Finding Value In Sepracor – SEPR
Jan 17, 2008 Small Cap Stock Picks
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
