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Biotech / Medical : Centocor ( CNTO )
CNTO 0.000010000.0%Feb 6 9:30 AM EST
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To: .com who wrote (26)10/26/1996 9:46:00 AM
From: Thean   of 965
 
Actually I am in the same shoes as you are. I wish I know how much of the recent news is priced into current CNTO price. One bold prediction the company announced a few months ago was that the company will turn earning positive this year. I don't know if they meant earning positive for the entire fiscal year or at least earning positive by the last quarter of the year. By the mean estimates of the analysts one can definitely not see how they can turn earning positive for the entire fiscal year unless they will earn $0.25 or so more in the last quarter. The mean estimate was, I recall, $0.08 for the12/96 quarter.

As to the right entry point, I would offer the this: if you want to hold this long term, I would go ahead and get a stake at current price. The worst is CNTO dips temporarily to below $30 (strong support at $24) and rebounded to above $30 before the next quarterly comes out. The truth is no one can predict the high's and low's of a stock price with great accuracy and I'm sure you agree.

I don't think the market today and for the forseeable future will tolerate high PE with only projected earnings. There is hardly any mercy for disappointment. Just look at Chiron last quarter. I know things are on track for CNTO due to its Reopro results, one question one can ask is what would be Reopro's total sales next year (third year since launch) and see if projected next year earning alone will make CNTO justify a PE of 30 or so. In translation, CNTO has to make a buck or more next year. Beside getting wider indication for Reopro, CNTO's other projects are still not next year's story. Hope this helps.

PS, I don't know when CNTO's earning will come out either.
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