SEPR came up on my technical analysis scans the other day which looked attractive as the chart look quite attractive on the long side. Digging a little dipper we can see that SEPR had a huge decline in price action mid year due to a big drop in earnings for Q2 and announcement of a 300 personnel cut back to cut costs. Price dropped from its peak near $62/share as low as $22/share. over the last 5 months Sepracor has formed an excellent looking base which lead to the formation of a great looking symmetrical triangle that has been confirmed on a breakout to the upside as of late.
SEPR had a rough year in 07′ expecting to report 1.46eps compared to 06’s 1.60eps. Although looking forward they’re expected to have a huge year in 2008 with analysts expecting 2.33 eps giving SEPR a very low P/E 12.85 and depressed valuation among its industry peers. The biotech industry is currently trading at a 28.7x earnings multiple indicating SEPR’s future fair value within its industry at around $66/share.
I like the forward earnings and valuation of this compnay. Not to mention the great looking stock chart. I purchased a 1/2 position Wednesday at 29.90
