August 8, 2010 | In: Uncategorized

BIOS (Bioscrip): A Bargain Pharmaceutical Stock

A couple of weeks ago, BIOS was down over 30% on high volume, and the stock reached a low of 4.12 last week. But then, something happened, and the stock started to go up on Thursday and Friday, and closed at around 4.54. So why did the stock go down, and why did it go up?

2 weeks ago the company released their earnings for the second quarter, and BIOS missed the estimates, their guidance wasn’t that great either. The stock was slaughtered. But after the stock reached 4.31 the following week, some interesting things started happening: The January 2011 $5 Puts were sold, which means that the investors believed, at this point, that the stock has bottomed. Nevertheless, panic still reigned and people still were selling, and the stock reached a bottom of 4.12. But then more interesting things started happening. Thursday the stock reversed the trend and started going up, and Friday the stock went up 7% on 2.5 times the average volume, which is very bullish as it marks the reverse of the earlier (down) trend. The stock went up because apparently senior executives at BIOS started buying more shares in their own company, which means that insiders think that the stock is largely undervalued, and do not share the analysts opinion about the future of the company. After all, the stock is now trading below its book value of 4.90, which makes BIOS a bargain in the case of a takeover bid.

Let’s see what next week will reveal about this stock, and if the stock will break the $5 mark. BIOS is a reputable company with a bright long term future, and again any stock is a bargain if traded below the book value while the company is still making profits.

2 Responses to BIOS (Bioscrip): A Bargain Pharmaceutical Stock

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Why I’m Very Bullish on CVBF « Fadi El-Eter

August 22nd, 2010 at 6:37 pm

[...] and the book price for this stock is $6.33 (the stock is trading slightly above its book price, BIOS, anyone?), the bank is doing very well, and insiders believe in it. What’s there to fear? [...]

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Revisiting BIOS « Fadi El-Eter

August 30th, 2010 at 11:16 am

[...] days ago, I have written a post about BIOS on why I think it’s a bargain stock. At that time, the stock was at a mere $4.54, rebounding from a low of $4.13. The stock closed on [...]

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