Steven Cohen (Trades, Portfolio) hit another home run after he added to his stake in Tesaro Inc. (TSRO, Financial) at an average price of $43.14. Since May 9, Cohen’s stake in Tesaro has risen 111% in price.
Tesaro is an oncology-focused biopharmaceutical company dedicated to improving the lives of cancer patients. The company was founded in March 2010 and has a license to develop oncology-related product candidates, including rolapitant and niraparib as well as product candidates under an immuno-oncology platform.
Tesaro has a market cap of $4.12 billion, a P/B ratio of 24.99, an enterprise value of $3.93 billion and a quick ratio of 5.43.
Tesaro has three severe warning signs according to GuruFocus.
- Short Percentage of Float: high. Tesaro short interest is high; 40.82% of the float is shorted.
- Tesaro's days sales outstanding are building up. If a company's sales outstanding increases, it means it has difficulty collecting payment from its customers.
- Days Inventory: building up. If a company builds up inventory, it may mean it is having difficulty selling its goods.
This wasn’t Cohen’s first home run in 2016
Cohen invested in a 2,255,000-share stake in Celator Pharmaceuticals Inc. (CPXX, Financial), a New Jersey-based oncology-focused biopharmaceutical company, on March 14. Cohen paid $1.68 per share in a transaction that had a 0.03% impact on the guru’s portfolio. Since then, the company has risen 18x in price.
Celator Pharmaceuticals has a market cap of $1.28 billion, an enterprise value of $1.23 billion and a P/B ratio of 20.90.
Below is a Peter Lynch Chart for Celator Pharmaceuticals.
Conclusion
Cohen has netted outstanding returns in oncology this year. His team at Point72 Asset Management has approximately 1,000 employees including more than 250 investment professionals. This gives Point72 Asset Management a strong edge in the market, and it's definitely noteworthy that Cohen knows how to take a risk.
Cheers to your investment success.
Disclosure: Author does not own any shares of Tesaro or Celator Pharmaceuticals.
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