LOOKING AT DNA

Genentech Inc. DNA

Genentech, Inc. engages in the discovery, development, manufacture, and commercialization of biotherapeutics in the United States.

DNA has grown earnings at an annual rate of almost 50% the last 5 years. Even if one is to estimate a modest growth rate of 25% over the next 5 years, DNA is still very cheap on a valuation basis. The stock price has not been this low since May of 2005 and is currently trading more than 20% below is 52 week high set in January. DNA is expected to earn between $3.20 to $3.80 next year meaning its trading at 20-22 times next years earnings. I am a buyer at this price. I am looking for $100 + over the next 12 months.