Stock Tips By Derek

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Speculating in Healthcare - Idenix

Posted on November 14, 2013 at 10:25 AM Comments comments (3138)

On Nov 1st Seth Klarman filed his Q3 investments portfolio with the SEC.  One of the new changes listed in the Baupost Groups' holdings was a significant increase in shares of Idenix (IDIX).  You can see the full listing here.  While there is not a lot to like about the financial position of this healthcare firm, they do have a promising pipeline and are entering clinical trials with a Hep C drug.

When I was at MIT I heard Seth Klarman speak about investing, and one of the points he emphasized was that he always looked to find distressed valuations. Even though IDIX jumped 40% when they reported news about the clinical trials on Nov 1st, my assumption is that this stock is still valued at "distressed" levels.

I'm a buyer of IDIX at $4.54. 


UPDATE August 2014

Merck acquires Idenix for $24.50/share.  Position closed out.

Buying EBAY

Posted on August 27, 2013 at 9:50 PM Comments comments (0)

Looking at the recent earning from EBAY, there was a lot to like.  The three things that made me a buyer are the stock's PE, the growth of EBAY's core business units, and the recent price performance of the stock.

  • PE Ratio: The stock is currently trading at a P/E of 25, significantly lower than it's main competitors.  Compared to AMZN and FB which both have triple digit PE ratios, 25 seems like a bargain in the high growth tech sector.  Even compared to GOOG, which is trading at a 26 PE, EBAY seems to be on the lower end of the PE spectrum within the tech industry.

  • Business Unit Growth:  Looking at the 10K, the two newer BUs are growing at a very attractive rate.  Payments growing total payment volume at 24% and Enterprise growing merch sales at 21%.  All this high growth while the huge core business of Marketplaces continues to grow in the low double digits.

  • Price Performance:  Again with peer comps, EBAY price performance is well below the industry average at +10% in the last 52 weeks.  Compared to AMZN(16%), GOOG(28%), and FB (113%)


I'm a buyer of EBAY in the low $50s