Top Picks 2016: Emergent Biosolutions

01/19/2016 7:00 am EST


Joe Duarte

Editor, Joe Duarte In the Money Options

My top speculative idea for 2016 is a defense play given its niche in bioterrorism related vaccinations, explains biotech expert Dr. Joe Duarte in Investing Daily's Smart Tech Investor

Emergent Biosolutions (EBS) has developed a bio-Anthrax vaccine that is its best selling product through contracts with the US government via the CDC and Defense Department.

The company is also involved in treatments for chemical weapons’ related injuries overseas, but not yet in the US.

The company reported its latest earnings on November 5 and beat expectations delivering 83 cents per share in net income on revenues of $164.9 million. 

Estimates averaged $151.42 million in revenues and 56 cents per share. EBS has a history of positive surprises.

The company reported earnings of 36 cents per share for its second quarter of 2015, beating analyst estimates of 26 cents. Revenues climbed 14% year-over-year to $126.1 compared to an estimate of 124.25 million.

The company also announced that it will spin off its biosciences unit, whose focus is oncology, to investors, a move that will allow it to focus on its strengths, vaccines, and other defense related biologicals.

In the current climate of increasing terrorism threats, EBS is an excellent addition to any portfolio. Dr. Duarte owns shares in EBS.

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