# Time to switch out of resources to biotechs?



## Sean K (21 January 2007)

I'm not sure if it's too early to be calling this, but I have noticed the past few months more and more posting on biotechs. 

Are we coming into a phase where biotechs are the new gold, zinc, iron ore, or uranium speccie? 

Or, do the resource explorers/juniors still have some way to go?

Posting this with the idea that the best way to make the biggest gains is to get in before the horse has bolted. 

Or, has the biotech industry bolted already too?

The contrarian in me is saying that it's time to move on........


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## moses (21 January 2007)

I've been wondering the same thing myself.


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## Bobby (21 January 2007)

kennas said:
			
		

> Or, has the biotech industry bolted already too?
> 
> ......




I don't think it has yet.

I'd like some more opinions. 

Bob.


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## reece55 (21 January 2007)

Kennas
There is no denying that the hot money has moved from mining to Biotech. I have workmate who maintains a very large private share syndicate and he lothes biotechs to death. But of late, even he admits that there are a few biotechs being purchased in the portfolio. Whilst the mining boom was on, these shares didn't really see the light of day. Now that the mining sector is starting to get the shakes, many of these companies with worthy patents are seen as being cheap. 

Don't ask me which to pick however - I have no idea. The whole biotech sector has always baffled me valuation wise - hence why I would be relying on price action to tell me the story. If you don't have a quality biotech in your portfolio, now is the time to get on the boat IMO. Good luck to all having a go in the sector!

Cheers


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## Sean K (21 January 2007)

reece55 said:
			
		

> Kennas
> There is no denying that the hot money has moved from mining to Biotech. I have workmate who maintains a very large private share syndicate and he lothes biotechs to death. But of late, even he admits that there are a few biotechs being purchased in the portfolio. Whilst the mining boom was on, these shares didn't really see the light of day. Now that the mining sector is starting to get the shakes, many of these companies with worthy patents are seen as being cheap.
> 
> Don't ask me which to pick however - I have no idea. The whole biotech sector has always baffled me valuation wise - hence why I would be relying on price action to tell me the story. If you don't have a quality biotech in your portfolio, now is the time to get on the boat IMO. Good luck to all having a go in the sector!
> ...



I agree on the valuation thing. Same with some of the speculative resource explorers looking for X in Namibia with some radiometrics...just how are they valued?

Some of these explorers might have 'bio' or 'nano' in their company name in the next 5 years.....

Tough industry, but another that has potential to explode. We are just seeing some movement the past few weeks......

Something to keep  an eye on.


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## Sean K (21 January 2007)

Bobby said:
			
		

> I don't think it has yet.
> 
> I'd like some more opinions.
> 
> Bob.



Bob, I saw a couple fly last week. SOM and BIO? something....??


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## mb1 (21 January 2007)

Guys I've been feeling this way too in the last month. If you look at a lot of stocks in this field you can see that they are on the trend up from all time lows.

I'm in a position now whether to increase my biotech holdings or buy into another uranium company such as UNX or URA.

I'm split.


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## 56gsa (21 January 2007)

For those of us who don't have the time or brains to come to understand the biotech industries - i'd be interested on any comments about managed biotech funds etc

e.g. comsec has been advertising a eG Capital Bioequities fund for a while now (the units seem to have made about 20% in the last few months...)

Other Oz managed funds I have found:

Colonial Global Health & Biotech Managed Fund
JB Were Global Health & Biotech Managed Fund

Also Biotech Capital (BTC)- listed PDF (listed investments are Phylogica,  prima biomed, starpharma SPL, clinical cell culture, stem cell sciences,  alchemia) - PYC has been their star performer - doing share buyback at the moment...

But do people know of other biotech funds?  

Is there a comparative list that shows their performance? (smartinvestor doesn't list biotech separately.. & hard to find any otherwise..)


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## mb1 (21 January 2007)

56gsa, they're the major ones I've come across too. Probably the most potential as well.


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## Sean K (21 January 2007)

56gsa said:
			
		

> For those of us who don't have the time or brains to come to understand the biotech industries - i'd be interested on any comments about managed biotech funds etc
> 
> e.g. comsec has been advertising a eG Capital Bioequities fund for a while now (the units seem to have made about 20% in the last few months...)
> 
> ...



Thanks for those 56. Another option is companies that invest in or fund other biotechs. I'll be looking up those funds tomorrow, cheers!


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## Bobby (21 January 2007)

kennas said:
			
		

> Bob, I saw a couple fly last week. SOM and BIO? something....??



 Kennas

Yes I watch Nal, Som, Pno, Bbo ~ etc""

Funny feeling to not just grap the T/A right ones, hard to explain why not.
Like to see more action.

Bob.


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## vida (21 January 2007)

Bobby said:
			
		

> Kennas
> 
> Yes I watch Nal, Som, Pno, Bbp ~ etc""
> 
> ...




Yes I have recently acquired some biotechs and have made 275% profit on these since November 06, and can feel something positive is going to happen in near future so am holding on to them. Has anyone any thoughts on Healthlinx which sounds like it has some pretty good products although its share price does not reflect much happening? It seems to have a future.


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## Bobby (21 January 2007)

vida said:
			
		

> Yes I have recently acquired some biotechs and have made 275% profit on these since November 06, and can feel something positive is going to happen in near future so am holding on to them. Has anyone any thoughts on Healthlinx which sounds like it has some pretty good products although its share price does not reflect much happening? It seems to have a future.



Vida Well Done!
I know that feeling - bought TOX at .067 cents, look at them now.

Bob.


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## GOYCO (23 January 2007)

Hi Guys

I'm new at trying to value a biotech company. Can anyone give me a few good ones to research? I would really appreciate it.

cheers


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## Halba (23 January 2007)

AVX - hiv phase 2b


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## doctorj (23 January 2007)

So if uranium is where the 'hot' money goes in resources, where does it go for biotechs?  

HIV, Cancer, Bird Flu, Surgical gizmos?

And what drives the typical price spikes in biotechs (as opposed to drilling results, resource estimation for resources)?  Press coverage?  Or is it a case of the rising tide raising all the ships?

I wouldn't have the foggiest where to start with these guys.  How do you go about putting a value to research that may or may not come up with something useful that may or not have already been 'discovered' before that may or may not be able to be commercialised?

Atleast with resource companies you know exactly what they're aiming at early on and there's a clearly defined path to commercialisation.  Are there any good texts on biotechs someone can point me to that may answer some of these questions?


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## mb1 (23 January 2007)

hi doctorj go to the asx website www.asx.com.au and go to industry sectors theres a good write up on the biotech field with most your questions answered.

Yes biotechs are hard to value compared to mining. 

I like to have a look at the company's previous high prices over the years and buy while there low like now. how do I know which ones. Have a look which ones are getting the most volumes (NAL has been pretty consistent with high trade)

Read their announcements, are they getting grants and funding?
Have they got patents?
Have they got relations to US or european companys?
Are they already distributing products?
Are they looking to cut down on costs?

these are suggestions to some indicators in my opinion


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## billhill (23 January 2007)

If you are trying to value biotechs the best way in my opinion is look for companies developing technologies in the more niche markets where there is much less competition. Cancer, HIV and Influenza treatments are the holy grails of the biotech sector but are few and far between. In so many years of research we really haven't come that far on these diseases and identifying the company with the next blockbuster treatment is nearly impossible.

Look for companies that have associations with big Pharma or multinationals. They are the ones who run the industry and will spot potential long before the average investor. And look for companies that have an agressive product development pipeline and patents likely to provide steady cashflows.


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## GOYCO (23 January 2007)

I've got to admit it Kennas, sometimes you come up with some great questions. All credit to you, I think your right I just believe the timing is not. 6 to 12 months left in mining IMO. Not just Biotechs though, plenty of really good deals on industrial stocks as well. Sometimes we forget there is more to Australia then what we can dig up..

Cheers

Would still love to know definitely how to value biotechs, I believe if you don't understand it you shouldn't be in it..


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## chops_a_must (23 January 2007)

billhill said:
			
		

> If you are trying to value biotechs the best way in my opinion is look for companies developing technologies in the more niche markets where there is much less competition. Cancer, HIV and Influenza treatments are the holy grails of the biotech sector but are few and far between. In so many years of research we really haven't come that far on these diseases and identifying the company with the next blockbuster treatment is nearly impossible.
> 
> Look for companies that have associations with big Pharma or multinationals. They are the ones who run the industry and will spot potential long before the average investor. And look for companies that have an agressive product development pipeline and patents likely to provide steady cashflows.



That's along the lines of the way I was thinking. If their ideas sound simple and not grandiose, they are probably going to have more chance of achieving what they are aiming at.

Anyway, some biotechs seem to be able to match the volatility of the miners.


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## billhill (23 January 2007)

GOYCO said:
			
		

> Would still love to know definitely how to value biotechs, I believe if you don't understand it you shouldn't be in it..




Unfortunately most people would require a biomedical degree to understand a lot of the technology the biotechs are developing.


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## Bobby (23 January 2007)

GOYCO said:
			
		

> I just believe the timing is not.
> Cheers




I'm interested in how you think, tell us more about the timing please.

Bob.


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## GOYCO (23 January 2007)

Bobby

Sure. Quite simply I still see value in quite a few of the mining stocks..Many on low forward PE's, China and India should keep prices relatively stable for a while, albeit not at these high levels but still respectable. The problem comes when all the new mines come on line in 08, 09, 10. China's growth can not be exponential forever. When value becomes hard to find then I think it is time to move on. The market at the moment is seen as fair value. Not cheap not overpriced, but fair. I read a book a long time ago which said "when BHP is around a PE of 10 then it's a buy. When 20 then get out " wish I could remember the name of the book. It's a good yardstick IMO. I also know that using PE's for some mining companies are inappropriate but diversified miners IMO are the exception to the rule.

cheers


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## Sean K (23 January 2007)

In regard to information resources and how to evaluate biotechs, a friend of mine is signed up to a weekly newsletter called Bioshares - or something. I'll try and get the details of it. He has found it to be quite informative and it has put him on the path to finding some good potential stocks and understanding the industry a little better. This guy has completely avoided the resources boom and stuck with biotechs and seems to have gone ok. 

(disclaimer: I am not signed up to this newsletter, have no association with it, and only know about it through my friend - this is not an add!   )


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## Sean K (23 January 2007)

In regard to timing: good point, resource speccies may have some time to run. But how long? It's impossible to tell. Most times, when a boom stops, the opportunity to get into the next big thing has been missed. Might be an opportunity to get out at the peak, and get into something just about to take off....just thoughts...I have not decided if it's the right time now - I'm very happy watching uranium stocks skipping along at the smell of yellow cake - or even a picture of potential yellow cake from a satellite! LOL


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## macca (24 January 2007)

Hi all,

It is a bit hard to know where to draw the line on what is a bio sometimes   

I have recently bought POH, I guess that is a bio, they have a food additive Nestles want, an international agreement has been signed.

They still have other products to come to market, the stock is starting to head back up to old highs, maybe a bit of blue sky if the other prods launch as well.

Another spec is FER, if this proves up it would be a billion dollar deal IMO, I got in late but have still turned a profit.

Wouldn't mind buying another bio, I think we are going to see a bit of action in 2007 in this sector.


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## tech/a (24 January 2007)

I've had a look but cant find any Charts for Resource or Biotech sectors.

Are there any?

If not It would be handy to make up a composite of stocks which could be classified in each sector.

Is there a list somewhere?


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## tech/a (24 January 2007)

Based with these 2 charts it would be very easy to see if they are strong or weak,and can be compared to each other and the ASX to see which is out performing each.

You could then find which stock is out performing which in each sector.

I have made up a composite index of Uranium miners (The small caps under 100 million.) Some interesting things found.


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## Mouse (24 January 2007)

Hi Tech,

I don't know if this will help, but I have been charting all the companies listed on the ASX's biotech and pharmaceutical list since february last year, and the overall percentage gain for that period to yesterdays close was 6.54%.  

For the last quarter (1/10/2006 - 31/12/06) the gain was 15.31%.
For the last month (December) it was 4.16%

If you need any other info I will try to help, but please keep in mind I'm just a beginner (so simple words please!!)

cheers
Mouse
** editted to add, those figures don't include any companies listed after I started recording them in feb 06.


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## soul (28 January 2007)

yes it is very useful to have a bio degree to trade bio shares 

i have got a friend who is studying honours in pharmacy and he helped me alot through trading bio shares


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## vida (3 February 2007)

wow bob, that is excellent !!!



			
				Bobby said:
			
		

> Vida Well Done!
> I know that feeling - bought TOX at .067 cents, look at them now.
> 
> Bob.


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## vida (3 February 2007)

Good for you.  I had a friend who operates a few pharmacies and he says he would never speculate on bio-techs, too much uncertainty, things go wrong too often and products take too long from trials to market if they ever get that far - another friend who was a genetics professor totally refused to think about bio-tech shares, he said his work was not about that.



			
				soul said:
			
		

> yes it is very useful to have a bio degree to trade bio shares
> 
> i have got a friend who is studying honours in pharmacy and he helped me alot through trading bio shares


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## angela200172 (4 February 2007)

I'm new at trying to value a biotech company and I have hold some CCE. Can  anyone give me a few good ones to research? I would really appreciate it.

cheers

Angela


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## vida (5 February 2007)

You should ask a professional share broker for selections.  However, I have done very well with Compumedica (CMP) lately. Also Benitec (BLT) is in my portfolio but its in a very risky situation. I am not recommending anything just offering my selections. I also hold CCE which is doing quite nicely I think.



			
				angela200172 said:
			
		

> I'm new at trying to value a biotech company and I have hold some CCE. Can  anyone give me a few good ones to research? I would really appreciate it.
> 
> cheers
> 
> Angela


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## angela200172 (6 February 2007)

vida     

thank you very much for your help ,

angela


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## dhukka (6 February 2007)

angela200172 said:
			
		

> I'm new at trying to value a biotech company and I have hold some CCE. Can  anyone give me a few good ones to research? I would really appreciate it.
> 
> cheers
> 
> Angela




Angela,

One I am looking at right now is POH, quite advanced in terms of trials, relatively well cashed up and has an interesting agreement with Nestle at the moment. 

Deborah Rathjen successfully took PTD through to commercialization and she is now at BNO which looks interesting but trials are at early stages and they will definitely need to raise capital soon. 

Also take a peak at SLA and TIS. Should see some revenue coming through for these two in the near future.


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## insider (6 February 2007)

How is the share price of a biotec stock typically affected? Do they require results, disease outbreaks, production of consumables for profit etc...

In other words what would make the price go up?


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## vida (6 February 2007)

Also BTC (BioTech Capita) would be worthwhile researching. The fund invests in biotechs and I would expect them to do some thorough valuations.  They have CCE on their list and several others. I don't have any BTC shares yet.



			
				angela200172 said:
			
		

> vida
> 
> thank you very much for your help ,
> 
> angela


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