Thursday, August 9, 2007

ISIS Pharmaceuticals Inc.

ISIS Pharmaceuticals Inc. is a NASDAQ listed security that has been trading in a range between $6.09 and $14.00 over the past year. With 82,543,510 shares outstanding, a recent price of $10.33 gives a total market capitalization of $882,390,087. While there are certainly larger companies, ISIS Pharmaceuticals Inc. has definitely earned its place in the pack. Last year, ISIS Pharmaceuticals Inc. created $-0.53 in earnings for every share outstanding.

ISIS Pharmaceuticals Inc. 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, ISIS Pharmaceuticals Inc. is unlikely to be an interesting value proposition. Consistent earnings are the key to high valuations and this security is not on its way.

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