MYL - Is This Bargain Biotech Stock a Treasure or a Trap?
Using stock screeners to filter out stocks that are trading at low price-to-earnings (P/E) or price-to-book (P/B) multiples can be a way to uncover some cheap investments. But some stocks are destined to stay at low multiples because they're risky or offer little to no growth.
One biotech stock that's been consistently trading at a low P/E is Biogen (NASDAQ: BIIB). But despite the low price, the stock's still down 12% this year, and it's even underperformed the S&P 500, which has declined by 5%. Let's take a closer look at why the stock can't get going and whether investors should avoid Biogen despite its cheap valuation, or whether it could be a bargain buy.
By around mid-April, shares of Biogen were doing fairly well, up 15% from the start of the year. But that all changed when the company released its first-quarter results on April 22. Sales during the quarter were up 1% from the prior-year period, while net income declined by 1%.