Were it not for the cool-down in natural gas prices over the past 18 months, Cabot's sales and profits would have been exploding by now. Instead, sales are likely to rise around 20% this year (to $1.18 billion). Yet analysts think that natural gas prices will rebound moderately in 2013, setting the stage for sales growth of around 40%.
Analysts at Brean Murray suggest you value this stock based on the value of its real estate. They think the net asset value stands at around $60, well above the current $40 stock price.
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Gastro-intestinal distress is no laughing matter, as anyone with its symptoms will tell you. From Crohn's disease to irritable bowel syndrome to plain old cramping, GI distress can force one to drop plans on a moment's notice, and lead them to stay close to home.
has been making tremendous progress in this area. Salix's Xifaxan has been prescribed by an increasing number of doctor's for symptoms of diarrhea, enabling many people to resume more normal lives. The drug has powered Salix's income statement, from under $200 million in 2008 to $540 million in 2011.
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And that revenue base could swell a lot higher if Salix's Solesta drug is as successful as analysts anticipate. The injectable drug has had great success in clinical trials, helping bulk up loose stool. The drug is a lot more powerful than traditional anti-diarrhea drugs you can buy at a pharmacy, though a lot less invasive than the major bowel surgery that some people require.
Analysts at Merrill Lynch anticipate a launch in 2013 for Solesta, and see sales for this drug rising to $250 million by 2016. That should enable Salix Pharma to maintain its robust pace of 20+% annual growth.
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