation's biggest fans, analysts, have even devalued the stock. We see this stock pulling back 30% near-term.