Thursday, January 12, 2006

Big Cap Biotech = Dead Money

The biotech rally is going to take a little rest. On Monday, Genzyme released Q4 revenues that were below expectations. Their 2006 revenue guidance was pretty much as expected with the earnings per share estimates on the softer side. Genentech released their Q4 numbers on Tuesday and it met expectations. That’s not enough for a company like Genentech that has always beaten their numbers. My take on this… The big cap biotech’s are pretty much dead money until we get the Q1 results. I think the companies issued very conservative estimates for the upcoming year. I’m going to wait and see the Q1 results before doing anything. On the other hand, I like the action of the techs and may put some new money there…


At January 12, 2006, Blogger Mathieu said...

With the market probably headed to a sideway moving year like 2005, big caps in general shouldn't move much in 2006 (IMHO)

Several industries are in some kind of transition (video games going up a generation, web becoming web 2.0, sofware becoming online apps, car making going chapter 11, airlines trying to emerge from said chapter, banks handling debt from 2005 negative savings, pharma trying to recuperate from past legal woes)

I have a feeling that 2006 will be a year of small and midcaps.

But, I had a feeling that GOOG was overpriced at IPO, so my crystal ball isn't perfect


Post a Comment

<< Home