Tuesday, July 16, 2013

Why Insmed Is Poised to Keep Pulling Back

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, biopharmaceutical company Insmed (NASDAQ: INSM  ) has received a distressing two-star ranking.

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

Insmed facts

Headquarters (founded)

Monmouth Junction, N.J. (1999)

Market Cap

$347.2 million

Industry

Biotechnology

Trailing-12-Month EBITDA

($46.0 million)

Management

CEO William Lewis (since 2012)
CFO Andrew Drechsler (since 2012)

Return on Equity (average, past 3 years)

29.2%

Cash/Debt

$81.6 million / $19.5 million

Competitors

Forest Labs
Gilead Sciences
Novartis

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

On CAPS, 18% of the 28 All-Star members who have rated Insmed believe the stock will underperform the S&P 500 going forward.

Just yesterday, one of those Fools, All-Star zzlangerhans, touched on the stock's seemingly unsustainable valuation:

I see the market cap over [$300M] excessive given the unresolved carcinogenicity concerns, the weak results of CLEAR-108 which met the primary endpoint in name only, and the questionable commercial prospects of an antibiotic for non-tuberculous mycobacterial infection even if the results of TARGET-NTM and a future phase III trial are positive.

While you can certainly make quick gains in speculative biotech plays like Insmed, the best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.

No comments:

Post a Comment