Qiagen is the leader in nucleic acid purification kits.
They have introduced a number of new products lately (in the
last 4 months): For instance they now sell products for
the PCR (polymerase chain reaction), a field plastered with
patents from Hofmann La-Roche but still very profitable.
Why is there so much optimism in the future of the company ?
I asked this question to myself several times and I
currently think that the company is in a quite lucky position:
(This comes from my own experience with their product)
I use their purification kits since they came out with this
stuff (about 8 years ago). I think that the first experiments
I did with their colums was when they were not yet on the
market but I got them for testing ...
Since then, I switched several times to their competitors products
and so did colleagues I asked. However, in all the cases I/we
switched back to qiagen because one of the competitors products
failed at some point (sometimes they had a bad lot, or the usage
was not so convenient, or so). Although qiagen kits are more expensive
(almost twice) than the competitors stuff, they are far more reliable!
In addidion, their new PCR products are working really well (I got
a sample) - If they prove the same realibility also in other
product fields, then their revenues will soar.
With their margin (I think that production cost & RD & selling, ect is
just 30% of the final price of the product), they will increase earnings again (maybe not 100% anymore - but 50% over the next
2-3 years seems to be realistic).
The earnings increase from a research grant is interesting - I
also read this and I don't know where it comes from. Maybe from
the BMFT (German Science Ministry), they have a history in supporting
companies with research grants.
However, as it was mentioned before on this board, the short
interest is high, insiders are planning/are selling, the P/E
is constantly at about 100 and and and.
I also thought about selling short (when the price jumped a couple
of weeks ago) - but I would be cautious. the price moved so easily
from an already ridiculous 28/29 level to 35/36 - it could easily
jump again !?!?
Personally I think that we should see a pullback to the low 30ties/
high 20ties within a couple of months. And thewre is still the possibility that they disappoint the expectations in the (near)
future .... then this stock will be extremly punished and it's
P/E will be reduced to a value between 15 and 20 ...
but this is my personal opinion.
I am still a lover of their products - but the market they compete in
is very though. The qiagen-boom could hold on for a couple of years
but it also can be over within a couple of months - who knows ?
Hope that helps,
S. |
