Written by D.X.
Both CEPH and GENZ are at their one year low, which is good. It means that they are at the cheapest point within this year. Both of them don't provide dividends. This could be good or bad, depending on if other companies within their sector give dividends or if they have enough cash to support it.
However, GENZ is a considerably larger company than CEPH. GENZ has a market cap of around 13.8 Billion while CEPH's is around 3.79 Billion. However, even though both were big companies, they suffered one year of huge losses. GENZ suffered in 2006, and CEPH suffered in 2007
CEPH has a PE of 16 and an EPS of around 3. This is considerably better than GENZ stats of PE 32 and EPS of 1.6. However, CEPH holds considerably more debt than GENZ, 700 million and 100 million respectively. Looking at their balance sheet, most of CEPH's and GENZ's debt is in accounts payable, or the amount of money it owes to its vendors, suppliers, etc. There is little long term debt relative to their accounts payable debt. In addition, GENZ has a higher book value per share $27.2, cash $702 million, as well as profit $3.46 Billion than CEPH, which has a book value of $21.75, cash $614 million, and a profit of $1.56 Billion.
The high book value is an interesting factor. This means that they both have lots of manufacturing plants and or research facilities. Both companies may be focusing on R&D and production. But, after looking at their balance sheet, they don't seem to be incurring lots of long term debt. This means that they are financing R&D and production using cash on hand. Taking a closer look at the Income Statement, however, GENZ is taking the initiative on R&D as well as production. It is spending as much on R&D $1,308,000,000 as much as it is spending on Selling and Administrative $1,338,000,000. CEPH, on the other hand, is spending half as much on R&D $362,000,000 as Selling and Administrative $840,000,000. Also, looking at the balance sheet, GENZ's plant/equipment is increasing while CEPH's is decreasing. This means that GENZ's will be able to produce more in the future compared to CEPH.
This means that while CEPH has a higher profit margin and growth rate CURRENTLY, GENZ is going to be in a better position in the future due to the massive amounts of R&D it is pouring in relative to CEPH.
Finally, both companies are currently losing money according to the cash flow statement. This means that the stock price could continue going downwards. How far it will go is anyone's guess.
As far as which company is a better buy, I feel that GENZ is probably better for the long term. Although both companies look attractive, GENZ seems like it is poised to completely take over it's niche.
