I hated it, but I had to sell Genetech (DNA) to Roche March 27, 2009Posted by deminvest in DNA Genetech, growth stock, nasdaq, Nasdaq stock, stocks.
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I hate when a company that I like and that hasn’t given me my well deserved 40% gain is bought by some bigger fish.
This is what happened to my 12 DNA shares I had bought at $81 each in April 2007.
From various experiences, I realized that, when there is some company buying shares I own, it is better to sell them on the market before the sell out actually happens.
This continues to amaze me. Maybe because of old minded analysts looking back to the past bubble, maybe because there is some irrational fear, a wonder is happening:
growth stock are becoming dirt cheap: their revenue and their profits continue to growth, but stock-price lags.
Something really funny is happening… Simple Math: if earning increase, but price doesn’t, the P/E ratio goes down and down and down…
If this goes on, eventually growth stocks will have same (waiting enough even lower…) P/E ratio of lame stock of companies that don’t grow!
Last week I discussed how this weird funny thing is happening with Google and Ebay (I must not forget to buy a pair more GOOG shares).
I thought it was because the “old big men” are afraid of the Internet… But today I found out Genetech (DNA), the Biotech drug company has a forward P/E of 24 only!
A company that is growing Qtrly Revenue Growth (yoy) 43.40% and Qtrly Earnings Growth (yoy):75.10% and Posted today earnings beating expectations, is such a bargain!