To: Paul Senior who wrote (4724 ) 8/20/1998 2:37:00 PM From: Michael Burry Read Replies (1) | Respond to
People often ask me why I don't recommend or invest in medical companies. One of the reasons is that I find the field on the whole very unpredictable. Few people on this thread take any idea and buy without proper due diligence, however. And so I am going to recommend that those with the inclination for discovery take a look at Incyte. Incyte is a biotech company, and it is very hard to find or define value for such companies, largely due to incredibly negative cash flow and a reliance on a cheery future. However, Incyte is now significantly profitable with decent cash flow and low liabilities. It is a service company that sells info re: genes. IMO, this company can be to medical research and future therapies what Microsoft is to software. In other words, it has and will continue to have the info that other companies require to prosper. There are high barriers to entry in terms of technology, time, and capital requirement, and the field is narrowed down to really two significant competitors, Perkin Elmer and Incyte. Incyte IMO has the edge for the long haul. Recently, the share price has been tanking on the perception that it overpaid for a recent acquisition. Overpaying for acquisitions is often a sign of desperation, and Incyte is not desperate. I've been waiting patiently for the low 20's, and lo and behold this market correction has taken Incyte to that level. I have not bought yet, but am nearing a buy, and figured I'd throw the idea out there.
