Seth Klarman Finds Hidden Value in Pharmaceutical Company
Guru Seth Klarman (Trades, Portfolio) grew up in Baltimore in a very studious household. Klarman attended Cornell University and earned an MBA from Harvard in 1982. Shortly after graduation, Klarman founded The Baupost Group in 1982, an investment firm that focuses on long term value with similar investment philosophies to the legendary Benjamin Graham.
Warning! GuruFocus has detected 5 Warning Signs with BITI. Click here to check it out.
The intrinsic value of BITI
In the first quarter of 2016, Klarman added 902,883 shares of Biotie Therapies Corp. (BITI).
Biotie Therapies has a market cap of $302.28 million, an enterprise value of $270.13 million, a P/B ratio of 2.66 and a quick ratio of 16.43.
Biotie Therapies is a specialized drug development company focused on products for neurodegenerative and psychiatric disorders. The company is currently working on Tozadenant, which is a drug used to treat Parkinson's disease and is in stage three development. The company is also working on drugs to treat dementia, and primary sclerosing cholangitis, a rare disease of the liver.
The company has nearly doubled in share price in the first quarter of 2016, increasing from $13.20 on Jan. 15 to $24.62 on Jan. 19.
Below is a Peter Lynch Chart for Biotie Therapies Corp.
Biotie Therapies has two severe warning signs according to GuruFocus. The company's Sloan ratio is -0.02, indicating that the company has a poor quality of earnings. The company also has sales outstanding that is building up, meaning that they're having difficulties collecting payments from their customers.
Seth Klarman (Trades, Portfolio) leaves no stone unturned when it comes to finding hidden value in companies. Biotie Therapies is currently in the late stages of developing Tozadenant, which if released successfully, the company's revenues and market price could skyrocket.
Cheers to your investment success.
Disclaimer: Author does not currently own any shares in this stock.
This article first appeared on GuruFocus.
Warning! GuruFocus has detected 5 Warning Signs with BITI. Click here to check it out.
The intrinsic value of BITI
