November 29, 2010 | In: Healthcare
BIOS at a Bargain Price
One of the stocks that I really love is BIOS, and with a P/E that is less than 5, what’s not to love. BIOS is the ticker for BioScrip Inc., a pharmaceutical company that is actually making money, unlike (most of) the rest in this industry.
The pharmaceutical industry is now generally bullish, but, as with other industries, it is suffering the “end of year” effect, where small investors tend to sell their stocks in order to claim capital loss on their tax filings. This has even a bigger impact on BIOS due to the following:
- The company’s small size: market capitalization is around $220 million at the current stock price.
- The 44% drop in the stock price since the beginning of the year: This is very major as investors can claim substantial amounts for capital loss if they sell this stock.
BIOS has also other problems of its own, such as withdrawing the guidance and changing its CEO.
The stock may drop more before it rebounds by mid December (this is when small investors tend to get out). I think the stock might even double in price as early as January. Sticking with these small, but strong companies is definitely worth it.