More II from JPM - Invitrogen, Barr
Gave a listen to a couple of more companies today (well yesterday by posting times). I will continue this until earnings start to displace them.
First up Invitrogen. I am 1 for 2 with Invitrogen in CAPS. They have stumbled in 2006 (their words) due to integration issues with past acquisitions and product mix. They laid out a strategy moving forward and got a nice jump post conference. The strategy looks to me to play out in later parts of 2007. I think this is a good candidate for shorting again going into the quarterly announcement if it stays much above 60.
Certainly Invitrogen is a world class company in a nice spot i.e. consumables and low end instrumentation for BIotech. They are a great company to be a customer of - but that doesn't make them a great investment. Still, reputation counts for a lot.
OF note - only 40% of the sales head to industry, 60% are government and academic. This is a vulnerability IMO, but not to the extent of the high $$ instrument manufacturers. I will be particularly interested in the growth rates for Asia/pacific rim which is currently 15% of the business.
Barr pharmaceuticals is top flight generics company, focus on women's health (birth care, hormone replacement etc.). They got a lot of press in the last year with the Plan B over the counter approval by the FDA (about damn time). The recent Pliva purchase opens up Europe to this US based company. Integration issues could dominate 2007, but worth a long term bullish call IMO. They are also, now with Pliva's facilities and abilities, looking to be a leader in bio-generics, when such a market comes open. I don't think the FDA can stall too much on this, especially with Epogen being such a big question on medicare reimbursement issues (perhaps a short of Amgen is called for as well).