By Gali Weinreb, "Globes"
Clal Finance Batucha Analyst Yisca Erez Reviews Five Stocks.
"The biomed industry in Israel is still in its infancy, and investors are wary of the risk. Accordingly, the market cap and the liquidity of these stocks are sometimes lower than the potential value of the companies. Sometimes they are traded close to the value of their cash, with no value being assigned to their activity." This is how Clal Finance Batucha senior analyst Yisca Erez opens a comprehensive survey of five outstanding Israeli biomed companies. The companies Bio-Light Israeli Life Sciences Investments Ltd. (TASE:BOLT), Can-Fite BioPharma Ltd. (TASE:CFBI), BiolineRX Ltd. (TASE:BLRX), Topspin Medical Inc. (TASE:TOPMD), and LifeWave Hi-Tech Medical Devices Ltd. (TASE:LIFE) were selected on the basis of trading volume and market cap.
Erez first compares these companies to companies traded in the US. The comparison shows that US companies with a product in Phase II clinical trials generally have market caps in the hundreds of millions of dollars, whereas Israeli companies at similar stages are all have market caps below $100 million. Erez values the companies on a discounted cash flow basis, but warns, "It is hard to value biotech companies using normal criteria. Buying shares in companies like these is perhaps similar to entering a lottery, with the trial results being the measure of success. It's important to stress that entering that a low-risk lottery can also bring success, while a high-risk lottery is liable to end in a loss. The risk is high, but the return for success is very substantial." For two of the firms - BioLight and Can-Fite - Erez grants a "Buy" recommendation, while two others - Bioline and Topspin - get an "Outperform" recommendation.
Addition : HBL is not covered in this review due the phase in which its drugs are being developed, but will be covered by analysts within the next few weeks. |
