Is bluebird bio Overvalued?

  • BLUE has at least 2 years to get a product in the market.
  • Founded in 1992, the company has a market cap above $6bn.
  • While we don’t doubt the company will have a product in the market one day, we wonder if the price is worth it.
  • This is an example of how we vet a stock from the 1000+ healthcare stock population and add or reject it to/from our watchlist.

By Dr. Udaya K Maiya, MBBS, MD, DNB, DCCF-Paris

bluebird bio (BLUE) tops the list of the 30-odd stocks we at Avisol consider suspiciously highly valued, now that Kite Pharma (KITE) has been spoken for. We define these stocks as “multibillion market cap stocks with no product in the market.” Some of these may actually be overvalued, so this list is a good place to look for short candidates. Some others may have such pioneering research that the market already values them for what they may develop in the future. That is risky for investors, doubtless, and that also creates a high entry point for new investors. Nevertheless, some of these, like we saw with Kite, are good buyout candidates, especially after Gilead’s (GILD) foray into oncology proper.

The full unabridged post was first published, and can be accessed, on SeekingAlpha Marketplace.

An abridged version is available below to our investor members. Login or Subscribe here.