To generate superior risk-adjusted returns, the billionaire guru's Stamford, Connecticut-based firm invests in a wide range of asset classes worldwide. Its long-short strategy is based on bottom-up research processes that focus on fundamentals and macroeconomic conditions.
According to GuruFocus Real-Time Picks, a Premium feature, Cohen invested in 3.8 million shares of the Burlingame, California-based veterinary biopharmaceutical company on March 31, impacting the equity portfolio by 0.09%. The stock traded for an average price of $4.97 per share on the day of the transaction. He previously sold out of a position in Kindred Biosciences in the first quarter of 2014.
The company, whose goal is to save and improve the lives of cats, dogs and horses, has a $207.25 million market cap; its shares closed at $5 on Thursday with a price-book ratio of 2.93 and a price-sales ratio of 4.75.
The price chart shows the stock is trading above both its median price-book ratio as well as its median price-sales value, suggesting it is overpriced.
On March 16, Kindred Biosciences reported its fourth-quarter and full-year 2020 results. It posted a net loss of 28 cents per share on $1 million in revenue for the three months ended Dec. 31.
For the full year, the company recorded a loss of 55 cents per share on $42.2 million in sales.
In a statement, CEO Richard Chin, M.D., noted the company had a "strong finish" to 2020 and reported positive results for its pilot study regarding canine inflammatory bowel disease. He also discussed the progress of some of Kindred's pipeline drugs.
"We look forward to a number of important developments across our late-stage pipeline in 2021, including potential approval of our monoclonal antibody for canine parvovirus, updates on the tirnovetmab pivotal efficacy study, and pilot study results for our IL-4R program for canine atopic dermatitis," he said.
GuruFocus rated Kindred Biosciences' financial strength 5 out of 10. While it has a solid cash-to-debt ratio of 2.5, the Altman Z-Score of 1.25 warns the company could be in danger of going bankrupt.
The company's profitability fared even worse, scoring a 1 out of 10 rating on the back of negative margins and returns that underperform a majority of competitors. Kindred Biosciences also has a moderate Piotroski F-Score of 5, which indicates operating conditions are stable.
Cohen is now the company's largest guru shareholder with a 9.31% stake. John Rogers (Trades, Portfolio), Jim Simons (Trades, Portfolio)' Renaissance Technologies and Paul Tudor Jones (Trades, Portfolio) also have positions in the stock.
Cohen's $20.5 billion equity portfolio, which was composed of 879 stocks as of the three months ended Dec. 31, is most heavily invested in the technology, health care and consumer cyclical sectors.
Other pet-related stocks the guru was invested in as of the end of the fourth quarter included Zoetis Inc. (ZTS, Financial), Freshpet Inc. (FRPT, Financial) and Elanco Animal Health Inc. (ELAN, Financial).
Disclosure: No positions.
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