Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Shorting stocks: Broken stocks - Analysis -- Ignore unavailable to you. Want to Upgrade?

To: tradermike_1999 who wrote (2505)	3/19/2001 6:05:25 PM
From: Q.	Respond to of 2506

To value development stage companies, especially drug companies, the best ratio is market cap / cumulative R&D expenses. Typical ratios vary. If you think the drug prospects are lousy, it merits a ratio of 1 or less. If you think the prospects are exceptional compared to peer companies, it might get a ratio of 10 or more. ADLR has a market cap of $466 M, while R&D expenses since inception are $33.6 M, so this stock has a ratio of about 14, which is a little on the high side. I personally avoid these because I don't have any way of knowing whether the drug prospects are good. Unless, of course, the company looks like a scam, and then I'll short it.