Published October 03, 2012
Here is a quick look at three top-performing biotech stocks, each with a consensus recommendation (among analysts) of Strong Buy. They are Ariad Pharmaceuticals (ARIA), Merrimack Pharmaceuticals (MACK) and Synageva BioPharma (GEVA).
Shares of this Cambridge, Massachusetts-based oncology company reached a multiyear high earlier this week. Ariad's market capitalization is currently near $4 billion. The long-term earnings per share (EPS) forecast is about 25 percent, though the company has posted net losses in the past three quarters. Short interest is more than six percent of the float. All but one of the analysts polled by Thomson/First Call rate the stock at Buy or Strong Buy. They believe the stock has some room to run as the mean price target is about 10 percent higher than the current share price. That is a level it has not seen since 2000. Over the past six months, the stock has outperformed competitor Novartis (NVS) as well as the broader market.
Merrimack develops and prepares to commercialize medicines paired with companion diagnostics for the treatment of cancer. It has a market cap of more than $800 million and it is headquartered in Cambridge, Massachusetts. It reported net losses in the previous two quarters and is expected to do so again in the current quarter and the next. The return on equity is in negative territory. Short interest is less than three percent of the float. All four of the polled analysts who follow the stock recommend buying shares; three of them rate it a Strong Buy. Their mean price target, or where they expect the share price to go, is about 26 percent higher than the current share price. That would be an all-time high. Over the past six months, Merrimack has outperformed competitor Immunomedics (IMMU) and the broader market.
Based in Lexington, Massachusetts, this clinical stage biopharmaceutical company sports a market cap of about $1.4 billion. The company has reported net losses in the past four quarters, and its return on equity is in negative territory as well. Short interest in shares is more than six percent of the float. All eight of the analysts surveyed recommend buying shares; five of them rate it a Strong Buy. But the mean price target is only about 2.5 percent higher than the current share price, which reached an all-time high today. The share price is up more than 115 percent year to date. Over the past six months, the stock has outperformed competitor Gilead Sciences (GILD) and the broader markets.
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