Tuesday, August 7, 2007

Dyax Corp.

Dyax Corp. is a NASDAQ listed security that has been trading in a range between $2.64 and $6.95 over the past year. With 48,251,920 shares outstanding, a recent price of $3.74 gives a total market capitalization of $183,357,294. While there are certainly larger companies, Dyax Corp. has definitely earned its place in the pack. Last year, Dyax Corp. created $-1.37 in earnings for every share outstanding.

Dyax Corp. is currently priced by the market at 0.00 times last year’s earnings. Many trading multiples around the world are quite attractive these days, but don’t be fooled. A Price to Earnings ratio of 0 simply means that the security didn’t make any money last year.

With a share price under $50 a share and earnings per share below $1 a share, Dyax Corp. is unlikely to be an interesting value proposition. Consistent earnings are the key to high valuations and this security is not on its way.