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2-Star Stocks Poised to Plunge: Geron?

Based on the aggregated intelligence of 125,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, biopharmaceutical company Geron (Nasdaq: GERN) has received a distressing two-star ranking. While one-star stocks have been the worst performers, our data has shown that two-star stocks still lag the market by a significant margin and should be approached with caution; conversely, highly rated stocks have outperformed the S&P.
With that in mind, let's take a closer look at Geron's business, and see what CAPS investors are saying about the stock right now.

Geron facts

Headquarters (founded)

Menlo Park, California (1990)

Market Cap

$561.3 million

Industry

Biotechnology

TTM Revenue

$6.95 million

Management

CEO Dr. Thomas Okarma (since 1999)
CFO David Greenwood (since 1995)

Return on Equity (average, last three years)

(21.3%)

Competitors

Bristol-Myers Squibb (NYSE: BMY)
GlaxoSmithKline (NYSE: GSK)

CAPS members bearish on GERN also bearish on

General Motors (NYSE: GM)
Overstock.com (Nasdaq: OSTK)

CAPS members bullish on GERN also bullish on

Suntech Power (NYSE: STP)
Google (Nasdaq: GOOG)

Sources: Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS. TTM = trailing 12 months.

Over on CAPS, fully 35 of the 151 All-Star members who have rated Geron -- some 23% -- believe the stock will underperform the S&P 500 going forward. These bears include tenmiles and zzlangerhans, both of whom are ranked in the top 1% of our community.

Just this past Friday, tenmiles addressed Geron's seemingly unsustainable price performance: "I hope the science works, but believe the stock is ahead of itself near term."

Copyright © 2008 Universal Press Syndicate.
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Steve Durst's picture

Dear Brian, Thank you for

Dear Brian,

Thank you for your incredibly insightful advice vis a vis Geron. Perhaps you should advise your devotees as to whether or not you shorted this stock prior to your blurb.

Sincerely,

Steve Durst

Anonymous's picture

What? You're comparing GERN

What? You're comparing GERN to BMY and GSK? Shouldn't you be comparing GERN to other companies like STEM, SGEN, and the like? Small emerging biotech companies that might or might not have a future?

Sure. In the short term, GERN will contract back to ~6 once the hype of stem cell therapies fades. Just don't compare them to BMY and GSK, two bloated and stagnant dinos.

Disclaimer: I do not work for GERN and have not investments with GERN.

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