Here is some info on AVGN:
www1.wsrn.com
Among the noteworthy items are:
1) An extremely low price/book ratio [1.39].
2) Fairly low institutional ownership [10 inst. 13.8% of shares]
3) Strong balance sheet with almost no long term debt and a current ratio (current assets/current liabilities) of 17.5
Add to this a very strong patent position in AAV technology and the likelihood of partnership announcements and you have a pretty good case for AVGN being purchased either as a value investment or as a buyout candidate. Since the trading volume is very low, it shouldn't take much buying to move it up significantly.
If you compare AVGN with other small biotech companies, what stands out is a much lower price/book ratio and generally stronger balance sheet and the lack of big pharmaceutical alliances. Given the company's strong proprietary position in AAV-based cell therapy, the likelihood of partnership announcements, which could significantly boost the share price, is a big plus. Add to that the small institutional ownership and you have a favorable situation in the opportunity to move up on new institutional buying.
Because the company is fundamentally very cheap with promising technology, there is always the possibility of a buyout. Even with anti-takeover provisions, AVGN could be bought out at a bargain price. Compare it with CEGE--another cell therapy company--and you can see that AVGN has a much smaller market cap [$20 million vs. $120 million] and a significantly stronger balance sheet, particularly with regard to long term debt.
Although there are many biotech values out there, I think this is one of the sleepers that could easily awaken and double or triple in price very quickly. Needless to say, I own it so you should do your own research and decide for yourself.
Baird |
