What's the magic number?
I know that most mutual funds and indexes don't touch stocks below a certain market cap; either by choice or by charter.
I assume that there is no one magic number that everybody plays by. But is there general concensus around a particular zone?
Basically, if XOMA dips below $250M (currently at $270M), will we be in danger of loosing some major support?
Here's my $0.02.
My wife has a majority of her 401k savings tied up in Fidelity Magellan. Ergo, I receive their periodic reports. Each time one comes in, I check out their "Drug & Pharmaceuticals" stock holdings for any Biotechs. For many years, this was boring. It was always the same, Genentech and Amgen, Genentech and Amgen, Genentech and Amgen.
But this pattern changed recently. Around a year ago (major wag), they dumped Amgen. Good move. Then in their most recent report (9/30/97), I saw some new names: Alkermes ($400M market cap), Gilead ($1B), and Hyseq ($160M).
Not knowing when Fidelity Magellan actually bought the stock, Hyseq's 52-week high only brings a market cap of $273M.
I find the Alkermes and Hyseq holdings in such an enormous fund to be pleasantly surprising. |
