While investing is a highly -egulated industry, in terms of how an investor chooses to pick and make his investment decisions, it also is a field with a wide degree of latitude. You can copy another's work -- in fact piggybacking on another investor's idea is considered a prudent approach.
You can also buy and sell the same stock more than once. Indeed, security price is the single most important component that determines the future return. Indeed, this market will allow patient investors to do just that.
For example, Kindred Biosciences (KIN) is a name I first mentioned several months ago back in January. Kindred is a biotech focused on animal healthcare. We have hundreds of biotechs that create human drugs. Kindred is attempting to do the same for animals and really the only pure play company in the industry at the moment. Specifically, the company is focusing on treatments for cats, dogs and horses.
At the time, the stock was trading for around $13.50. Within a month, the shares had zoomed to $26. I owned Kindred at $13, didn't sell at $26, and now the shares are trading back at $14.60. Naturally, I wish I were smart enough to have sold in February and bought shares again now. Nothing of any significance has led to the selloff. In April, the company did an equity rights offering that was oversubscribed at an offering price of $18 per share.
Kindred is still on track and expects approval for CareKin, a treatment for canine osteoarthritis, in the second half of 2015. This product is also showing signs of efficacy for horses and cats. Another candidate AtoKin, a treatment for canine dermatitis, is expected to be approved by the end of 2015. Kindred also has several other candidates moving through its pipeline.
The decline in stock price opens up another door to invest at an attractive price. The next earnings report is due out next Monday and it will be your typical biotech report. Because the company has no commercial products out yet, there will be a cash burn. It's possible another stock offering will occur in the future to raise cash. But unlike traditional human biotechs, animal drugs cost a fraction to bring to market and have a much shorter window from development to commercial approval.
The stock price has come back nicely, but is still off from the IPO price of approximately $9. But at the current price, Kindred has a market cap of $233 million. Were the company to have a couple of commercially-viable products in its stable, Kindred could become a billion dollar enterprise very quickly.
